How to Form a 501(c)(3) in the State of Florida
A 501(c)(3) is a nonprofit organization that qualifies for federal and state tax exemptions; most, but not all of them, do. Applying for 501c3 status involves filing many documents with the IRS and the state in which your organization is located. While the federal portion of any application remains consistent, each state has different requirements for 501(c)(3) applicants. Read on to learn how to form a 501(c)(3) nonprofit in Florida!
- Launching Your 501(c)(3) in Florida
- Before Applying for Tax-Exempt Status in Florida
- Applying for Tax-Exempt and 501(c)(3) Status
- Summary & Definitions
- Final Thoughts
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Launching Your 501(c)(3) in Florida
Location impacts your 501(c)(3) application in more ways than one. Each state has bylaws that apply to applications and different offices that process them. For example, organizations must file with the state Department of Agriculture and Consumer Services in Florida. This is due to the Solicitation of Contributions Act, which regulates the state's solicitation and use of charitable donations.
Before Applying for Tax-Exempt Status in Florida
Before applying for your nonprofit’s tax exemption, you need to have much of its structure in place. If you are starting from scratch, there is a lot of work you must do before you can get your 501(c)(3) status. Luckily, if you follow all the right steps and fill out all your forms correctly, this process does not need to be too difficult. Here are some important milestones you must reach before applying for tax-exempt status in Florida.
As with anything, you will have an easier time applying for nonprofit tax exemption if you thoroughly research the process beforehand. To start, review the IRS Application for Recognition of Exemption and Florida Non-Profit Corporation Filing form. Second, explore what defines, exactly, a Floridian nonprofit organization; Florida’s complete statutes can be found on the state website. When forming your nonprofit and filing for tax exemption, you must document your organization’s purpose and intent. So, at this stage, ensure you have a firm grasp on your organization’s mission; it will guide you later on.
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Name Your Organization
Naming your nonprofit organization serves several purposes. From an organizational standpoint, your name reflects who you are, what you stand for, and the kind of work you do. Therefore, choosing a name that captures the spirit and mission of your charity is a crucial step to attain early in this process. Moreover, it ensures your organization has a chance of gaining tax-exempt status. There are several state laws that communicate this fact.
Pro Tip: It is important to note that you must make sure your name is available in the state of Florida. Unfortunately, you cannot choose a name that already belongs to a different organization. You can search for corporations in the state with the help of an application that can be found on the Florida Divisions of Corporations website. This is a valuable resource!
Your name must also not contain words that may mislead people into believing you are associated with a government agency. This means it cannot contain certain words like "bank", "cooperative", "federal", "national", "United States", or "reserve". On the other hand, all Florida nonprofits must have "Corporation" ("Corp.") or "Incorporated" ("Inc.") in their name. Your nonprofit may not have the word "Company" ("Co.") in its name in the state of Florida.
It is also advisable to check and make sure that a corresponding domain name for your organization is available. While it is not essential, having a viable website can make life easier once your nonprofit has been established.
Set Up Your Nonprofit’s Governing Structure
Like your name, the governing structure behind your nonprofit organization will be essential both during the filing process and beyond. When establishing your organization in Florida, you must follow some organizational structure guidelines.
The governing structure of your nonprofit must include a board of directors and appointed Officers. The board of directors oversees your charity’s more extensive operations but has no individual authority. The directors often hire the officers and hold authority regarding certain aspects of the corporation’s activities. There may be some overlap between officers and directors if allowed by your organization’s bylaws (as addressed in the following section).
Your board of directors must include at least three individuals who are not related to each other. Per the state of Florida, all directors must be over 18. However, nonprofit board members can be as young as 15. There is no residency requirement for members of the board of directors in Florida.
Another step to note in this process is the importance of recruiting an incorporator, which can be a director (and often is one), an owner or part owner of your organization, or member. Your incorporator(s) will be the individual or individuals responsible for officially signing the Articles of Incorporation later.
