Forming a nonprofit corporation is a noble goal. But if you’re just starting out, the process can feel incredibly confusing. Compared to other entity types like LLCs or even standard corporations, a nonprofit has detailed start-up requirements and complicated maintenance procedures.
In this guide, we’ll walk you through the ins and outs of forming a nonprofit in Florida so you can get back to what truly matters: your cause.
What is a Nonprofit Corporation?
A nonprofit and for-profit corporation both have similar “nuts and bolts,” so to speak. Both businesses have a board of directors, CEOs, bylaws, annual board meetings, and the like.
But what makes a nonprofit stand out is its purpose. A business corporation typically organizes for financial gain; a nonprofit exists not to make money but to further a cause or reach a goal. Additionally, a business corporation gains investors by offering stock, which has the incentive of dividends and financial gain. Nonprofit corporations solicit contributions that don’t generate any income for those investors.
Well-known nonprofits include groups like Doctors Without Borders, Alcoholics Anonymous, and even your local YMCA.
It’s important not to confuse “nonprofit” with “no income.” Most nonprofits generate income from donations or day-to-day services. The distinction is that nonprofits use 100% of their income to pay expenses and reinvest in their cause. For example, the YMCA uses member dues and community donations for exercise programs, youth sport development, and maintaining their equipment and facilities. They also pay their employees.
Because of this, nonprofit corporations may apply for and receive a tax-exempt status (typically a 501(c)(3) designation), eliminating the corporation’s responsibility for income taxes at the federal and state levels.
Should you form one?
Before you dive into the rest of this guide, you should do a little soul-searching: should you even form a nonprofit in Florida? The goal is a noble one, but it certainly isn’t for everyone. And some concepts simply aren’t right for the nonprofit sector.
- Here are some questions to ask:
- Will I be able to convince others to buy into this cause? How hard will it be to attract donors?
- Are there other existing nonprofits with the same goal?
- If so, do they operate in Florida? Nationwide? Should I form a local chapter of their nonprofit instead?
- Can I further this cause better or differently than they are?
- Can I hire employees for this cause, or will I rely on volunteers? How will I successfully recruit their help?
If you find yourself stumped by any of those questions, you may want to step back and get some help…or simply do some more thinking before diving in. But if you have answers to most of those questions, then you’re well on your way to starting a Florida nonprofit organization.
Starting a Florida Nonprofit: Step by Step
Technically, the process for creating a Florida nonprofit entity is pretty simple. It’s really just a matter of picking a few people and filing some paperwork (it’s the requirements immediately after forming the nonprofit that get complicated).
1. Pick & Claim a Name
Choosing a name is one of the most crucial decisions for starting your business. You want to pick a name that’s memorable, likable, and most importantly, compliant with Florida state law.
Florida has pretty simple laws for nonprofit names:
- Your name must include the words “incorporated” or “corporation” or their abbreviations
- Your name may not use the word “Company” or the abbreviation “Co.”
- Your name must not imply that you are conducting activities that are against state law or against the purpose stated in your Articles of Incorporation
- Your name cannot imply affiliation with federal or state government
- Your name must be “distinguishable from the names of all other entities,” or completely distinct from other business names in use in Florida
If you want information on Florida nonprofit names, check out the Corporate Name Section of the Corporations Not for Profit Chapter of the Florida Statutes.
As a result, you have a lot of leeway to pick a name that will resonate with your target audience, potential donors, and of course, with you. The ideal Florida nonprofit name describes what the organization does, sounds good when said out loud, and just “sticks” in the minds of people who see it.
Whenever you pick a potential name, you should check whether it’s available with an Entity Name Search. Typically, if no exact matches show up, your name is available to use. This seems like a very basic step, but it’s crucial to streamlining your filings.
Once you nail down an available name that you like, you can reserve it. In Florida, there isn’t an official form to file to do this; instead, you’ll write a letter to the Division of Corporations. In it, you’ll list the name you’d like to use and include a $25 check for the reservation. Completing this optional step protects your chosen name for your exclusive use for 120 days. That gives you plenty of time to prepare other business documents without losing your name to another business or nonprofit.
You can learn more through our guide on how to reserve a Florida business name.
2. Assemble your initial board
A nonprofit corporation is only as impactful as the people leading it. That’s why your initial board of directors is extremely important; you’ll want to pick a team of people that are just as passionate about your cause as you are.
More importantly, it’s helpful to choose a group with complementary strengths. For example, a medical outreach group might have a board of directors with three doctors, a nurse, a financial expert, a creative visionary, and a lawyer. The right board of directors will help your nonprofit thrive.
Florida doesn’t have a ton of specific rules about who can serve on the board. At the most basic level, your board members must be 18 years or older, but they don’t have to be Florida residents. Next, you must have at least 3 directors on your board at all times. As long as you meet those basic requirements, your bylaws can dictate all of the other requirements for your board. You can choose how each director will be appointed, how long they’ll serve, how they’ll resign, and how you’ll replace them.
