How To Register A Nonprofit In Maryland

Welcome to our pace-by-step guide on how to start a nonprofit in Maryland! If you've identified an unmet need in your community or field, and yous wish to help people on a bigger scale, we're excited to help guide you through the necessary first steps.

While there are many different types of nonprofits–from cultural to educational to religious–every nonprofit must follow the aforementioned federal and state regulations to contain and utilize for 501(c) status. This will non just give your organisation validity within the broader community, only it will also help y'all apply for grants, open up a bank account, and reduce liability issues.

At that place are several thousand nonprofit organizations currently operating in Maryland. Starting yours may experience daunting at first, but through this 15-step guide, we volition show you how to incorporate in Maryland, file for your Employer Identification Number (EIN), and file for tax-exempt condition, besides as every other required stride.

Nosotros're here to help you larn how to start a nonprofit in Maryland. Allow's go!

15 Steps to Starting a Nonprofit in Maryland

Name Your Organization
Choose a Nonprofit Structure
Recruit Incorporator(s) and Initial Directors
Appoint a Registered Agent
Ready and File Articles of Incorporation
File Initial Report
Obtain an Employer Identification Number (EIN)
Store Nonprofit Records
Establish Initial Governing Documents and Policies
Hold System Meeting of the Board of Directors
Get Maryland Land Taxation Identification Numbers and Accounts
Apply for 501(c) Status
Utilize for State Tax Exemption(due south)
Register for Charitable Solicitation
Obtain Other Business Licenses and Permits

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FAQs

i. Name Your Arrangement

The first step is to choose a name for your organization. You'll desire something that is engaging and relevant to the purpose of your nonprofit. It can help to practise a quick online search of your name, to make sure it won't be competing with anything major when people search for your nonprofit.

Maryland has a few requirements, as well. Y'all may already have a peachy name picked out, just be aware that your name can't be too similar to the name of another organization already operating in the state. Visit Maryland's Business Express site to search through their organization database to confirm if your proper noun is bachelor.

Your name must besides include either the word "Limited," "Incorporated," "Corporation," or "Visitor" (if it'due south not preceded by the word or a symbol for "and") or the abbreviation of ane of those words. Y'all can review all naming requirements for organizations in the state on Maryland'south Lawmaking and Court Rules.

If you plan to include characters or symbols, be sure to also review the IRS guidelines to help you when yous apply for your EIN.

Pro tip: Bank check to run across if your preferred name is available equally a domain proper noun or social media handle. This will assist clarify your make and make your organization more hands searchable.

ii. Choose a Nonprofit Structure

Maryland besides requires yous to choose a nonprofit corporation structure. The state offers 3 options for nonprofit organizations: religious corporation, tax-exempt nonstock corporation, and standard nonstock corporation.

If you're planning on applying for 501(c) condition, you'll nearly likely file as a tax-exempt nonstock corporation. In instance y'all're a nonprofit that is not seeking tax exemption, you'll file equally a standard nonstock corporation. And, if you lot're a religious congregation or place of worship seeking taxation-exempt status, you'll need to file as a religious corporation.

3. Recruit Incorporator(s) and Initial Directors

At this point, y'all should start building your initial team, specifically your Directors and Incorporator(s).

Your directors, who will brand upwards your countdown board of directors, should exist a diverse group with varied strengths, experiences, and insights. This will be the main governing torso of your organization, then you lot should also look for a grouping of people with experience in your field and strong relationships within your community. Bank check out some helpful insights and tips on finding nonprofit board members here to go started.

In Maryland, you need at least one director and there is no residency or membership requirement. The IRS, on the other hand, requires you to accept at least three, unrelated directors over the historic period of 18 when you apply for 501(c) status. The manager(s) can serve until the next annual meeting, or until a successor is elected.

Your Incorporator is the person who signs and delivers your articles of incorporation. This short-term office tin can be filled by multiple people, or ane person, and can be anyone.

4. Appoint a Registered Agent

Your registered amanuensis is the business or private authorized to receive legal documents and notices for your arrangement. In Maryland, your amanuensis must be located in the state and operate within normal business organisation hours.

While your registered agent tin exist anyone, we don't recommend listing yourself. The agent address becomes part of the public record upon incorporation, so information technology will probable receive a lot of junk mail service. Plus, the agent must be available to receive documents during normal business hours, meaning you tin can't be out of the office during your workday.

5. Prepare and File Articles of Incorporation

Filing your articles of incorporation is the legal starting time of your nonprofit organization in the eyes of the government. In improver to the IRS requirements for filing for 501(c) status, Maryland has a fix of rules and regulations for incorporation. Make certain to review both state and federal regulations thoroughly before filing your articles of incorporation. Think the language in the documents must match.

Maryland requires you to file your articles of incorporation with the Section of Assessments and Taxation (DAT). At that place are unlike documents depending on your nonprofit structure, so be careful to choose the right course. Maryland has also recently launched its Business Express site, with consolidated forms and information, every bit well as online filing options.

