How to Start a Nonprofit in North Dakota

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:	North Dakota Secretary of State Name search
   Suffix:	Need not contain the word "company", "corporation", "incorporated", "limited", or an abbreviation of one or more of these words; Must be expressed in letters or characters used in the English language as those letters or characters appear in the American standard code for information interchange (ASCII) table.  N.D.C.C. 10-33-10

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.

   North Dakota director requirements:	Number: minimum 3 Qualifications: Individuals. No residency requirement. No membership requirement. Term: default is 1 year, 10 year maximum for fixed members Quorum: majority Committee: minimum 1 person who need not be a member or director, except the litigation committee which must contain a minimum of 1 independent directors or other independent persons.
   North Dakota officer requirements:	A president and secretary are required. Qualifications: 18 years of age or older

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 North Dakota registered agent office is located in Fargo, ND. 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:	North Dakota Secretary of State
   Form:	North Dakota Nonprofit Corporation Articles of Incorporation (SFN 13003)
   Instructions:	How to Begin and Maintain a Nonprofit Corporation in the State of North Dakota
   Filing Method:	Mail, fax or online.
   Agency Fee:	$40
   Turnaround:	~30 days. No expedite options available.
   Law:	North Dakota Century Code §10-33
   Original Ink:	Not required
   Notarize:	Not required

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 North Dakota State Tax Identification Numbers/Accounts

    In North Dakota, a general business registration is not required. Simply register for applicable state taxes.

    More information:

    North Dakota Office of State Tax Commissioner http://www.nd.gov/tax/ Use left-hand navigation to explore ND state taxes that might apply to your nonprofit.

    If your organization will sell goods that require collection of sales tax, you must obtain a sales tax license.

    Submit to:	North Dakota Office of State Tax Commissioner http://www.nd.gov/tax/
    Form:	Application to Register for Income Tax Withholding and Sales and Use Tax Permit
    Fee:	$0
    Filing Method:	Mail

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

    
    
    

    Upon obtaining your IRS Determination Letter, your organization is automatically exempt from North Dakota corporate income tax. No application or notification is necessary.

    More information: North Dakota Office of State Tax Commissioner

    To file to obtain exemption from state sales tax:

    Not required

    
    
    

    Most North Dakota nonprofits are not able to become exempt from sales tax. Certain organizations, such as hospitals and schools are automatically exempt.

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.

    North Dakota Charitable Organization Registration

    Agency:	North Dakota Secretary of State
    Law:	North Dakota Century Code, Ch. 50-22
    Foreign Qualification is Prerequisite:	Yes
    Registered Agent (Special Agency) Required?	No

    One-Time Exemption Registration

    More Details

    Exemption Eligible Organizations:

    An organization that solicits funds for an institution of higher learning A private or public elementary or secondary school An organization that uses only volunteer unpaid fundraisers and that solicits funds for a political subdivision or other government entity or for a civic or community project in which the contributions received are used solely for the project and none of the contributions inure to the benefit of any individual A charitable organization or person that solicits contributions for any person specified by name at the time of the solicitation if all the contributions received are transferred within a reasonable time after receipt to the person named or that person's parent, guardian, or conservator with no restriction on their expenditure and with no deduction A religious society or organization that is exempt from filing a federal annual information return pursuant to Internal Revenue Code section 6033(a)(2)(A) (i) and (iii) [26 U.S.C. 6033(a)(2)(A)(i) and (iii)] or Internal Revenue Code section 6033(a)(2)(C)(i) [26 U.S.C. 6033(a)(2)(C)(i)]

    Law:

    NDCC § 50-22-01

    Initial Registration

    More Details

    Filing Method:	Online
    Agency Fee:	$25. Out-of-state nonprofits will also incur fees to qualify and appoint a registered agent.
    Turnaround:	4-6 weeks
    Notes:	One officer must sign and it must be notarized. Some North Dakota 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. Appoint a registered agent to receive legal documents in North Dakota. 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. Appoint a registered agent to receive legal documents in North Dakota. Obtain a certificate of good standing from your home state (to be filed during the foreign qualification process). The certificate cannot be more than 6 months old when filing foreign qualification documents. Look through the list of required attachments and make sure that you have each required document in hand before starting the registration application.
    How to Apply:	Domestic Applicants: Create a FirstStop online account and file entity formation documents through the North Dakota Secretary of State. After entity approval, file a charitable organization registration using FirstStop. Foreign Applicants: Create a FirstStop online account and file foreign qualification documents through the North Dakota Secretary of State. After entity approval, file a charitable organization registration using FirstStop.
    Required Attachments:	IRS form 990 IRS determination letter List of officers and directors Professional fundraising contracts A list of officer and director compensation

    Registration Renewal

    More Details

    Filing Method:	Online
    Agency Fee:	$10
    Due:	Annually by September 1. If you initially apply in July or August, you get a waiver until the following September.
    Due Date Extension:	Due dates can be extended for 90 days beyond the original due date by submitting an amendment through the online portal.
    Required Attachments:	List of officers and directors A list of officer and director compensation

    Change of Fiscal Year

    More Details

    Filing Method:	Online
    Agency Fee:	$10
    Notes:	Changes to the fiscal year of a charity can be reported through the online portal.

    Cancellation

    More Details

    Notes:

    To close out your registration, either file a final report with “Final” across the top of front page and submit it with a $10 filing fee (if you haven’t filed the charity annual report for this year yet) or simply send an e-mail requesting the cancellation (if you have already filed a report for this year).

    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 charitable games must obtain a license.

    Submit to:	North Dakota Attorney General https://attorneygeneral.nd.gov
    Form/Fee/Filing:	Varies based on game. Please see Attorney General website.
    Law:	Rules and regulations
    See also:	IRS Pub 3079: Tax-Exempt Organizations and Gaming

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 North Dakota nonprofit compliance guide to learn more!

Continue reading "North Dakota Nonprofit Compliance"

Harbor Compliance® proudly partners with the North Dakota Association of Nonprofit Organizations to provide insightful resources and compliance solutions to nonprofits in North Dakota.

Welcome to Our Community

We're committed to publishing free informational resources such as this how-to guide. Our resources have been shared by important industry organizations including: