Starting a Nonprofit in Utah
P.S: This article describes how to form a nonprofit corporation and is NOT applicable to starting an unincorporated organization. (For unincorporated organization read: How to start an unincorporated nonprofit organization)
Starting a nonprofit organization in Utah is governed by Utah Revised Nonprofit Corporation Act, Title 16 – Chapter 06a of the Utah Code.
Scope of the Act
Provisions of Utah Revised Nonprofit Corporation Act are applicable to starting of ‘public benefit’, ‘private foundation’ or ‘religious’ corporation in Utah.
Eligibility for starting a nonprofit organization in Utah
a) One or more individual (aged 18 years or older), who may or may not be a domicile of Utah can act as the Incorporator to form a nonprofit organization. Incorporator is one who would move the application for incorporation.
b) The organization must appoint a ‘registered agent’ with a valid street address of Utah (Postal address not accepted). A registered agent is a person who agrees to receive all notices, demands and any other service of process on behalf of the organization. If the organization does not have a valid street address of Utah, it can avail the services of a ‘Commercial registered agent’ who agrees to the appointment in return for a small annual fee.
c) The address of the registered agent is construed as the ‘registered office address’ of the organization. The registered office of the organization may be different from the ‘principal place of business address’ of the organization. While the registered office address must be located in Utah, the principal place of business may be located even outside Utah.
d) The minimum number of directors for Utah nonprofit corporation is three (3).
Steps for starting a nonprofit organization in Utah
Step 1) Choosing a name for the organization
Utah nonprofit corporation Act specifies the following guidelines for naming a nonprofit organization –
a) The name may but need not contain the designators “corporation,” “incorporated,” or “company” or abbreviations thereof.
b) The name must not indicate a misleading purpose or a purpose different from the purpose laid down in the incorporation documents.
c) The name should be distinguishable from the names of any other entity on records of the office of secretary of state, Utah. Click here for name availability check in Utah. (opens in a new window)
Other factors to be considered when naming a nonprofit organization – Read: Naming a nonprofit
Step 2) Preparing the Articles of Incorporation
Utah nonprofit corporation act stipulates that the articles of incorporation MUST mention the following details –
(a) The name of the nonprofit organization as per requirements specified above.
(b) The purpose(s) for which the nonprofit organization is being established. The purpose can also be mentioned as “”to engage in any lawful act for which a nonprofit corporation may be organized under this chapter” either alone or with other purposes.
(c) the name and address of the organization’s ‘registered agent’ or the ‘commercial registered agent’ upon whom the ‘service of process’ can be be sent.
(d) the names and addresses of all the incorporators of the organization.
(e) a statement specifying whether or not the organization will have members with voting rights and if yes it should also capture the following details –
(i) whether the organization would issue shares of stock to evidence such membership.
(ii) total number of shares that the organization has the authority to issue.
(iii) whether the shares are to be divided into classes, the number of shares in each class, the name of each class and the rights, and limitations of members of each class.
(f) the process to be followed for distribution of assets in case it is decided to dissolve the organization in future.
Optional Clauses in the Article of Incorporation
The Article of incorporation may at discretion include –
(a) the names and addresses of the the initial directors of the organization.
(b) any other provision desired to be included for regulating and managing the the affairs of the nonprofit organization.
Download sample article of Incorporation
Utah secretary of states has prescribed sample article of incorporation for an Utah nonprofit organization. (Click to download -opens in a new window)
Required modifications to the article of Incorporation sample
This sample provided above is a minimalistic version which meets all the requirements of Utah nonprofit corporation Act. However it does not include some of the clauses required by the IRS for nonprofit organizations that propose to obtain tax exempt status under section 501(c)(3) of the IRS code.
Accordingly, organizations seeking to obtain the exempt status MUST add the following mandatory clauses at relevant places.
Step 3) Submitting the Application with the Secretary of states Utah
Executing the Article
The article sample provided above needs to be filled and printed duplicate copies on white blank sheets of paper. The article must be signed by all the incorporators as per instructions provided in the sample.
A nonrefundable filing fee of $30 is payable for filing the Article of Incorporation. The payment can be made in cash or through check, credit card, or money order.
The instrument must be made payable in the name of ‘State of Utah’.
Where to file
Duly completed Article of Incorporation along with a check for the requisite filing fee must be mailed to:
PO Box 146705
Salt Lake City, UT 84114-6705
Alternatively the Article can be delivered in person at:
160 East 300 South, Main Floor
Information Center: (801) 530-4849
Toll Free: (877) 526-3994 (within Utah)
The article of incorporation can also be faxed at (801) 530-6438. However if it is being faxed, it is to be accompanied by this transmission form.
Filing for incorporating a nonprofit organization in Utah take 2-6 working days from the date of its receipt at the corporation division.
Birth of the organization
A nonprofit organization comes into formal legal existence in Utah on the date of successful filing of the Article of Incorporation with the corporation division of the Utah office of secretary of states.
The office returns one copy of the article of incorporation with the word ‘filed’ stamped on all the pages under the signature of authorized person also mentioning the date of filing on all the pages.
Later on, the organization may also apply for a ‘certificate of existence’ by paying the required fee as an evidence of existence of the organization.
A large number of people complete the incorporation procedure on their own instead of relying on lawyers as the very process introduces the applicant to the complete legal framework involved in starting and running nonprofit organization in Utah.
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