Maryland recommends filing online, which is automatically considered expedited. Y'all can also register past mail, fax, or in-person, and can find PDFs of the forms on the DAT site. You'll demand to include your organization name, accost, purpose, name, and address of your registered amanuensis, and the number of directors and their names.

At that place is a $100 filing fee, a $xx organization and capitalization fee, and a $l assessment fee for the Maryland Not-For-Profit Development Center Program, for a full baseline fee of $170 that must be paid when the document is submitted. There is an optional boosted $l expedited fee. Regularly submitted forms tin take 4-6 weeks to process, while expedited forms simply take 7 business organisation days. All of this information, forth with detailed instructions, tin be plant in the PDF version of the articles of incorporation.

6. File Initial Report

An initial study is a document laying out the initial state of your nonprofit organization when it's formed. Some states do require you to file this after submitting your articles of incorporation. But it is non a requirement in Maryland.

7. Obtain an Employer Identification Number (EIN)

An Employer Identification Number (EIN) is a unique, nine-digit number assigned to all organizations by the IRS, not simply those hiring employees. Information technology'southward an important identifier when filing for taxation exemption, submitting tax documents, and opening bank accounts.

Once your articles of incorporation have been canonical, you can file for your EIN. This class is complimentary and can be washed online, which needs to be completed in a single session, and will immediately provide your EIN. If y'all'd prefer, you can too file by telephone or fax, which will process in about 4 business organization days, or by mailing in a filled out Form SS-4, which will accept iv-5 weeks.

viii. Shop Nonprofit Records

As you work through these steps, you'll quickly first accumulating important documents and grade copies. A successful, well-run nonprofit volition build an organizational arrangement early on to efficiently store their records and of import documents. Considering many forms and licenses volition need to be referenced annually (if not more than oftentimes).

Once your construction'due south in place, yous can safely store your EIN, Articles of Incorporation, copies of filed forms, licenses, and meeting agendas and notes.

Pro tip: Build a system that is rubber, user-friendly, and navigable and so everyone can easily and quickly notice what they're looking for.

9. Found Initial Governing Documents and Policies

Establishing your initial governing documents and policies is a critical step in the formation of your nonprofit organization. They'll be approved at your initial lath of directors coming together, so y'all should typhoon them in advance. These documents will include your nonprofit bylaws and conflict-of-interest policy.

Your nonprofit bylaws are not mandatory in Maryland when you file your manufactures of incorporation. Nevertheless, the IRS asks for them when you file for 501(c) condition. So, you should ratify them before y'all file for tax exemption.

Nonprofit bylaws are the master governing certificate of your organization. They cover the internal rules for key positions and operating structures. If y'all're non sure where to start, we've outlined some tips and best practices in our article on nonprofit bylaws.

A disharmonize-of-involvement policy is a regulatory certificate for of import members of your nonprofit. At its near basic, it outlines how to avoid and mitigate conflicts of interest in the use of resource and assets, equally well every bit in the deportment of key stakeholders (like directors) to affirm that they're acting in the best involvement of the arrangement. You can find some more insights into ethics, accountability, and conflict-of-interest policies for nonprofits here.

10. Hold Organization Meeting of the Lath of Directors

Now that y'all've built your Board of Directors and drafted some of your initial governing documents, yous need to concur your starting time organization coming together. You should programme this earlier yous file for 501(c) status. That's because you'll need the approved bylaws and conflict-of-interest policy, likewise every bit minutes from the meeting, for your application.

This is likewise the moment where y'all should engage officers, pass a resolution affirming the establishment of the system, clarify the purpose of the nonprofit, and hash out important steps like opening a company bank business relationship. Maryland has a few officeholder requirements you'll need to meet. You lot need at least three officers: a president, treasurer, and secretary. In that location is a term limit of 1 year, and a successor must be elected. Dissimilar individuals tin can concur two or more than offices, except the president and vice president.

Pro tip: To make the most of your time, draft and share an agenda in advance of the meeting and designate someone to have minutes. If you're unsure of where to start, check here for a guide on how to run a nonprofit lath meeting.

11. Become Maryland State Taxation Identification Numbers and Accounts

Maryland has a combined awarding for registering for land taxes. Yous can submit Form CRA: Combined Registration Application to the Comptroller of Maryland either through mail or online. There is no cost to file this awarding. It will cover all taxes and licenses you need in the land. Also, all new organizations are automatically enrolled in Maryland's belongings taxation.

12. Apply for 501(c) Status

Another very important step is applying for 501(c) condition with the IRS. This is what volition allow you to get federal revenue enhancement exemption and save money. It will also brand a big difference as you apply for grants and sponsorships.

Yous'll apply for tax-exempt condition with the IRS by filling out Form 1023-EZ, Form 1023, or Form 1024, depending on your eligibility:

Form 1023-EZ. $275 fee, has to be filed online, and you'll hear back in almost ane month.
- Eligibility: you want to file every bit a 501(c)3, look to raise less than $50,000 in the side by side three years, and can answer "no" to every question on the eligibility worksheet (pg thirteen).
Grade 1023. $600 fee, has to be filed online, and you'll hear back in about 3 to 6 months.
- Eligibility: you don't encounter the requirements for Form 1023-EZ, but still want to file as a 501(c)3.
Form 1024 . $600 fee, has to be filed online, and yous'll hear back in near 3 to vi months.
- Eligibility: you're filing equally whatever other 501(c) organization.

