How to Start a Nonprofit in New Jersey

1. Name Your Organization

   Your organization’s name establishes its brand and is also important for incorporating with the state. The legal name of your nonprofit corporation may not conflict with any other organization registered in the state. Make sure the name is available and meets state requirements.

   Name Search:	New Jersey Department of the Treasury Name search
   Suffix:	Shall contain one of the following: "a New Jersey nonprofit corporation," "incorporated," "corporation," "inc.," or "corp." unless it is a corporation which could organize pursuant to the provisions of Title 16 of the Revised Statutes.  New Jersey Statues 15A2:2

2. Recruit Incorporators and Initial Directors

   The incorporator is the person who signs the Articles of Incorporation for your nonprofit. You will need at least one, but can have more than one. Directors make up the governing body of your nonprofit corporation and are stakeholders in your organization’s purpose and success. You’ll want to identify three, unrelated individuals to meet IRS requirements. You will also want to be aware of any age or residency requirements.

   New Jersey director requirements:	Number: minimum 3 Qualifications: 18 years old. No citizenship requirement. No residency requirement. No membership requirement. Term: 1 year Quorum: majority Committee: minimum 1 member
   New Jersey officer requirements:	A president, a secretary, and a treasurer are required. Two or more offices may be held by the same individual. This person may sign instruments in only one capacity when the signatures of two officers are required.

3. Appoint a Registered Agent

   A registered agent is responsible for receiving legal notices on behalf of your organization. The appointed registered agent must be physically located in the state and maintain an office that is open during regular business hours. As a nationwide registered agent, our service is designed to receive your legal documents and provide secure access to those documents through your online account. Our local New Jersey registered agent office is located in Marlton, NJ. We offer registered agent service independently or as part of our nonprofit formation packages.

4. Prepare and File Articles of Incorporation

   Your nonprofit’s articles of incorporation officially mark the creation of your organization. They document where and when the organization was formed and capture other information necessary to verify its existence. While requirements for language vary from state-to-state, there are some basic provisions that the IRS will look for when you apply for 501(c)(3) exemption. It is important to customize the articles for your organization and make sure you meet the state and IRS requirements. Meeting these requirements from the start will help avoid having to make amendments later or risk getting your 501(c)(3) application rejected. Some states will also require you to publish your articles of incorporation, so be mindful of any deadlines and publishing instructions.

   Agency:	New Jersey Department of the Treasury
   Filing Method:	Online
   Agency Fee:	$75 registration fee + $3.50 online filing fee.
   Law:	New Jersey Statutes - Title 15A: Corporations, Nonprofit

5. File Initial Report

   After filing articles of incorporation, you must file an initial report.

   Not required

   
   
   

6. Obtain an Employer Identification Number (EIN)

   This unique, nine-digit number is assigned by the IRS to identify your nonprofit. All types of nonprofits will apply for an EIN, not only those that hire employees. You will use your EIN to open a bank account, apply for 501(c)(3) status, and submit 990 returns to the IRS.

   Agency:	Internal Revenue Service (IRS)
   Form:	IRS Form SS-4
   Filing Method:	Mail, phone, fax, or online.
   IRS fee:	$0
   Turnaround:	Immediately online or by phone. 4 business days by fax. 4-5 weeks by mail.
   Notes:	The IRS website is only available during certain hours. Print your EIN before closing your session. For additional guidance, see IRS Pub 1635: Understanding Your EIN.

7. Store Nonprofit Records

   As you launch your nonprofit, you will receive a number of official documents. Organizing these documents in one place will save you headaches down the road. You will soon have numerous items to keep in your records including your EIN letter, bylaws, meeting minutes, 501(c)(3) determination letter, and more.

   
   
   

   A great way to maintain necessary documentation is Records Manager, our software for storing records securely, tracking directors and officers, and getting notified of meetings.

8. Establish Initial Governing Documents and Policies

   Your bylaws are the governing document for your nonprofit. They serve as your organization’s operating manual and should be consistent with your articles of incorporation and the law. When your Board of Directors meets for the first time, you’ll review and ratify the bylaws and they will be a roadmap for governance from there.

   At the same time, you’ll also want to create and adopt a conflict of interest policy. A conflict of interest is when someone in a key position in your nonprofit has competing interests and is making choices that could benefit themselves to the harm of the organization. Personal interests should be set aside and organizational interests prioritized. If a conflict of interest does arise, it should be disclosed immediately.

