How to Start a Nonprofit in South Dakota
Introduction
Starting a nonprofit corporation in South Dakota is a simple process. You’ll need to follow a few basic steps, including filing articles of incorporation with the Secretary of State and appointing your initial directors. But if you’re like most people who have ever thought about starting a nonprofit, you’ll also want to consider what makes sense for your organization and its mission.
Step One: Choose a Name for Your Nonprofit Corporation
Choose a name that’s not offensive.
Make sure your name is unique.
Try not to use too many words or phrases that are spelt out in full, like “the.” Instead, try using an acronym or an abbreviation—just make sure it’s not too long!
Don’t include punctuation marks or numbers in your nonprofit’s name.
Step Two: File Articles of Incorporation with the SD Secretary of State
The next step is to file Articles of Incorporation with the SD Secretary of State. In addition to filing with the state, you’ll also want to file for tax-exempt status. To do this, you will need your articles of incorporation.
Once your nonprofit has been incorporated, it’s time to register it with the South Dakota Secretary of State and apply for federal tax-exempt status from the IRS.
Step Three: Appoint Your Corporation’s Initial Directors
A director is an individual who is responsible for overseeing the actions of the corporation, supervising personnel and other staff, and generally directing the business affairs of a nonprofit. All directors must be at least 18 years old, but there are no residency requirements.
First things first: you need to appoint your initial directors. To do this, you’ll need to file an application with your secretary of state’s office stating the names, addresses and ages of all initial directors (there are often fees associated with this), as well as their powers and duties within your corporation. Once that’s done, you’re good to go!
Step Four: Hold an Organizational Meeting
To hold your organizational meeting, you must have at least three directors and hold the meeting in South Dakota. The corporation must also be authorized to transact business in South Dakota.
The purpose of the meeting is to elect directors and approve the articles of incorporation. At this time, you should also decide if you want your nonprofit to be tax-exempt (501(c)(3), 501(c)(4), etc.). If so, it will need an Employer Identification Number (EIN). This can be done by filling out Form SS-4 Application for Employer Identification Number or EIN online. You’ll also need a registered agent in South Dakota who can accept service of process on behalf of any court actions involving your nonprofit.
Step Five: Adopt Bylaws
Once you have all the necessary documents, it’s time to adopt the bylaws. These are the rules of your nonprofit organization and should be as specific as possible. There are many places to find model bylaws online, so don’t worry if you’re not sure where to begin. The most important thing is that they are short, simple and easy to understand for members and potential board members alike.
Step Six: Create a Corporate Records Book
- The corporate records book is a collection of important documents that create and define your nonprofit organization.
- Included in this book are:
- Certificate of Incorporation (the official document that creates your legal entity)
- By-Laws (a set of rules governing how your organization operates)
- Minutes from board meetings, annual reports, and resolutions passed by the board
Step Seven: Apply for Federal Tax Exemption under Section 501(c)(3) of the Internal Revenue Code
With the proper application and documentation, you can have your nonprofit recognized as a 501(c)(3) entity. This designation will exempt it from federal income tax and allow donors to write off contributions from their taxes.
When submitting an application for tax-exempt status, make sure that you include all of the necessary documentation as well as an accurate financial statement for the past three years (if applicable). You will also need to register with both the state and county in which your organization’s headquarters are located.
The benefits of being tax-exempt include receiving more generous donations without having to worry about paying corporate or personal income taxes on those donations; receiving grants from foundations; volunteering more easily; not having to pay self-employment taxes on any wages paid by nonprofits; participating in local government campaigns such as bond issues; being eligible for certain types of loans at lower interest rates; having access to grants intended specifically for nonprofits
Starting a nonprofit in South Dakota is pretty easy, but it’s not something to do without a lot of thought and preparation.
Starting a nonprofit is not for the faint of heart. You will have to do a lot of research and planning before you can even apply for non-profit status, so make sure that you know what you’re getting into. There’s nothing wrong with taking your time in the planning process because it can be very helpful in making sure that all the pieces are in place.
One thing that I would recommend is making sure that your board members are actively involved throughout this process. If they’re not engaged and excited about what they’re doing, it’s going to show when it comes time for them to help with fundraising efforts or advocate on behalf of your organization at events like galas or conferences where other people are present who might be interested in donating money or other resources (including volunteers).
Another benefit of having an amazing team behind you is being able to share ideas more freely than if there were just one person doing everything on their own without any input from others who may have better ideas than their own – especially since many nonprofits rely heavily upon donations from outside sources such as corporations or individuals alike; these types of relationships cannot exist unless everyone involved understands his/her role within each organization which means having open communication among those involved!
Conclusion
In sum, starting a nonprofit in South Dakota is a great way to make your community a better place. The process of forming the organization and applying for tax-exempt status with the IRS can be daunting, but it’s not difficult once you know what steps to take.
