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How to set up a nonprofit organization in New Jersey

If you’re passionate about helping others and have an idea to serve your community, starting a nonprofit is a great way to turn your vision into a reality. There are many different types of nonprofits – religious, educational, human service oriented, animal welfare, and more.

Selecting the type of nonprofit
The first step is to determine the type of nonprofit and select the members of the governing board. According to the IRS, there are more than 29 types of nonprofit organizations, and although I won’t cover all of the various types of nonprofits in this article, I’ll mention a few for clarity’s sake.

What all nonprofits have in common is a focus on helping others and benefiting their community. You are genuinely committed to these goals so you are already well on your way!

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According to the National Center for Charitable Statistics, there were over nonprofit organizations in New Jersey in 2012. Before you start a new nonprofit, make sure you have identified an unmet need in your community and know that there are not any existing organizations serving your cause. If another organization exists, consider working together, as that may be a better way to make an impact in your community and use existing resources.

When you are ready to start your nonprofit, plan to incorporate and apply for 501(c)(3) status, as these are important steps to fully achieve your goals.

Correctly categorizing your client’s nonprofit organization will allow for easier compliance with regulatory agencies. 501(c)(3) organizations are most common, given that they can be either private or public, and provide services that are educational, charitable or just more community-oriented.

As a 501(c)(3) nonprofit, you will be able to apply for grants and accept donations, be exempt from federal corporate income tax, and limit the liability of your organization’s officers and directors. Most importantly, you will gain credibility and legitimacy for your cause, instilling the public with confidence in your organization.

To start a nonprofit in New Jersey, you must file a Public Records Filing for a New Business Entity with the New Jersey Department of Treasury, Division of Revenue and Enterprise. You can file this document in person, by fax, by mail, or online. The public records filing costs $75 to file (plus a $3.50 convenience fee if you pay with a credit card). Once filed with the state, your public records filing officially creates your New Jersey nonprofit corporation, but truly preparing a nonprofit to pursue its mission involves several additional steps.

On the next section, we will see the basic steps to start your nonprofit in New Jersey.

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01- Choose a Name for 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:
New Jersey Department of the Treasury
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Mailing address:
Corporate Filing Unit, P.O. Box 252
Trenton, NJ 08646-0252
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Phone:   609-292-6748
Website:   http://www.state.nj.us/treasury/
Search Online:     NJ Portal

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02- Choose the initial directors and officers for your nonprofit

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.

New Jersey director requirements:
• Number: minimum 3
• Qualifications: 18 years old. No citizenship requirement. No residency requirement. No membership requirement.
• Term: 1 year
• Quorum: majority
• Committee: minimum 1 member

New Jersey officer requirements:
• A president, a secretary, and a treasurer are required.
• Two or more offices may be held by the same individual. This person may sign instruments in only one capacity when the signatures of two officers are required.
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03- Choose 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 New Jersey registered agent office is located in Marlton, NJ. We offer registered agent service independently or as part of our nonprofit formation packages.
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04- Prepare and file your organization’s nonprofit articles

You create your nonprofit entity by filing organizational documents with the New Jersey Department of the Treasury. Your articles of organization must include basic information such as:

• your nonprofit’s name
• its purpose
• certain provisions related to members, if applicable
• how trustees will be elected
• the address of the nonprofit’s initial registered office and the name of the initial registered agent at that location
• the number of trustees and the names and personal addresses of the trustees
• the names and addresses of the incorporators and the personal address of each incorporator
• the duration of the corporation, and
• the method of distribution of assets upon dissolution.

The incorporator who signs the articles of organization must be at least 18 years old.
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05- Obtain a Federal EIN from the IRS

Your nonprofit’s federal employer identification number (FEIN or EIN) is a lot like an individual’s social security number—without one it’s hard to establish legitimacy in the eyes of other businesses, most banks, vendors, and potential donors. You’ll also need an EIN to apply for federal tax-exempt status with the IRS.

Once the State of New Jersey approves your articles, you can apply for an EIN online at the IRS website, by fax, or by phone. Or you can sign up for Northwest’s convenient EIN service for an additional fee.

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06- Adopt your nonprofit’s bylaws

New Jersey requires your nonprofit’s board of directors to adopt bylaws at its first official meeting. Why? Because without bylaws your nonprofit is flying blind. Will your nonprofit have members? If so, do those members have the right to vote in the election of your nonprofit’s directors? What are the distinct responsibilities of your nonprofit’s president and secretary? Will your nonprofit hire paid employees? (And so on!) Without clear answers to questions like these, your nonprofit’s directors and officers can’t steer the organization along a coherent pat.

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07- 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.

08- Apply for Federal and/or State Tax Exemptions

Incorporating as a New Jersey nonprofit doesn’t automatically qualify your organization for federal tax-exempt status. For that to happen, you need to file an Application for Recognition of Exemption with the IRS detailing your nonprofit’s history, purpose, and finances.

Your object is to show that your nonprofit qualifies as one of the more than two dozen different types of tax-exempt entities recognized by the IRS in Section 501(c) of the Internal Revenue Code. Most nonprofits seek recognition under Section 501(c)(3), which applies to public charities and private foundations. If you want 501(c)(3) tax-exempt status for your nonprofit, make sure your Public Records Filing features a statement of purpose and dissolution of assets clause that include the specific language required by the IRS for 501(c)(3) organizations.

All registered New Jersey nonprofits are exempt from the state’s corporate business tax, but you will need to apply to the NJ Department of the Treasury’s Taxation Division to seek a state sales tax exemption and exemption from the petroleum products gross receipt tax. Learn more at Northwest’s guide to New Jersey state tax exemptions.

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09- Obtain New Jersey State Licenses

Does A New Jersey Nonprofit Need A Business License?
New Jersey doesn’t issue a general, statewide business license, but specific cities and counties may have licensing requirements of their own. It’s best to contact your local city clerk’s office to find out which (if any) of your nonprofit’s activities require a license.
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How Does My Nonprofit Register For New Jersey Tax Accounts?
To register for New Jersey state tax accounts (such as an employee withholding tax), submit a Business Registration Application (form NJ-Reg) to the New Jersey Department of the Treasury.
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Do I Have to Register My Nonprofit as a Charity in New Jersey?
Most New Jersey charities will need to register as a New Jersey charity with the New Jersey Office of the Attorney General’s Division of Consumer Affairs and renew your registration each year. The registration and renewal fees vary, depending on how much money your nonprofit charity raises or expects to raise, but both sets of fees follow the same pattern.

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10- Open a Bank Account for Your NJ Nonprofit

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To open a bank account for your New Jersey nonprofit, you will need to bring the following items to the bank:
• A copy of your New Jersey Public Records Filing
• A copy of your nonprofit’s bylaws
• Your New Jersey nonprofit’s EIN
We recommend calling your bank ahead of time to determine their requirements. If your nonprofit has several directors and/or officers, you may even need to bring a resolution authorizing you to open the account in the name of your nonprofit.

It's a Social Media and digital marketing consultant and owner and founder of LFStudio.com. He is also author and entrepreneur. He helps small businesses to grow, get clients and generate income.

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