You'll have to include your manufactures of incorporation including your nonprofit's purpose when y'all file, as well as limitations on distributions and any restrictions in case of dissolution.

If IRS approves your application, they'll recognize your revenue enhancement-exempt condition by sending you a conclusion letter. Yous can find the different statuses and filing requirements outlined on the IRS website, but working with a specialist is a smart way to make certain y'all practice everything correct the first time.

13. Use for State Tax Exemption(s)

Once y'all've received your determination letter confirming your federal tax exemption, you're eligible to apply for country income tax exemption. You can utilize for this by submitting the following to the Legal Department of the Revenue Administration Sectionalization:

Request for exemption from Maryland income tax
An explanation of the nature, purpose, and scope of your organization
The IRS determination letter of the alphabet
Your nonprofit bylaws
A copy of your organization's latest financial statement

Once you've received the exemption, you won't need to file income tax returns.

Once you lot've received your conclusion letter, your nonprofit is eligible for country and use taxation exemption, as well. The course yous'll demand to apply for this exemption is included in the Combined Registration Application, but tin also exist found on the Comptroller's website.

There's likewise the possibility for exemption from Maryland property tax. You'll need to contact the Department of Assessments and Taxation (DAT) office for the county your system is located in to get data about a possible exemption or an exemption awarding course. Y'all can visit DAT's website to find more information, a list of local offices, and copies of the forms.

14. Annals for Charitable Solicitation

Maryland, like many other states, requires you lot to annals for charitable solicitation (pregnant fundraising or asking for donations). If yous're planning on fundraising in other states every bit well, be sure to check the requirements for each.

To register in Maryland, you demand to file with the Office of the Secretary of Country. The blazon of registration depends on the level of charitable contributions.

If your organization received more than $25,000 in the most contempo fiscal year, yous'll need to include everything outlined in Form COR-92 and so submit it through mail or email. If your arrangement received less than $25,000 in the most recent financial year, you only take to fill out and file the Exempt Organization Fund class. The fee can be anywhere from $0-$300, depending on your level of contributions. You can look to hear back in four-6 weeks.

You lot'll also demand to update your registration annually. Everything you lot'll need to submit is included in the Annual Update of Registration Instructions and Class, which you lot'll need to file within 6 months of the end of your fiscal year.

Your arrangement might exist eligible for exemption. This typically applies to religious organizations, organizations affiliated with a religious organization; also, those only soliciting charitable contributions from its members.

If you fall into i of the former two categories, you'll demand to submit a written request for religious exemption and include your nonprofit bylaws, IRS conclusion letter, articles of incorporation, and information outlining your mission.

If y'all're in the third category, y'all'll have to request a membership exemption by submitting your nonprofit bylaws which must explicitly country a right or do good of your members beyond the correct to vote, elect officers, or hold office. You'll besides accept to include a statement outlining who is soliciting contributions.

15. Obtain Other Business Licenses and Permits

Depending on your programs and needs, y'all may accept to apply for other business licenses and permits in Maryland at both the land and local levels. Check out Maryland's OneStop Portal for any and all land licenses, forms, certifications, permits, applications, and registrations. You lot tin browse past apply or state agency.

You tin can likewise contact your county's function for whatever local requirements.

Conclusion

Congratulations! You're officially on your way to starting a nonprofit organization in Maryland. While these 15 steps might feel like a lot now, with organization and patience, you'll soon be making the difference you've been dreaming of!

While this is a solid foundation and a slap-up kickoff, remember that you'll need to remain compliant with federal and state requirements. This means filing almanac renewals and registrations on fourth dimension and filing your required tax forms.

We believe in you and are there for you lot every stride of the way. Visit our nonprofit weblog for more tips, tricks, and guides on every aspect of successfully running a nonprofit organization.

Often Asked Questions (FAQs)

In this section, we'll be answering some of the near mutual questions regarding how to beginning a nonprofit in Maryland.

1. How much does it cost to start a nonprofit in Maryland?

Starting a nonprofit in Maryland will toll anywhere betwixt $445-$1120, depending on your eligibility and charitable contributions.

Filing articles of incorporation costs between $170-$220 depending on whether or not you opt to expedite the procedure. Filing for 501(c) status costs between $275-$600 depending on which course you're eligible for. And, fees for charitable solicitation registration tin cost between $0-$300; it depends on how much you've received in the last fiscal year.

2. Can 1 person outset a nonprofit?

No. In order to apply for 501(c) status with the IRS, you need at least three, unrelated directors.

3. Can I pay myself a bacon in a nonprofit?

Yes. While yous should exist enlightened of your budgetary limitations when setting your salary, it is legal and normal for nonprofit employees (yourself included) to receive a taxable salary.

You should be conscientious non to pay yourself an exorbitant bacon. However, also much personal gain (specially if it adversely affects the operations of the nonprofit) might become a conflict of involvement.