3. Appoint a registered agent
Every Florida entity—nonprofits, corporations, and LLCs alike—must appoint a registered agent. This individual accepts “service of process” from the state on your behalf. Basically, if the state ever needs to notify you regarding a lawsuit or an upcoming annual report due date, they’ll contact your registered agent. The agent forwards that notice to you.
Florida has pretty lenient criteria for a nonprofit’s registered agent, as found in the Florida Business Corporation Act:
- Every entity that transacts business in the state (both domestic and foreign) must appoint a registered agent
- The agent must be an individual resident of Florida OR a business with authority to act in the state
- The agent must accept (in writing) the appointment
- An agent must be continuously maintained
So you might ask, “Can I serve as my nonprofit’s registered agent?” Technically, you can. But we don’t recommend it. That puts your personal details (and often private details like your address and primary email) on the public record. You’ll also be busy running your nonprofit and pursuing your goals; you won’t want to tie yourself down to a registered address (especially for a tedious thing like service of process). We recommend consulting an individual you trust.
Or, if you prefer, you can hire a registered agent service instead. For a small annual fee, these services will act as your agent. That frees you up to focus on running your nonprofit.
4. File your Articles of Incorporation
Up until now, your nonprofit has just been an idea; it’s not recognized by the state government. Technically, businesses don’t “exist” until they file the appropriate paperwork. For Florida nonprofits, that means filing the Articles of Incorporation.
This two-page document (plus a one-page cover letter) requires some foundational information about your nonprofit. Here’s the data you’ll need to have on hand:
- Your nonprofit’s name
- The principal office address of the nonprofit (and the mailing address, if applicable)
- The stated purpose of your corporation (some include the IRS’s recommended language for tax exemption here, but it’s not required)
- How your directors will be elected and appointed
- Name and address of each director/officer
- Name and address of your registered agent
- Name and address of the incorporator
- Effective date for the filing
- Signature of registered agent, designating consent to the appointment
- Signature of incorporator
All told, this form is pretty simple. And if you’ve made it this far, you probably already have all of this information on hand. Just be sure to fill in the required signatures and cover letter, and you should be set to go.
If you prefer, you can file this form online with SunBiz instead. No matter how you file, you’ll need to pay the $70 filing fee ($35 for the Articles and $35 for your registered agent resignation).
Processing speed: 2-5 business days
Expedited processing: in-person drop-off (Tallahassee) only, with a $100 convenience fee
Congratulations! Your nonprofit is now a recognized entity in Florida!
Prepare for & Hold Your First Board Meeting
After your Articles of Incorporation form is complete, it’s time to truly get your nonprofit’s activities underway. And that means it’s time for the first board meeting.
No two board meetings will look exactly the same; after all, every nonprofit has different tasks to accomplish. Florida law doesn’t have a bunch of specific requirements, either. But they do expect you to maintain regular meetings and meet a one-third minimum for quorum (necessary for voting on initiatives). Other than that, you can allow your bylaws to dictate how your meetings will flow.
For example, you might have your president and CFO report on the recent accomplishments and the financial standing of the nonprofit. For more information on the legal requirements for these meetings, please consult the Directors and Meetings Sections of the Florida Statutes.
Your very first board meeting, however, will look a bit different. Here’s what you’ll need to accomplish:
- Draft and approve the nonprofit’s bylaws: The bylaws dictate exactly how your nonprofit will be run. This includes a detailed rundown of your corporate purpose, how your board will be selected and replaced, how you’ll raise funds, how you’ll hire employees or solicit volunteers, and much more (including a provision for how to amend the bylaws). To save time, you may choose to write a draft before the meeting and revise it when your full board is present. The important thing is that the board approves the final bylaws, making them the governing document for your nonprofit.
- Draft and approve a conflict of interest policy: Occasionally, one of your nonprofit’s contributors will have personal affairs that intersect with the activities of your nonprofit. A conflict of interest policy dictates exactly what happens in those situations, protecting both the nonprofit and the individual contributor.
- Appoint someone to take minutes at each meeting: Every Florida nonprofit corporation must establish and maintain a corporate record. That’s why every board should appoint someone to take minutes, or a summary of every board meeting, documenting what was said and what decisions were made.
- Finalize responsibilities for each board member: If one board member will be responsible for fundraising while another raises awareness for the cause, you should assign those roles at the initial board meeting.
- Appoint officers for the nonprofit (if needed): Some corporations choose to have their officers, such as the CEO or CFO, be members of the board. Others appoint non-board members to fill these roles, creating a division between the governance and day-to-day operations. Either choice is fine, but these vital roles should be filled.
This initial meeting will be a very full, technical day (or even series of days!), but nailing down these aspects will help you establish a nonprofit that’s compliant with Florida state law and efficiently run.
Take Care of Taxes
Taxes as a nonprofit are a tricky beast; frankly, we recommend getting advice from a tax lawyer, accountant, or similar consultant to make sure you cover all your bases! But let’s take a quick look at the basics for nonprofit taxes.
