How to Form a Nonprofit Corporation Under Kentucky Law

How to Form a Nonprofit Corporation Under Kentucky Law

Forming a nonprofit corporation in Kentucky involves several key steps that ensure your organization is legally established and compliant with both state and federal regulations. This guide will walk you through the process, making it easier to navigate.

Step 1: Choose a Name for Your Nonprofit

Begin by selecting a unique name for your nonprofit that reflects its mission and purpose. Ensure that the name complies with Kentucky naming rules by including “Corporation,” “Incorporated,” or “Limited” in the title. You can check the availability of your desired name on the Kentucky Secretary of State’s website.

Step 2: Designate a Registered Agent

Every nonprofit corporation in Kentucky must appoint a registered agent. This individual or business must have a physical address in Kentucky and be available during normal business hours. The registered agent will receive legal documents and important notices on behalf of the corporation.

Step 3: Prepare and File Articles of Incorporation

Your nonprofit must file Articles of Incorporation with the Kentucky Secretary of State. This document includes crucial information such as:

  • The nonprofit's name
  • Registered agent details
  • The organization’s purpose
  • Incorporators' names and addresses
  • Desired duration of the corporation (generally perpetual)

The filing fee for the Articles of Incorporation is currently $8, and you can submit it online or via mail.

Step 4: Draft Bylaws

Bylaws outline how your nonprofit will operate, including governance structure, membership processes, board duties, and meeting protocols. While bylaws are not submitted to the state, they are essential for guiding the internal functioning of your organization and should be adopted at the first board meeting.

Step 5: Appoint a Board of Directors

Kentucky law requires a minimum of three directors on the board of your nonprofit. Ensure that your board members are not related by blood or marriage to maintain independence in decision-making. The board will oversee the organization’s activities, ensuring it stays true to its mission.

Step 6: Apply for an Employer Identification Number (EIN)

No later than when you file your Articles of Incorporation, apply for an Employer Identification Number (EIN) from the IRS. This number is essential for tax purposes and is necessary for opening a bank account in the nonprofit’s name. You can apply for an EIN online, and the service is free.

Step 7: File for 501(c)(3) Tax-Exempt Status

If your nonprofit seeks tax-exempt status, you must apply to the IRS under Section 501(c)(3). This application involves submitting IRS Form 1023 or Form 1023-EZ, depending on your organization’s size. Once approved, your nonprofit can receive tax-deductible donations.

Step 8: Comply with State Requirements

Depending on the activities of your nonprofit, you may need to register with the Kentucky Attorney General's office, especially if you plan to solicit donations. Additionally, stay informed about local regulations, such as business licenses or permits, relevant to your nonprofit's operations.

Step 9: Maintain Compliance

After establishing your nonprofit, it's important to maintain compliance with both state and federal laws. This includes filing annual reports with the Kentucky Secretary of State, holding regular board meetings, and keeping accurate financial records. Regular auditing and compliance checks will help avoid potential legal issues in the future.

Conclusion

Establishing a nonprofit corporation in Kentucky is a structured process requiring careful planning and adherence to legal guidelines. By following these steps and remaining committed to your mission, you can successfully create a nonprofit that serves your community and makes a meaningful impact.