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How To Start A 501c3 In Florida

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If you want to run a nonprofit corporation but do not know how to start a 501c3 in Florida, then we are going to tell you everything about how to start a 501c3 in Florida in this post.

·       What is a 501c3

In order to know how to start a 501c3 in Florida, you must first know what it is. 501c3 is a subsection in under the Internal Revenue Code of the United States and relates to the tax laws of nonprofit corporations. According to 502c3, nonprofit corporations are exempted from paying taxes if the activities they conduct have the following purposes:

  • Charity
  • Religious
  • Public safety
  • Education
  • Scientific
  • Preventing cruelty to animals or children
  • Fostering amateur sports competitions

If you want to start a nonprofit corporation that has one of the aforementioned purposes, then you will have to register your corporation under 501c3. Read on to know more about how to start a 501c3 in Florida. You can also call us at 407-344-1012, or email us at info@freedomtaxfl.com and we will help you set up your 501c3 in Florida.

·      How to start a 501c3 in Florida

If you are wondering how to start a 501c3 in Florida, There are many steps that need to be completed before you establish a 501c3 nonprofit corporation in Florida. Apart from this, you have many considerations to make when you are getting a 501c3 and you need to weigh down the advantages and disadvantages to see if you are making the right decision.

–      Step 1: Choose the people who will be on your board of directors

In order to start a 501c3 in Florida, you need to have at least three members on your board of directors to be eligible to file your nonprofit corporation. At least 3 of your directors must be older than 18 years.

–      Step 2: Create a name and a mission statement for your nonprofit corporation

This is an obvious thing to note. When you are thinking of how to start a 501c3 in Florida, you need to come up with a name and a mission statement. This allows you to be recognized as a nonprofit corporation and allows you to establish your purpose.

  • Choosing a name for your nonprofit corporation

The main thing you need to know when you are learning how to start a 501c3 in Florida is that the name you select for your corporation cannot be same as the name of any other 501c3 corporation, which is registered with the Department of State in Florida. It is also necessary for the name of your 501c3 corporation to have the either “incorporated” or “corporation” at the name. It isn’t allowed to name your nonprofit corporation as “company” or “co”

  • Creating a mission statement for your 501c3 corporation

To create a mission statement for your 501c3 corporation, you need to write down the main points first and then explain them in detail in the rest of your statement.

Step 3: Getting your nonprofit corporation registered and

–      What you need to prepare and file a nonprofit corporation with the Department of State in Florida

Another thing you need to consider when thinking of how to start a 501c3 in Florida is what you need to do to have it registered with the Department of State in Florida. Here is a list of what you need to start a 501c3 in Florida:

  • Filed Article of incorporation with the Secretary of State in the division of Corporations, Florida
  • Create Bylaws
  • Designate a registered agent
  • File an annual report with the Division of Corporations in Florida a year after you incorporate
  • Create Bylaws
  • Hold a meeting with the board of directors in your nonprofit corporation
  • Create records in a record book used to record your expenses
  • Obtain an employer registration number
  • Apply for tax exemption from the IRS and the Department of Revenue in Florida
  • Register with Florida’s Division of Consumer Services
  • Resister with the Florida’s Department of Revenue
  • Register with the IRS to and the state of Florida to be able to hire employees for your nonprofit corporation

Other important details you need to note when planning on how to start a 501c3 in Florida, is that you need to create and file the nonprofit articles of incorporation with the Department of State in Florida. In the articles, you will need to provide the following details:

  • Your nonprofit corporation’s name and the street address of your location
  • Your nonprofit’s specific purpose (and not the general purpose of statement)
  • The name and street address in Florida of your registered agent
  • The manner in which the directors are elected and appointed
  • The procedure of your election and appointment of your board of director

The articles of corporation form can be filled online from the Department of State’s website and you then have to print it and mail it to the department. You will find all the instructions to complete your form from the instructions on the Secretary of the Commonwealth’s website.