It is important to establish your governing structure early. When registering your nonprofit in Florida, you will need a board of directors and officers to carry out much of the work anyway. Many official forms and documents will need to be signed or approved by the board or the officers during this process.
Form Bylaws and A Conflict of Interest Policy
All nonprofits must establish organizational bylaws and a Conflict of Interest Policy to be eligible for 501(c)(3) status. Your bylaws will establish procedures for your corporation, from electing officers to holding meetings. When setting up your bylaws with the goal of receiving tax exemption, you must make sure to comply with all Florida state laws. In addition, the board must approve any bylaws the directors propose.
The IRS does not require a Conflict of Interest Policy to receive tax-exempt status, but the state of Florida does in most cases. Your Conflict of Interest Policy protects directors and officers from improperly receiving personal benefits through nonprofit work. Your 501(c)(3) application should include a signed statement assuring that all board members have read and agreed to the Conflict of Interest Policy.
Appoint a Florida Registered Agent
Your nonprofit must have a registered agent who resides in Florida to qualify for 501(c)(3) status. Your appointed agent must have a legitimate residential mailing address in the state. The agent’s role is to be the first point of contact between the state and your organization. In addition, this individual is responsible for receiving important legal documents and paperwork on behalf of your organization.
If you do not appoint an individual as your agent, you may also hire a registered agent service. In this case, a registered corporation will perform the duties of an agent for your nonprofit. This option is costlier but can be more convenient for those who can afford it for a variety of reasons. First, a registered agent’s address will be a matter of public record, which can cause privacy concerns for some. Second, your agent must also be available to accept paperwork from the state at all times. This can be difficult to keep up with in some cases.
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You must file a registered agent designation, the fee of which is $35.
Pro Tip: Anybody can be registered as an agent, provided they live in Florida and are over 18. No legal background is required, though some familiarity with legal documents is usually beneficial.
Articles of Incorporation
Your Articles of Incorporation will be one of the most important documents in your application process. It must be sent to the Florida Division of Corporations, for a $35 filing fee. A full breakdown of the Florida nonprofit Articles of Incorporation requirements can be found on the Florida State Department website. These Articles will outline many things about your corporation to the state, including:
The name, street address, and mailing address of your nonprofit. The street address and mailing address may be the same.
The name, signature, and address of your Florida registered agent (which must be a home address in Florida - a P.O. box is not acceptable).
Your corporate purpose. This should be more detailed than a generic mission statement. Your statement of purpose should outline the specific need your organization will fulfill or role it will perform.
The names and addresses of all officers and directors.
Your officer election and appointment process. Such information will usually be covered in your bylaws.
The date in which your organization begins operating. This is usually the day your Articles of Incorporation are received and filed by the state. However, you may specify an effective date up to five days before or 90 days after filing.
The signature of your Incorporator.
A valid email address for contacting the corporation.
You may also request a certified copy of your Articles of Incorporation, but this is not required.
File for a Florida Certificate of Status
A Florida Certificate of Status (also called a Certificate of Authority or Good Standing) is an official document from the state confirming that your corporation is registered to do business in Florida. The Florida Division of Corporations issues the Certificate of Status. This step naturally follows many of the previous actions. Once you have followed all the rules above to make your organization compliant, you are eligible to receive your Certificate of Status. You can apply for your Florida Certificate of Status on the Florida Division of Corporations website.
Apply for a Federal Employer Identification Number
You must also apply for a Federal Employer Identification Number (EIN) through the IRS. The IRS uses your EIN to identify your organization for tax purposes. You can apply for a Federal Employer Identification Number on the IRS website.
Applying for Tax-Exempt and 501(c)(3) Status
Applying for 501(c)(3) status is separate from registering your nonprofit with the state and IRS. Not all recognized nonprofits will be endorsed as 501(c)(3)’s. Moreover, applying for tax exemption is separate from applying for 501(c)(3) status; you need to be approved for the former to even be considered for the latter.
To be eligible for 501(c)(3) status, your organization must comply with all IRS requirements. Most importantly, your organization must not operate to benefit private interests. That means your directors and officers cannot profit directly off of your organization’s earnings and that your organization may not lobby as a substantial part of its activities.
