Organizational Structure
Incorporation
Note: Articles published before January 1, 2017 may be out of date. We are in the process of updating this content.
By incorporating your nonprofit you create a legal entity whose primary function is to provide limited personal liability protection to those managing the organization. To incorporate you need to file articles of incorporation with a state agency that usually is located under the auspices of your Secretary of State.
Make sure you have a copy of your state's nonprofit corporation statutes. These laws supersede all your other internal regulations and policies. You need to be familiar with your state requirements before you draft your bylaws. Here is a link to all the statutes - unfortunately some of them are not so easy to navigate! http://www.prairienet.org/~scruffy/f.htm The office where you incorporate should also be able to provide you a copy. Or, if you have a state nonprofit association, it should be able to help http://www.councilofnonprofits.org/salocator.
Your articles are a binding legal document. Most states have straightforward forms that you fill out and then file with the state. The main issues addressed in the articles include
- Name of the corporation
- Choose a name that reflects well your organization's purpose and that cannot be confused with another organization.
- Register your name to avoid anyone else using it later on. Contact your own office of the Secretary of State and see the links below for guidance and examples.
- Purpose of the organization
- In your articles be as broad as you can to allow for future evolution of the organization's activities.
- Duration of its existence
- Most nonprofits are formed to exist in perpetuity.
- Location of its offices
- Provide the address of its office or its ‘headquarters.'
- Names and addresses of the incorporators
- These are the individuals who file the articles of incorporation; not necessarily your future staff or board members.
- Structure of the organization related to its membership
- If you form a formal membership organization where the members elect the board and approve major organizational decisions, you need to define the categories and levels of authority of your members.
- Provisions for distribution of its assets in case of dissolution
- If you form a public charity, your articles must clearly state that in case of dissolution the leftover assets will be distributed to another charity and may not inure to the benefit of a private individual or other non-charitable entity.
Name registration