How to Start a Nonprofit in Utah

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:	Utah Department of Commerce - Division of Corporations and Commerical Code Name search
   Suffix:	The corporate name of a nonprofit corporation: (a) may, but need not contain: (i) the word "corporation," "incorporated," or "company"; or (ii) an abbreviation of "corporation," "incorporated," or "company".  Utah Code §16-6a-401

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.

   Utah director requirements:	Number: minimum 3 Qualifications: Natural person 18 years of age or older. No residency requirement. No membership requirement. Term: 1 year Quorum: majority Committee: minimum 2 directors
   Utah officer requirements:	Defined in bylaws or board resolution. One officer prepares minutes of the directors' and members' meetings, keeps required records, and authenticates records. Qualifications: Natural person 18 years of age or older. Need not be a director. Two or more offices may be held by the same individual.

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 Utah registered agent office is located in South Jordan, UT. 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:	Utah Department of Commerce - Division of Corporations and Commerical Code
   Form:	Articles of Incorporation
   Instructions:	Form SS-4418 - Instructions and Preparing Articles of Incorporation For a Nonprofit Corporation in Utah and Guide sheet: Information on Incorporating a Nonprofit Corporation
   Filing Method:	Mail, fax, in-person, or online
   Agency Fee:	$30
   Turnaround:	~14 business days by mail or fax. ~1 business day online.
   Law:	Utah Code - Title 16: Corporations - Chapter 6a: Utah Revised Nonprofit Corporation Act
   Notes:	A certificate of incorporation is issued upon approval.

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 Utah State Tax Identification Numbers/Accounts

    Utah offers a consolidated registration application for new business state tax registration.

    Submit to:	Utah State Tax Commission http://tax.utah.gov/
    Guidance:	Tax Information for Businesses in Utah
    Form:	Form TC-69: Utah State Business and Tax Registration
    Filing Method:	Mail or online at OneStop
    Fee:	$0

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.

    

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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:

    Agency:	Utah State Tax Commission
    Form:	TC-161: Registration for Exemption from Corporate Franchise or Income Tax
    Agency Fee:	$0

    To file to obtain Sales Tax Exemption:

    Agency:	Utah State Tax Commission
    Form:	Form TC-160: Application for Sales Tax Exemption Number for Religious or Charitable Institutions
    Agency Fee:	$0

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.

    Utah Charitable Organization Permit

    Agency:	Utah Department of Commerce - Division of Consumer Protection
    Law:	Utah Code Annotated §13-22-1 thorugh 13-22-15; Utah Administrative Code, Rule R152-22-1 through R152-22-5
    Foreign Qualification is Prerequisite:	No
    Registered Agent (Special Agency) Required?	Yes

    One-Time Exemption Registration

    More Details

    Exemption Eligible Organizations:	A religious, ecclesiastical, or denominational organization described in § 13-22-5(a) A solicitation by a broadcast media owned or operated by an educational institution or governmental entity, or any entity organized solely for the support of that broadcast media An individual soliciting a contribution for the relief or benefit of another individual, who is specified by name at the time of the solicitation if all contributions are turned over to the named beneficiary after deducting actual expenses necessary for the cost of solicitation, if any and all individuals that carry out any fund-raising function for the benefit of the named individual are unpaid, directly or indirectly, for services rendered A political party authorized to transact the political party's affairs within this state and any candidate and campaign worker of the political party if the content and manner of any solicitation make clear that the solicitation is for the benefit of the political party or candidate A political action committee or group soliciting funds relating to issues or candidates on the ballot if the committee or group is required to file financial information with a federal or state election commission A public school; a public institution of higher learning; a school accredited by an accreditation body recognized within the state or the United States; an institution of higher learning accredited by an accreditation body recognized within the state or the United States; an organization within, and authorized by, one of the previously described educational entities; a parent organization, teacher organization, or student organization authorized by one of the previously described educational entities A public or higher education foundation established under Title 53E, Public Education System -- State Administration, Title 53G, Public Education System -- Local Administration, or Title 53B, State System of Higher Education A television station, radio station, or newspaper of general circulation that donates air time or print space for no consideration as part of a cooperative solicitation effort on behalf of a charitable organization, whether or not that organization is required to register under this chapter A volunteer fire department, rescue squad, or local civil defense organization whose financial oversight is under the control of a local governmental entity Any governmental unit of any state or the United States Any corporation established by an act of the United States Congress and that is required by federal law to submit an annual report to the United States Secretary of Defense A solicitation by an applicant for a grant offered by a state agency if the terms of the grant provide that the state agency monitors a grant recipient to ensure that grant funds are used in accordance with the grant's purpose and the sum of the amount available to the applicant under grants offered by a state agency that the applicant applies for in a calendar year is less than or equal to $1,500 A chapter of a charitable organization or a person who solicits contributions for a charitable organization, if the charitable organization is registered with the division pursuant to § 13-22-5 or is exempt from registration under this section if certain conditions certain conditions are met A solicitation in an obituary A solicitation made exclusively to a family member of the individual making the solicitation
    Filing Method:	Online
    Agency Fee:	$0
    Law:	UT Code § 13-22-8
    Notes:	Exemptions do not expire as long as the organization continues to qualify under the exemption criteria.

