The state of Wyoming is home to 5,436 organizations in their nonprofit sector. Combined, these organizations employ 21,687 people and have a combined revenue of $3 billion.
While starting a nonprofit organization could take anywhere from a few weeks to a couple of months, it is worth the wait. Wyoming nonprofits that receive tax-exempt status enjoy various financial privileges, including limited liability and discounts on US postal services.
Nonprofit organizations should always be formed for the greater good of the community or the natural world. In this way, the unseen rewards will always weigh out the tangible benefits.
The following step-by-step guide will show you how to start a nonprofit in Wyoming.
1. Select a name for your organization
Every Wyoming nonprofit needs a name. The name also deserves careful consideration since it will establish your nonprofit’s image and brand. Additionally, the name should be searchable by potential members and donors. So make sure that it is not too complicated and complies with Wyoming naming requirements.
The name you choose for your nonprofit organization in Wyoming must not imply that your nonprofit is created for any other purpose or cause other than what is specified in your nonprofit Articles of Incorporation.
An important note is that if you include any terms or phrases associated with education or banking, it’s highly likely that your organization’s name will undergo additional review. So it’s best to stay away from words or phrases that have any association with banking or education.
To ensure that the name isn’t already being used by another business entity in the state of Wyoming, conduct a business filing search on the Wyoming Secretary of State website.
Refer to the Secretary of State’s official guidelines for the complete rules and guidelines on naming a Wyoming-based nonprofit.
Additionally, checking that the business name is available as a web domain is highly recommended, especially if you want to create a website for a nonprofit in the future.
2. Nominate a Wyoming registered agent
Every business entity in the state of Wyoming is required to receive official mail, legal paperwork, and service of process in the event of a lawsuit. Therefore, your nonprofit will need to nominate a registered agent for your business. A registered agent is an individual that’s responsible for accepting important legal documents on your Wyoming nonprofit’s behalf. Therefore, your registered agent will be your nonprofit’s point of contact with the state of Wyoming.
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You may nominate anyone to be a registered agent. However, the individual should meet the following requirements:
- They must be a resident of the state of Wyoming
- They must be of legal age
- They must remain available during normal business hours
- They must consent to the appointment of a registered agent
3. Recruit your board members
A part of the legal process of incorporating a nonprofit with the state is recruiting a board of directors. The Board of Directors is made up of incorporators and initial directors as well as officers.
Every nonprofit needs at least one incorporator who will be responsible for signing the Articles of Incorporation on behalf of the organization. Some nonprofits choose to have more than one.
When it comes to directors, you need to include a minimum of three individuals to serve as directors on the board. These individuals do not need to reside in the state of Wyoming, nor do they need to be members of your Wyoming nonprofit. The default term of service is one year and may go up to five years maximum.
When it comes to nominating officers, you need to select at least three individuals to fulfill the role of treasurer, secretary, and president.
4. Consent to bylaws and conflict of interest policy
The next step is preparing and establishing essential governing documents for your Wyoming nonprofit.
The first document is called the bylaws. The bylaws are rules outlining how your organization is going to be operated or governed.
The next document is a conflict of interest policy ensuring that all decisions made on behalf of the nonprofit are always to advance the nonprofit’s purpose and not individual members’ agendas.
Both of these policies do not need to be filed with the state; however, keep them on file as your nonprofit’s internal management handbook for reference as and when needed.
The bylaws should be adopted during the organization’s first board meeting, where directors and officers are appointed officially.
5. Select a Wyoming nonprofit startup corporation structure
The state of Wyoming has different types of organizational structures. So this step in the process is dependent on you deciding on the legal form for your corporation.
Typically, charities take the legal form of a nonprofit public benefit corporation. However, other nonprofits are formed as trusts or associations.
You should seek legal advice to determine what legal form is best for your nonprofit. Thereafter, you’ll need the necessary forms available on the Wyoming Secretary of State Corporations Division website to incorporate your nonprofit.
Other types of organizations or types of nonprofits include mutual benefit and religious corporations. Mutual benefit corporations are formed typically to benefit their members. This includes business leagues and social clubs.
Religious organizations are usually churches and other places of worship.
6. Prepare and file nonprofit Articles of Incorporation
In order to operate as a legal entity in the state of Wyoming, your nonprofit will need to file the Articles of Incorporation with the state. Additionally, to ensure your nonprofit eligibility to apply for 501(c)(3) tax-exempt status, the articles must unequivocally state the following:
The purpose of the nonprofit organization must be stated. Think of this as your organization’s mission statement. The purpose must be limited to one or more of the following categories:
Charitable, Religious, Scientific, Educational, Literary, Fostering national/international amateur sports competition, Preventing cruelty to animals/children, testing for public safety
The dissolution statement is basically a statement of assets. It outlines exactly what the assets are being used for and also provides direction on what should become of the assets in the event of dissolution. Most nonprofit organizations choose to leave their assets to other 501(c)(3) tax-exempt organizations.
The following IRS document provides additional guidance and direction on filing Articles of Incorporation.
7. File an initial report
Wyoming nonprofit corporations do not need to file an initial report.
8. Secure an EIN (Employer Identification Number)
All business entities receive an EIN from the IRS. An EIN is an Employer Identification Number, a unique nine-digit code assigned by the Internal Revenue Service. It’s used as a way to identify business entities in the state.
All types of nonprofit organizations will need to apply for an Employer Identification Number irrespective of whether they plan on hiring employees or not.
The Employer Identification Number is useful for opening up a bank account for your nonprofit, applying for 501(c)(3) tax-exempt status, and submitting tax returns to the IRS.