After you are done with this, the next step you need to know when thinking about how to start a 501c3 in Florida is filing for a tax exempt from the Internal Revenue of State (IRS) on the basis of 501c3

–      How to file a 1023 federal tax exemption form to for your nonprofit corporation

To receive 501c3 tax exemption status from the IRS, you need to use some specific language styles in your articles. This includes a statement of purpose that meets the IRS requirements, dissolution of assets dedicating your assets to another 501c3 corporation among dissolution and a statement that your 501c3 corporation will not engage in any prohibited political activity of any legislative activity which isn’t allowed.

When filing your form to apply for tax exemption application, you need to ensure you include the language and style needed to file tax exemption under Federal Tax laws. Creating and registering a nonprofit corporation in Florida does not automatically exempt you from taxes, as the corporations are exempted from paying taxes federally. To get the tax exemption status for your nonprofit corporation, you need to apply by filing the form 1023 to the IRS.

·       More about form 1023

Form 1023 is titled: Application of Recognition of Exemption Under Section 501c3 of the Internal Revenue Code and is a long form which requires a lot of details to be filled. Some of the things you need to fill out in the form are:

  • History of your corporation
  • Where you get your finances
  • Your nonprofit Corporation’s structure
  • Operations of your corporation
  • The Governance policies of your corporation
  • Your nonprofit corporation’s activities

The 1023-EZ from has fewer details and if you have a small nonprofit corporation (an annual gross spending of $50,000 and less than $250,000 as total assets), you will be eligible for a streamlined application with the 1023-EZ form. While this is something you can probably do on your own, but it is still a good idea to consult and opt for the services from a migration agent. To know more about whether you need to file a 1023 form or a 1023-EZ form, check out the requirements of each form from the registered agent who will explain you everything you need to know about how to start a 501c3 in Florida

Once you have your tax exemption, you need to get an exemption from the Department of State in Florida. This will include exemption from taxes from income, sales, property and other state taxes. To know how to start a 501c3 in Florida and opt for a tax exemption from the state of Florida, you need to visit a registered tax agent to know what details you need to provide when applying for tax exemption.

What to consider when starting a 501c3 in Florida

Now that you already know how to start a 501c3 in Florida, you need to think about the advantages and disadvantages and other important details to decide if you really want to start a nonprofit corporation in Florida as knowing how to start a 501c3 in Florida is not enough, it is also important to know what advantages and disadvantages.

v  A glance at the advantages of starting a nonprofit corporation

  • Non profits corporations in Florida qualify for a tax exemption status regarding corporate income, property and other taxes mentioned on the tax exemption form. This is beneficial because you wouldn’t have to pay taxes on the income generated from welfare efforts and the property used to conduct nonprofit activities.
  • The assets or property used by the corporation belong to the corporation. This is a good way to insure your property against law suits or claims by creditors. This is one of the most important reasons to know how to start a 501c3 in Florida. However, it is important to note that it is only the assets under the name of the corporation are vulnerable, and not the personal property of trusties, managers or officers working in the corporation. This incorporation provides a legal entity and gives protection to the members of its corporation.

v  Considering the disadvantages of starting a nonprofit corporation

  • Understanding how to start a 501c3 in Florida takes a lot of time since there is a lot of detail
  • The process of planning how to start a 501c3 in Florida is also very long and complicated and you will need to commit your time and efforts to the cause
  • You are not going to have complete control, independence and autonomy in corporate governance so if you want all of that, then a nonprofit status might not be appropriate for you.

How to retain your tax exemption status as a nonprofit corporation

Knowing how to start a 501c3 in Florida is not enough, you must also do what it takes to keep your status as a nonprofit corporation. To maintain your nonprofit status, you need to run your corporation with corporate formalities. It is your choice whether you want to have your decisions done with a voting system or whether you want to have all the decisions taken by the board of directors. However, since it is a corporation, it will not be owned or shared by anyone, and in case you wish to abolish the corporation, you and your board of directors will have to discuss how to distribute the assets of the nonprofit.