Federal Tax Exemption
Most nonprofits will use Form 1023 from the IRS when applying for 501(c)(3) status. However, smaller organizations may use Form 1023 EZ, a less detailed and more streamlined document. Organizations with annual receipts under $50,000 and total assets under $250,000 are eligible to use Form 1023 EZ.
Form 1023 (or 1023 EZ) is used exclusively by nonprofits filing for 501(c)(3) status. Organizations filing under any other tax-exempt section must use Form 1024.
Obtain Your Florida State Tax Exemption
After the IRS has processed your application, you will receive a Letter of Determination. This letter will grant your organization 501(c)(3) federal tax-exempt status if approved. It will also allow you to apply for tax-exempt status in Florida; you must apply to the Florida Department of Revenue.
Summary & Definitions
Understanding each of these documents and definitions really should be the foundation of any organization’s attempt to apply firstly for tax-exempt status, and once approved, for 501(c)(3) status. Make sure you have a firm grasp on the purpose of each of these terms.
Required 501(c)(3) Application Documents
Articles of Incorporation - The Articles of Incorporation document a corporation's key is identifying information and organizational structure. This document is used to register nonprofit organizations in the state of Florida.
Bylaws - Your organizational bylaws outline the rules and procedures for conducting operations within the corporation.
Form 1023 - Form 1023 is the official IRS document filed by corporations seeking to receive 501(c)(3) tax-exempt status.
Form 1023 EZ - Form 1023 EZ is a shorter, more streamlined version of Form 1023, intended for smaller nonprofit organizations.
Certificate of Status - A Florida Certificate of Status is awarded to all corporations registered and allowed to conduct business in Florida.
Federal Employer Identification Number - This number is used by the IRS to identify a corporation for tax purposes.
Letter of Determination - Document provided by the IRS that either grants or denies an organization 501(c)(3) tax-exempt status.
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501(c)(3) - A 501(c)(3) organization is an officially recognized charitable, religious, or educational organization that received tax-exempt status from the IRS.
Florida Department of Agriculture and Consumer Services - The FDACS is a branch of the Florida state government that serves to protect the state’s environment, agriculture, and consumer products.
Florida Department of Revenue - The Florida DOR is responsible for administering all Florida state tax laws for individuals and organizations.
Florida Division of Corporations - The Florida Division of Corporations is responsible for indexing and certifying all corporations based in Florida.
IRS - The Internal Revenue Service is the branch of the federal government responsible for administering federal tax law.
Your organization can receive 501(c)(3) tax-exempt status as long as it is a nonprofit corporation that does not serve private interests and remains compliant with state and federal laws. When applying for 501(c)(3) status, you must follow one step at a time. You will not be granted tax-exempt status if any part of your application is incomplete.
Your tax-exempt status relies on continued compliance with state and federal laws. Once you receive 501(c)(3) status, you cannot then begin operating in a way that would exclude you from tax exemption. You must continue to file annual reports with the state of Florida, for instance, and continue to operate as a nonprofit entity. Your 501(c)(3) status grants you the freedom to perform charitable work for your community without paying taxes; do not pass up on or sabotage this valuable opportunity!
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💡How do I form a 501c3 in Florida?
As with all matters of business and operation, start by conducting research and speaking with a lawyer. The general steps are to name your organization first, and then determine your governing structure, conflict of interest policy, and bylaws. Appoint a registered agent, write your articles of incorporation, and secure a Certificate of Status and Employer Identification number. After you do all of that, you can apply for your federal 501(c)3 status. Find out more.
🔑 How much does it cost to form a 501c3 in Florida?
The 501 filing itself costs $600, and you can expect another $70 to $100 in state filing fees for things like your Certificate of Status. These costs do not include things like lawyers and registered agents. Find out more.
📝 What is a Certificate of Status in Florida?
The Florida Certificate of Status is the formal name for the general Florida business license. It is an assurance from authorities that you are registered and approved to conduct business in the state. Find out more.