   Your application to the IRS for 501(c)(3) exemption will require that both the bylaws and the conflict of interest policy are approved and adopted. Once they’ve been adopted, safely store them in your Nonprofit Records Kit.

9. Hold Organizational Meeting of the Board of Directors

   The initial organizational meeting of your Board of Directors will be incredibly productive. At this meeting you will approve the bylaws, adopt the conflict of interest policy, elect directors, appoint officers, and approve resolutions such as opening the organization’s bank account. Important decisions are being made so be sure to record them in the meeting minutes.

10. Get New Jersey State Tax Identification Numbers/Accounts

    This filing registers your nonprofit for applicable taxes.

    Submit to:	State of New Jersey - Department of the Treasury http://www.state.nj.us/treasury/index.shtml
    Form:	Form NJ-REG: Business Registration Form
    Guidance:	Bulletin MISC-3: Tax Treatment of Nonprofit Organizations and Government Entities
    Fee:	$0
    Filing Method:	Mail or online
    Notes:	Submit within 60 days of filing business entity. Nonprofits planning to contract with any public agency in New Jersey, including state agencies, local governments, colleges/universities and local school boards as well as with casino licensees should obtain a Business Registration Certificate as proof of registration during this filing.

11. Apply for 501(c)

    Applying for 501(c) tax exemption can feel like the most daunting step in bringing your nonprofit dream into reality, but obtaining tax exemption comes with many benefits. You will be able to apply for grants and grow your fundraising success in addition to being exempt from IRS income tax. 501(c) is the chapter of the Internal Revenue Code that regulates nonprofit organizations. Like others, you may be most familiar with 501(c)(3) nonprofits, including charities and foundations. 501(c)(3) nonprofits apply using Form 1023 or Form 1023-EZ. Review the criteria for each application and make sure you meet the eligibility requirements set out by the IRS. Other types of nonprofits, including 501(c)(4)s and 501(c)(6)s, apply using Form 1024. After reviewing and approving your application, the IRS will return a Determination Letter officially recognizing your exemption.

    Completing the federal application for tax exemption is significantly easier with the assistance and support of a professional. Find someone with the expertise to ensure the correct application is being used and is completed accurately. A well-prepared application takes time, over 100 hours by IRS estimates, so put yourself on the path to success by finding a specialist to walk alongside you in the journey - from start to tax-exempt finish!

    Agency:	Internal Revenue Service (IRS)
    Form:	IRS Form 1023, IRS Form 1023-EZ, or IRS Form 1024
    Instructions:	IRS Instructions for Form 1023, IRS Instructions for Form 1023-EZ, or IRS Instructions for Form 1024.  Also see guidance IRS Pub 557: Tax-Exempt Status for Your Organization.
    Filing Method:	Mail
    Agency Fee:	$275 for organizations filing Form 1023-EZ and $600 for organizations filing Form 1023.
    Turnaround:	1023-EZ average: <1 month. 1023 average: 3-6 months.

    

    Tax-Exempt in 2 Weeks!

    Download the case study of how our client, Reform It Now, obtained 501(c)(3) tax exemption in only two weeks using the new IRS Form 1023-EZ!

    From filing the 1023EZ on August 1st to receipt of the determination letter on August 14th is, in my humble opinion, simply breathtaking and I dare say, ONLY Harbor Compliance could have achieved that.

    

    Dr. Bob A.Reform It Now, Inc.

12. Apply for State Tax Exemption(s)

    With your IRS Determination Letter in hand, make sure you familiarize yourself with your state’s requirements for recognizing your nonprofit’s tax-exempt status. This is an area where requirements vary state-by-state. Many states issue their own tax-exempt certificate that can be used for sales and use tax purposes, but it may require application and periodic renewal.

    To file to obtain exemption from state income tax:

    Not required

    
    
    

    If a nonprofit organization is incorporated and operating as a nonprofit corporation, it is exempt from the New Jersey Corporation Business Tax. You may request a letter from the Division of Taxation confirming exemption from corporation business tax.

    More information: New Jersey Department of the Treasury

    To file to obtain Sales Tax Exemption:

    Agency:	New Jersey Department of the Treasury - Division of Taxation
    Form:	Form REG-1E: Application for Exempt Organization Certificate
    Agency Fee:	$0

    See Bulletin MISC-5: Tax Treatment of Nonprofit Organizations and Governmment entities for more information on NJ tax exemptions, including:

    • Local Property Tax
    • Motor Fuel Tax

13. Register for Charitable Solicitation (Fundraising)

    This is another area where laws differ from state to state, but most states require any nonprofit soliciting donations to register to do so on an annual basis. This means registering in the state prior to soliciting any resident of that state. Registering in your home state is essential, but you may also need to register other states depending on the scope of your organization.

    New Jersey Charitable Organization Registration

    Agency:	New Jersey Division of Consumer Affairs - Charities Registration Section
    Law:	New Jersey Statutes Ann. § 45:17A-18 et seq.
    Foreign Qualification is Prerequisite:	No
    Registered Agent (Special Agency) Required?	No

    One-Time Exemption Registration

    More Details

    Exemption Eligible Organizations:	Any religious corporation, trust, foundation, association or organization incorporated under the provisions of Title 15 or 16 of the Revised Statutes or Title 15A of the New Jersey Statutes or established for religious purposes Any agency or organization incorporated or established for charitable purposes and engaged in effectuating one or more charitable purposes, which is affiliated with, operated by or supervised or controlled by a corporation, trust, foundation, association, or organization incorporated or established for religious purposes, or any other religious agency or organization Any educational institution, the curricula of which in whole or in part are registered or approved by the Department of Education or the New Jersey Commission on Higher Education, either directly or by acceptance of accreditation by an accrediting body recognized by these agencies An educational institution confining its solicitation to its student body, alumni, faculty and trustees, and their families A library registered by the Department of Education, provided that the annual financial report of that library shall be filed with the Department of Education, where it shall be open for public inspection A local unit registered by a parent organization in accordance with N.J.A.C. 13:48-6 A charitable organization engaged in charitable fund raising that did not receive gross contributions in excess of $10,000 during its most recent fiscal year, if all of its functions, including fund raising activities, are carried on by persons who are not compensated for soliciting contributions
    Law:	NJ Admin Code 13:48-3.3
    Notes:	To claim an exemption, submit a letter explaining why your organization is eligible for exemption.

    Initial Registration

    More Details

    Filing Method:	Online
    Agency Fee:	$30-$250, depending on gross contributions.
    Turnaround:	6-8 months
    Notes:	The CFO and another authorized officer must sign. Signatured need not be notarized. Some New Jersey counties and municipalities may require charities that solicit in-person to register prior to fundraising.
    Before you Apply:	Domestic Applicants: Check the available exemptions to see if your charity is eligible for exemption from the full registration requirement. If your charity meets the audit threshold, obtain an audited financial report to submit with your registration application. Look through the list of required attachments and make sure that you have each required document in hand before starting the registration application. Foreign Applicants: Check the available exemptions to see if your charity is eligible for exemption from the full registration requirement. If your charity meets the audit threshold, obtain an audited financial report to submit with your registration application. Look through the list of required attachments and make sure that you have each required document in hand before starting the registration application. If you will foreign qualify in New Jersey, obtain a certificate of good standing from your home state to submit during the foreign qualification process. The certificate cannot be more than 30 days old when filing foreign qualification documents.
    How to Apply:	Domestic Applicants: Form an entity by completing the online form on the Division of Revenue and Enterprise Services website. Create a My New Jersey account online and complete the charity registration application through the New Jersey Division of Consumer Affairs - Charities Registration Section. Foreign Applicants: Determine whether or not your charity will need to foreign qualify based on your activity in New Jersey. If not required, skip to number 3. Foreign qualify by completing the online form on the Division of Revenue and Enterprise Services website. Create a My New Jersey account online and complete the charity registration application through the New Jersey Division of Consumer Affairs - Charities Registration Section.
    Required Attachments:	IRS Form 990 Audited financials (if applicable) Articles of incorporation Either IRS determination letter or IRS form 1023 Bylaws List of officers and directors

    Registration Renewal

    More Details

    Filing Method:	Online
    Agency Fee:	$30-$250, depending on gross contributions.
    Due:	Annually within 6 months after the close of your fiscal year. So if your fiscal year ends December 31, renewal is due by June 30. There is no official start to the renewal period, so renewals may be submitted as soon as financials become available for the most recently completed fiscal year.
    Due Date Extension:	Due dates can be extended for 6 months beyond the original due date by submitting a request for extension through the online portal along with the expected renewal fee.
    Penalties:	There is a $25 late fee for renewals filed after the due date.
    Notes:	Note the list of attachments required. Large organizations may need to provide audited financial statements.
    Required Attachments:	IRS form 990 Audited financials (if applicable) List of officers and directors Only if amended: IRS determination letter, articles of incorporation, and bylaws

