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NON-PROFIT ORGANIZATIONS IN THE USA (based on the example of Wyoming)
Choosing a legal structure
- Most nonprofit organizations in Wyoming incorporate as nonprofit corporations.
- Nonprofit corporations provide limited liability protection for directors and members.
- Another option is to form an unincorporated association, but this is less common due to the broader liability.
Registration process
- To form a nonprofit corporation in Wyoming, you must file Articles of Incorporation with the Secretary of State. The Articles of Incorporation must contain basic information about the organization, including the name, purpose, and information about the registered agent and founders.
- You must have a registered agent with a physical address in Wyoming. For non-residents, this is possible through specialized agency services.
- After incorporation, the first organizational meeting of the board of directors must be held to adopt the bylaws and elect officers.
Tax status
- To obtain 501(c)(3) status and federal tax exemption, an organization must file Form 1023 or 1023-EZ with the IRS. The articles of incorporation must include a purpose and terms of dissolution that meet IRS requirements.
- Nonprofit organizations may have tax exemptions at the state level, including sales tax, property tax, and franchise tax exemptions. The procedure for obtaining state tax exemptions is separate from the federal process and usually involves filing an application through the state department of revenue.
- Even without employees, an organization must obtain an EIN for tax purposes and to open a bank account. Non-residents can apply for an EIN online or by fax/mail.
Bank account
A bank account in the name of the organization is required for financial transactions.Reporting
- Nonprofit organizations in Wyoming must file an annual report with the Secretary of State.
- Organizations that are exempt from federal taxes must file annual Form 990 returns with the Internal Revenue Service (IRS).
- The complexity of the form depends on the gross income and total assets of the organization.
Fundraising
Follow the afundraising rules that apply in Wyoming. If you are soliciting donations in other states, follow those states' charitable regulations.
Maintain honest and transparent fundraising practices to maintain public trust and to qualify for tax exempt status.
Compliance
Comply with annual reporting requirements and update registration information as necessary.
Ensure that organizational and financial practices comply with state and federal laws.
Failure to do so may result in fines, loss of nonprofit status, or liquidation.Professional support
Given the complexity of nonprofit regulation and tax-exempt status, as well as the need to ensure ongoing compliance (especially for non-residents who are not familiar with U.S. and state laws), the assistance of nonprofit law professionals is essential.
Contact us for legal and tax support. We will help you with the registration process, filing with the IRS, and obtaining tax exemptions.
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