If a person is interested in forming a nonprofit corporation, there are certain requirements that he or she should be aware of. A nonprofit corporation is generally formed for a social or community purpose, such as an educational, religious or scientific reason.
One of the primary advantages of a nonprofit corporation is that it provides liability protection for its owners.
Nonprofit corporation overview
For a nonprofit corporation to be recognized in Ohio, its initial articles of incorporation must be filed with the Ohio Secretary of State’s office. They must contain the name of the corporation, where the corporation’s principal office will be located and its purpose. The person who creates the corporation, called the incorporator, must sign the articles.
The articles may also include the names of the nonprofit corporation’s initial directors and members, how long it will be in existence and any qualifications members must have or the classification of its members.
The nonprofit corporation must appoint a statutory agent who can accept service of process on behalf of the corporation and it must choose a name that is distinguishable, meaning that it cannot be currently reserved or registered by another entity.
Every five years, the corporation must file a statement of continued existence with the Ohio Secretary of State’s office. It is also responsible for updating the statutory agent’s information. This includes when the agent’s name or address changes, the agent resigns or passes away.
In Ohio, nonprofit corporations are not automatically tax exempt. It must be designated as a tax-exempt entity by the Internal Revenue Service and even if the nonprofit corporation does not owe taxes, it must still file an annual tax return. There is guidance available to ensure the nonprofit corporation is set up correctly.