    Initial Registration

    More Details

    Filing Method:	Online
    Agency Fee:	$75
    Turnaround:	1 week
    Notes:	You may not solicit until you receive your certificate of registration back from the state. It takes ~1 month for the state to process your application. Some Utah 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 Utah. 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 Utah. 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 Utah, obtain a certificate of good standing from your home state to submit during the foreign qualification process. The certificate cannot be more than 90 days old when filing foreign qualification documents.
    How to Apply:	Domestic Applicants: File entity formation documents with the Utah Department of Commerce - Division of Corporations and Commerical Code. Create an online account and complete the online charitable registration through the Utah Department of Commerce - Division of Consumer Protection. Foreign Applicants: Determine whether or not your charity will need to foreign qualify based on your activity in Utah. If not required, skip to number 3. File foreign qualification documents with the Utah Department of Commerce - Division of Corporations and Commerical Code. Create an online account and complete the online charitable registration through the Utah Department of Commerce - Division of Consumer Protection.
    Required Attachments:	IRS form 990 Articles of incorporation Bylaws IRS determination letter List of officers and directors Professional fundraising contracts

    Registration Renewal

    More Details

    Filing Method:	Online
    Agency Fee:	$75
    Due:	Annually by the upcoming quarterly due date based on registration date: January 1, April 1, July 1, or October 1. So if your permit was issued on April 15, it will expire on July 1.
    Due Date Extension:	Utah does not grant extensions for charitable organization registration.
    Penalties:	There is a late fee of $25 for each month that passes after the due date.
    Required Attachments:	IRS form 990 List of officers and directors Professional fundraising contracts Only if amended: IRS determination letter, articles of incorporation, and bylaws

    Contract Filing

    More Details

    Form:	There is no form. Just submit the contract to the state.
    Filing Method:	Email the contract to dcp-charities@utah.gov
    Agency Fee:	$0
    Turnaround:	1 business week.
    Due:	Every charitable organization which agrees to permit a charitable sales promotion to be conducted by a commercial co-venturer on its behalf shall file with the division a notice of the promotion prior to its commencement within this state.
    Notes:	There is no form. Notices of sales promotion must include: 1) The names of the charitable organization and commercial co-venturer; 2) That the charitable organization and the commercial co-venturer will conduct a charitable sales promotion; and 3) The date the charitable sales promotion is expected to commence.
    How to Apply:	The charity must be registered to solicit charitable contributions or otherwise exempt for the contract to be accepted.

    Change of Fiscal Year

    More Details

    Filing Method:	Online
    Agency Fee:	$75
    Notes:	Submit the short year financials during the standard renewal process.

    Cancellation

    More Details

    Agency Fee:	$0
    Notes:	To close out your registration, send (email accepted) a letter indicating that your organization wishes to cancel its registration. No final report or renewal is required.

    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.

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 Utah nonprofit compliance guide to learn more!

Continue reading "Utah Nonprofit Compliance"

Harbor Compliance® proudly partners with the Utah Nonprofits Association to provide insightful resources and compliance solutions to nonprofits in Utah.

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