    Contract Filing

    More Details

    Form:	There is no form, simply submit a cover letter and a copy of the charitable sales agreement with the required fee.
    Filing Method:	Mail
    Agency Fee:	$30
    Due:	Every charitable organization which permits a charitable sales promotion to be conducted on its behalf, shall obtain a written contract from the commercial co-venturer and shall file a copy of the agreement with the Division of Consumer Affairs Charities Registration Section at least 10 days prior to the initiation of that charitable sales promotion.
    Notes:	The charitable sales promotion contract must include, but is not limited to, the following information: A description of the charitable sales promotion, solicitation, or venture undertaken, and dates to be commenced and terminated; The name and address of the charitable organization and of the commercial co-venturer; The dollar amount or percent per unit of goods or services purchased or used that will benefit the charitable organization or purpose. If the actual dollar amount or percent cannot reasonably be determined prior to the final date of the charitable sales promotion, the commercial co-venturer shall disclose an estimated dollar amount or percent. Any such estimate shall be reasonable and shall be based upon all of the relevant facts known to the commercial co-venturer and the charitable organization regarding the charitable sales promotion; A requirement that the commercial co-venturer provide the charitable organization with the gross amount of income received by the commercial co-venturer attributable to the charitable sales promotion, solicitation or venture undertaken; and A provision clearly and conspicuously stating that the parties are subject to the Act and the rules of this chapter.
    How to Apply:	The charity must be registered to solicit charitable contributions or otherwise exempt for the contract to be accepted.

    Financial Reporting

    More Details

    Form:	Form CCO-500
    Filing Method:	Mail
    Agency Fee:	$10
    Due:	Charities must file a promotion report within 40 days of the expiration of every commercial co-venture charitable sales promotion. For campaign contracts lasting more than 12 months, a charitable organization shall file an interim report within 40 days of the end of each of the charitable organization’s fiscal years. The charitable organization may file the final report within 40 days after the expiration of the contract or service agreement or at the end of the last fiscal year of the contract.

    Change of Fiscal Year

    More Details

    Filing Method:	Online
    Notes:	Use the DCA portal and start a renewal registration. You can enter the new fiscal year end month and renew for that year.

    Cancellation

    More Details

    Agency Fee:	$0
    Notes:	To close out your registration, submit a letter asking to cancel the registration and that the registration number be "retired".

    To fundraise nationally or online, please see our Fundraising Compliance Guide. Our services manage your initial, renewal, and exemption filings in every state.

14. Obtain Other Business Licenses & Permits

    Running your nonprofit corporation legally also means securing all applicable licenses and permits. The range of local, state, and federal requirements is wide. Access resources like the Small Business Administration Business License & Permit look-up tool and search by your business type and locality.

    Nonprofits who wish to conduct bingo, raffles, and other regulated charitable games must obtain licenses.
    
    First, your organization must apply for eligibility:

    Submit to:	State of New Jersey - Division of Consumer Affairs - Legalized Games of Chance Control Commission http://www.njconsumeraffairs.gov/lgccc/Pages/default.aspx
    Form:	Initial Affidavit and Application for Biennial Registration
    Fee:	$100
    See also:	IRS Pub 3079: Tax-Exempt Organizations and Gaming

    Next, your organization must apply for the specific licenses desired:

    Submit to:	State of New Jersey - Division of Consumer Affairs - Legalized Games of Chance Control Commission http://www.njconsumeraffairs.gov/lgccc/Pages/default.aspx
    Form:	Applications page
    Fee:	Varies based on game

You’ve made it! You turned your passion into a legitimate nonprofit corporation exempt under IRS 501(c) and are benefiting your community. That solid foundation on which you built your organization requires ongoing maintenance. Investing in maintaining compliance with all of the government agencies is an ongoing responsibility and commitment needed to ensure your vision continues long into the future. Check out our compliance guide to learn more!

Once you have registered your nonprofit per the steps listed above, you will need to maintain compliance with all of the government agencies. Staying current with the IRS and state requirements is an ongoing responsibility. Continue reading our New Jersey nonprofit compliance guide to learn more!

Continue reading "New Jersey Nonprofit Compliance"

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