First, apply for tax-exempt status on the federal level
If you don’t file for tax-exempt status, you’ll technically be liable for corporate income taxes. And that’s the last thing a non-profit wants. That’s why you’ll need to start out by filing Form 1023 or Form 1024, which are the applications for charitable, religious, or educational groups and other nonprofits respectively. After that application is completed, you’ll play the waiting game. The IRS can take up to 180 days to approve or reject your application, so we highly recommend completing the application correctly the first time.
Once your application is approved, you’ll receive a letter of tax-exempt status from the IRS. That helps you get exemption from the state’s corporate income tax, too, but if you want exemption from sales taxes, you’ll have another step to complete: a Certificate of Exemption application. For more information on how to obtain the exemption and how to arrange it with vendors, consult the Florida Department of Revenue.
Obtain an EIN
An EIN, or an Employer Identification Number, is an important identifier to get; it acts a bit like a Social Security Number, but for a business entity. Unfortunately, you aren’t assigned one automatically.
Thankfully, it’s free to apply for an EIN online with the IRS. Even if you don’t plan to have employees right away, it’s a good idea to have this number from the get-go. Miscellaneous forms, such as license applications or even bank accounts, may request this number.
Account for employment & miscellaneous taxes
No two businesses are alike, so each nonprofit will have slightly different taxes. That said, Nonprofits with employees will need to account for withholding taxes on the federal level, unemployment insurance taxes on the federal and state levels (it’s called the reemployment tax in Florida), and more.
There are also miscellaneous industry-specific taxes in Florida, such as fees for fuel, child care, and other areas. For more information on these taxes, check out the Florida Department of Revenue.
That’s the basic gist of nonprofit taxes in Florida. We still recommend consulting with a tax professional, as they’ll be able to give you specialized advice for your unique situation.
Register for Licenses and Permits
Licenses and permits are especially important for nonprofits. And there are three major categories of potential permits and licenses: fundraising, lobbying, and licensing. Let’s walk through Florida’s requirements for each of those three areas.
1. Fundraising
A lot of states require you to register in order to solicit charitable contributions, and Florida is no exception. Every nonprofit that wants to fundraise for its cause must register with the Florida Department of Agriculture and Consumer Services. If your nonprofit has less than $25,000 in revenue (contributions included) you can fill out the Small Charitable Organizations/Sponsors Application instead. The fees for this registration vary depending on how much money your organization makes in a given year. And you’ll need to renew it every year, too.
2. Lobbying
If your nonprofit will be lobbying for its cause in a formal capacity, then you’ll need to ensure that each person lobbying has the appropriate registration with the Lobbyist Registration Office. This registration requirement applies for any lobbyist receiving any financial compensation. Florida charges $50 for the first registration and $20 for each subsequent registration.
Lobbyists are also required to make regular reports of their finances when lobbying. For more information on these requirements, check out the FAQs for Lobbyists page by the Florida Legislature.
3. General licensing
Nonprofits are tax-exempt, but they aren’t exempt from licensure requirements, whether that’s for an industry-specific license or a state general business license. So you’ll need to get the licenses that apply to your unique organization.
Florida, unlike some states, doesn’t have a general business license that every entity in the state needs to obtain. So most license requirements come at the industry level instead. Florida upholds all federally regulated industry licenses, and the Get a Business License page by te Department of State is a great place to check out the state-level requirements. It’s up to you to learn if there are any licenses for your industry, so be sure to complete this step!
Whenever you apply for a license or permit, we recommend inquiring about the requirements for renewing your licenses. That way, you’ll know exactly how often you’ll need to renew your licenses (if applicable).
Meet Insurance Requirements
We highly recommend that every business entity maintain at least some sort of general liability policy — even nonprofit entities. There’s always a chance that something can go wrong (no matter how careful you are).
A natural disaster can happen, a break-in might cost you some important equipment, or an accident during day-to-day operations might cause a broken bone and damaged property. A general liability policy will protect your business if something like that happens.
Florida state law also requires you to get a workers’ compensation insurance policy if you have 4 or more employees (and that count includes you and other managers, too). You can learn more about this requirement with the Division of Workers’ Compensation.
Top Resources for Florida Nonprofits
Nonprofit work isn’t always easy, but you never have to go it alone! There are dozens, if not hundreds of nonprofit resources available to Florida organizations.
On the national level, there’s the National Council of Nonprofits. They exist to advocate for and strengthen nonprofits throughout the country by providing nearly comprehensive resources, teaming up with each state’s nonprofit network, and keeping you aware of the trends in policy and public opinion. It’s also a great place to peruse the latest reports and data about charitable giving and advocacy in the U.S.
On the state level, you can always turn to the Florida Nonprofit Alliance. In their own words, the Alliance “informs, promotes, and strengthens the nonprofit sector in order to create more vibrant communities across the state.” The Alliance does require membership, but joining grants you several advantages, including access to research, publications, resources, and more, so joining will be worth your while.