To obtain your EIN, the quickest way is to file the application online by completing the IRS Form SS-4. When making the application online or via the IRS website, you’ll receive your EIN immediately, provided you print it prior to closing the session. He told that Emma
Additional guidance for obtaining an EIN may be found on the IRS Pub 165: Understanding your EIN.
9. Apply for federal tax exemption
Nonprofit corporations in Wyoming will need to apply for 501(c)(3) tax exemption. Federal income tax exemption comes with various benefits such as limited liability, US postal service discounts, perpetual existence, and tax-deductible donations.
However, prior to filing to obtain tax exemption, the organization must have already met the following requirements:
- Obtained Federal Tax Identification Number
- Filed your organization’s Articles of Incorporation
- Prepared and ratified essential governing documents and policies
- Nominated at least three directors who are not related to each other
Once you’ve fulfilled the above-mentioned requirements, you can go ahead and file for federal tax exemption by completing Form 1023. Form 1023-EZ is designed for small business organizations. Ultimately the latter form is a simpler and more streamlined application.
Once you’ve completed the form, go ahead and file form with the Internal Revenue Service.
Once the application is received, it will be reviewed and either approved or declined.
In the event that it is approved, you will receive an IRS determination letter. The determination letter basically states that your nonprofit is an existing organization that is now also exempt under the Internal Revenue Code.
In the event the application for federal income tax exemption is declined, you will receive a letter of explanation, outlining exactly why the application was declined.
10. Apply for Wyoming state tax exemption
All Wyoming nonprofit organizations that receive their IRS determination letter are also automatically exempt from state income tax. So you won’t need to file to obtain an exemption from state income tax.
However, you’ll still need to file to obtain sales and use tax exemption. The application should be filed with the Wyoming Department of Revenue.
11. Other applicable permits and licenses
Obtaining a statewide business license is not a requirement in the state of Wyoming. However, your county or town may require the organization to have a permit. Therefore, it’s in your nonprofit’s best interest to check with your local licensing agency to determine if there are any licensing and permit requirements prior to operating your nonprofit in the state.
Additional state registration and reporting requirements
While most states require nonprofits to register for charitable solicitation prior to fundraising or accepting donations, Wyoming is not one of those states. Therefore, you don’t need to register with the state before accepting contributions from state residents.
12. Submit an annual report
All Wyoming nonprofits are required to file an annual report with the Wyoming Secretary of State. This must be done on the first day of the anniversary month of when you created your nonprofit.
Costs of starting a new nonprofit in Wyoming
The following filing fees are applicable to all Wyoming nonprofits:
- Filing the Articles of Incorporation: $25
- Applying for federal income tax exemption or 501(c): $275 or $600 IRS fee
After you’ve started your nonprofit, there are a few necessary steps that you should take to keep your organization running smoothly. Let’s take a closer look at them below:
Open a business bank account
- Maintain accounting and tax filing
- Ensure that your personal assets are kept separate from your nonprofits’ assets
To open a bank account, you will need to provide:
- Your EIN
- A copy of your articles of incorporation
- A copy of your organization’s bylaws.
Hire a business accountant
- Simplify payroll and bookkeeping
- Prevent your nonprofit from avoiding penalties and tax errors
- Manage your nonprofit’s funding
- Focus on growing your nonprofit
- Manage risks
You may opt for General liability, Personal liability, or Worker’s compensation insurance.
Build a website
As we mentioned earlier, you may want to create a website for your organization to legitimize your business or give it more credibility. A dedicated website is also one of the best ways to share your nonprofit’s vision, mission, and story with supporters. Consequently, it’s also a great way to announce upcoming events and goals.
Sign legal documents
One aspect that tends to get overlooked is signing legal documents in your personal capacity instead of as an authorized representative of your nonprofit.
If you’ve appointed yourself as a registered agent of the nonprofit, then the following tips will help avoid personal liability:
- State the registered name of your nonprofit
- Use your name and signature
- State your position/role in the organization as its authorized representative
When signing legal documents on behalf of the nonprofit, it is important that you do so in your capacity as the registered agent, as opposed to your capacity as an individual.
Example: Instead of signing your name only, state the name of the nonprofit and then your name and position within the organization before signing.
The primary difference between a for-profit and a nonprofit is that for-profits bring in money from private individuals or stakeholders. In return, a for-profit company must pay out dividends to its shareholders. This is because a return on investment is ultimately expected. On the other hand, a nonprofit organization seeks donations from foundations, individuals, corporations, and government organizations. The revenue generated or donated to the organization is cycled back into the company to further the nonprofit’s cause.
A public charity‘s primary objective is social well-being and philanthropy. Therefore, a public charity‘s main focus is for the greater good of humanity or the natural world. Churches, hospitals, medical research facilities, universities, and colleges are referred to as public charities or charitable organizations. Additionally, they receive donations from many sources and maintain active fundraising campaigns.
Yes, using social media for fundraising is a good idea. This is because fundraising via social media has multiple benefits. Not only do you get to keep existing donors engaged and in the know, but social media makes it easy for nonprofit organizations to share their latest campaigns and news with donors.
Starting a nonprofit organization allows you to use your education experience as well as business talent for the greater good of humanity. This purpose-driven experience yields intangible rewards that may offer more value than the tangible benefits of starting a nonprofit organization. Irrespective of whether you have a business plan or not, if you would like to start a nonprofit, go ahead and give it your best shot.
Nonprofit organizations that receive federal income tax exemption are held to a high standard by the government. This is because the nonprofit experiences various financial privileges due to their tax-exempt status. Therefore, in order to protect the public and ensure that nonprofits are not abusing their financial advantages, IRS requirements need to be adhered to. The IRS compliance guide contains all of the information necessary to keep your nonprofit compliant.