How to Start a Nonprofit in Arkansas
Introduction
If you’re passionate about a cause and want to give back to your community, starting a nonprofit is an excellent way to do so. Nonprofits can be created for any purpose and are free from most taxes. But first, you’ll need to take some time to determine if starting one is right for you and your community. Below we’ll walk through each step in the process of forming a nonprofit organization in Arkansas.
Find your Vision
The first thing you must do is find your vision. You will be working with a team of people who all have different skills, experience, and abilities. The key is to make sure that everyone involved in the nonprofit has the same goals and aspirations for the nonprofit that you do. Before starting any sort of business endeavor, it’s important to sit down and think about what exactly it is that you hope to accomplish with your organization.
In order for your organization to succeed (and actually help others), it should have a clear mission statement or set of goals from the very beginning; this will help keep everyone focused on what matters most!
Write a Mission Statement
A mission statement is a short, meaningful statement that reflects the purpose of your nonprofit. It should be clear and concise and easy to understand. The mission statement should also be something that your organization can strive towards.
Choose a Board of Officers
To start a nonprofit, you will need to choose a board and officers. Because nonprofits are non-profit organizations, they don’t have shareholders or owners. Instead, they have a group of people who oversee the organization’s operations and finances on behalf of its members. This group is called the board of directors (or trustees). A nonprofit’s officers are typically chosen by the board or elected by members at an annual meeting or via mail-in ballot; they have day-to-day authority over running the organization.
You can set up your own unique structure for choosing people to serve on your nonprofit’s board and in leadership positions like the president or vice president. Your board can be made up entirely of volunteers (that is, people who give their time without compensation) or it can include paid staff members and/or outside experts from related fields (like legal counsel).
Draft Bylaws
To make sure your nonprofit is governed by the right rules, you’ll need to draft a set of bylaws. Bylaws are the rules that govern how a nonprofit operates. They should be clear and concise, as well as approved by the board. Bylaws also need to be reviewed every year so that if anything changes, your organization is up-to-date with its regulations.
Get an EIN
The next thing you need to do is apply for an EIN. The EIN is a federal tax identification number, not the same as a social security number, and it’s required by nonprofit organizations seeking recognition from the IRS.
Register with the Secretary of State’s Office
You can register your nonprofit by submitting an application and paying a fee. If you want to start a 501(c)(3) nonprofit, which is eligible for federal tax-exempt status, be sure to check the box on your application that designates it as such. In addition to providing basic information about your organization and its purpose, this form will ask for its governing documents (Bylaws), which must be filed with state authorities within 90 days of creation.
Once you’ve submitted your application online and paid the required fees ($85 plus $50 if filing via mail), it typically takes 30 days from submission for approval from officials in Little Rock.
Register as a Charitable Organization
- Register by filling out Form 1023 and submitting it with the appropriate fee.
- Keep an updated copy of your incorporation paperwork on file at all times, as well as a list of all members of your board (including their names, addresses, and titles).
- If you have unpaid federal payroll taxes due from prior years, set up an instalment agreement before filing your application; otherwise, it may be rejected by the Arkansas Secretary of State’s office.
Appoint a Registered Agent
While you’re waiting for your 501(c)(3) application to be approved, it’s a good idea to appoint a registered agent. A registered agent is a person or organization that will receive legal documents on behalf of your business—like summonses, police reports, and lawsuits. By law, you must have someone who is physically present in Arkansas during normal business hours to accept these documents. While this role can technically be fulfilled by anyone (and often is through an attorney), it’s best practice for nonprofits to use an independent third party.
File an Initial Report
The initial report is a document that all nonprofits must file with the secretary of state’s office within 30 days of incorporation. By submitting this form, you will be officially recognized as a nonprofit organization in Arkansas. To file the initial report, you will need to:
- Access the Arkansas Secretary of State website.
- Click on “Nonprofit Organizations.”
- Click on “Initial Report.”
Apply for Tax-exempt Status
If you plan to apply for nonprofit status with the IRS, you will need to do the following:
- Determine if your organization is required to apply for federal tax-exempt status. To do this, check whether your organization’s activities fall under one or more of the categories listed on Form 1023 and its instructions.
- Complete Form 8940, Request for Miscellaneous Determination letter (PDF), and submit it before submitting Form 1023. If you don’t already have an Employer Identification Number (EIN), or Federal Tax identification number, now is as good a time as any to get one by filing Form SS-4 (Application for Employer Identification Number).
Takeaway
The process of setting up a nonprofit in Arkansas is not as difficult as you might think. Once you have the right information, it’s easy to get started and start helping people in your community.
With all the resources available online, an organization in Arkansas can receive funding from any number of sources to achieve their mission.
Conclusion
We hope this guide has helped you understand what is involved in starting a nonprofit organization and the steps that are required. If you have any questions, feel free to contact us at info@trademarkavenue.com or +1-833-332-2322. Our team would be happy to assist you with any questions or concerns as they arise during this process
