How to Start a Nonprofit in West Virginia

Introduction

It’s possible to start a nonprofit organization in West Virginia without having to make the transition from for-profit status. However, if you want to make your business more legitimate and protect yourself from any potential legal issues down the road, an LLC is not as important as getting tax-exempt status. In this article, we’ll cover how to set up an accounting system and get your nonprofit approved by the IRS so that you can begin fundraising and other activities without fear of being audited or investigated.

Start as a for-profit entity.

Before you can apply to become a nonprofit, you will need to register your business as a for-profit entity.

• Choose a name for your business.
• Choose the legal structure of your organization (e.g., corporation or limited liability company).
• Choose an address where you will be conducting business (i.e., physical location).
• Open an account with one of our recommended banks.

Obtain tax-exempt status.

The next step is to apply for tax-exempt status. All nonprofits must complete a Form 1023 Application and submit it with the required documentation to the IRS.

The IRS requires that you include the following information in your application:

• A statement of your organization’s purposes and activities. In other words, what do you want to accomplish? This should be brief; a paragraph or two will suffice.
• A description of how the organization plans to accomplish its stated purposes (for example, by carrying out programs in the community). This should also be brief; a few paragraphs are enough unless your organization is very large or has multiple locations or programs across different states or countries.
• A description of any significant non-cash contributions received during the past 12 months (such as donations of equipment). If possible, state how many people benefited from each contribution—and if appropriate, how many were children served by each contribution—along with any other information relevant to value (e.g., weight) and usage history (e.g., date purchased). If there was no such contribution made during this time period, explain why not and when such contributions might reasonably be expected in future years if they have not been made already (i.e., one year prior to applying would likely suffice).

Set up your accounting system.

You should also make sure your accounting system is up to date. Many nonprofits use paid software for their accounting needs. Other nonprofits utilize cloud-based solutions that keep track of all financial transactions and provide easy access as well as backup protection against loss of data.

It’s important to have an accounting system because it will help you keep track of your finances and make sure that everything is running smoothly throughout operations at the NPO.

File the West Virginia Annual Report and Business Registration Form.

The West Virginia Annual Report and Business Registration Form is the form you file annually with the West Virginia Secretary of State. It can be filed online, and it is simple enough that most nonprofits should be able to complete it without help from an attorney or CPA.

In addition to filing this form annually, if your nonprofit is registered as a business in another state, you must also file an Annual Report and Business Registration Form for each year that you do business in West Virginia.

You need to take a few administrative steps in order to make your nonprofit official in West Virginia.

In order to make your nonprofit official in West Virginia, you will need to take a few administrative steps.

• File an annual report and business registration form
• Obtain tax-exempt status
• Set up an accounting system

In order to begin as a for-profit entity, you need:

• A board of directors consists of at least three people who are not related by blood or marriage. You can also have one or more general members of your nonprofit serve on the board; these members must be approved by the state prior to the election and must hold no less than a 3% stake in the corporation (i.e., if 100 shares exist and there are 10 general members, at least three should hold no less than 30 shares).

Conclusion

Once you have set up your nonprofit, make sure to keep it running smoothly. This is a big responsibility, and there are many things you need to do on a regular basis. If you get overwhelmed or confused by all of this information, don’t worry! We are here for you every step of the way—just give us a call or stop by our office for more information about starting your own business.