In addition, you will also have to maintain a corporate book of records to maintain the liability of your corporation and to keep track of where you are spending your funds.

·       Restrictions on Non Profit Corporations

Knowing how to start a 501c3 in Florida is just as important as knowing what to do (or what not to do) to maintain that hard earned status. In order to maintain the tax exemption, nonprofit corporations need to get work according to the following six rules:

  • The Nonprofit corporation can engage only in limited political lobbying

Your nonprofit corporation can only lobby political causes to a certain extent. In it is found to have influenced any legislation to a substantial degree, your corporation will lose its non profit and tax exempt status. The IRS has set a limit to the amount of money nonprofit corporations can spend on political activities and campaigns.

  • Your Nonprofit corporation can not financially contribute to any political campaigns

When you are thinking how to start a 501c3 in Florida, you should know that it might not be right for you if you are among those who want to contribute money to political campaigns. The money earned from non profit and tax exempt groups cannot make contributions or participate in political campaigns. If a nonprofit is found to be engaged in any such activity, then the IRS reserves the right to revoke their tax exempt status and asses a special excise tax against the managers as well as the corporation itself.

  • The Directors, officers and Members of the nonprofit corporation cannot distribute the assets earned by the nonprofit corporation among themselves

The directors, members or officers of a nonprofit corporation are not allowed to get any financial benefit from the corporation. They can however, receive a salary and be entitled to expenses.

  • The Nonprofit corporation must pay income taxes on the profits earned by activities unrelated to the stated purpose or activities of the corporation

Nonprofit corporations are only exempt from the income taxes from the income earned by the activities they mentioned when they registered the corporation such as their charitable activities. If the corporation receives any income from an unrelated source, it will have to pay income tax. The IRS requires that a nonprofit corporation pays income taxes on profits exceeding $1000 earned through any unrelated activity.

  • The nonprofit corporation must distribute all its assets to a tax exempt group on dissolution

A nonprofit corporation cannot be sold. When the boards of directors decide to dissolve a nonprofit corporation, all the assets under the name of the corporation must be donated to another tax exempt group. This means that any property donated to a nonprofit corporation cannot be sold or distributed to its members or directors later.

  • The Corporation cannot receive and substantial profit from any other unrelated activity

If your nonprofit corporation receives substantial profits from unrelated activities, then the nonprofit status of the corporation may be revoked and you will have to pay taxes on the income earned form these activities. If you want to earn profits from any unrelated activity or if you spend a substantial amount of time in unrelated work, then you should talk to a corporate lawyer to guide you better in this regard.

After you have followed all the rules, you need to take a few additional steps that we have mentioned when we were talking about how to start a 501c3 in Florida. Those steps are:

  • Filing the articles of incorporation with the Secretary of State of the Divisions of corporations in Florida
  • Filing an annual report within a year of your nonprofits incorporation. After this, you will have to do it every year between Jan 1 and May 1. The last date for submission of annual report is May 1 and once the date is crossed you will have to give late fees to file your report.

How much does it cost to form a nonprofit corporation?

Knowing how to start a 501c3 in Florida is one thing, thinking about how much forming a nonprofit corporation is going to cost you is another. Florida charges a fee of $35 for filing nonprofit articles of incorporation. It is also important to be registered with a designated agent which costs about $35. If your corporation has revenues lesser than $10,000 you will have to give an application fee of $400. If you earn more annually, then the fees are $850.

Florida charges a $35 filing fee for nonprofit Articles of Incorporation. You also must file a registered agent designation, and this costs $35. The IRS charges a $400 application fee if your corporation’s annual revenues are less than $10,000. Otherwise, the fee is $850.

This is all you need to know on how to start a 501c3 in Florida. We hope you find this information useful and if you think it can help someone else, please share this blog post to help anyone else wondering how to start a 501c3 in Florida. You can also call us at 407-344-1012, or email us at info@freedomtaxfl.com and we will help you set up your 501c3 in Florida.

 

Robert AcevedoHow To Start A 501c3 In Florida

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