Step 1: Designate the director of the board
California law requires at least one director of the board. That person can be you or another officer from your organization.
Step 2: Select the name of your nonprofit organization
Most likely, you have a name for your organization. Now is the time to get it properly registered, and you need to ensure that another nonprofit has not chosen your specific name. In order to find out, you can do a quick search on the California Secretary of State website.
Step 3: File the California nonprofit articles of incorporation
In order to file the proper articles of incorporation for your type of nonprofit, choose from a variety of options here. This filing requires specific information such as entity name, contact information, statement of purpose, and outlines what is needed to meet state and federal tax exemptions. Processing times vary but are typically five business days from receipt of the filing.
Step 4: Notify the IRS & California Secretary of State
Next, you will want to let the IRS know that you intend to set up a nonprofit organization by filing a form 1023. This should be done soon after the date of organization with the state, and the IRS will determine your tax-exempt status with the federal government. They will send you a letter of determination after their review. You will then need to file an initial registration form (instructions) with the California Attorney General’s Registry of Charitable Trusts and file a Statement of Information with the CA Secretary of State.
Step 5: File your state application for tax-exempt status
Important Note: Until the CA Franchise Tax Board grants tax-exempt status to the organization, all nonprofit organizations are subject to California corporation franchise tax or income tax .
Step 6: Hold a Board of Directors Meeting
Finally it is time to hold your first Board of Directors meeting and make sure to record and archive those meeting minutes! This meeting should cover your bylaws, approve financial information such as bank accounts, and reimbursement of start-up costs if appropriate. You should also cover compensation of the managing officers if applicable; and at the end of the meeting, everyone should be on the same page of both the financial operations and funding strategies going forward.
For more information on establishing a nonprofit in California, see the schedule of webinars and seminars.