5 Steps to Successfully Building Your Nonprofit Organization

Starting a nonprofit organization is an exciting way to make a positive impact in your community, but it also requires careful planning and compliance with state and federal regulations. At The Law Office of Reid Felsing, PLC, we specialize in guiding individuals through the legal complexities of forming a nonprofit in Michigan. Below are the five essential steps to help you get started.

Step 1: Check the Availability of a Name for Your Nonprofit
The first step in forming your nonprofit is to choose a name that reflects your mission and purpose. Before you can proceed, you must ensure that your chosen name is unique and available for use. You can do this by checking the Michigan Department of Licensing and Regulatory Affairs (LARA) database. It’s important that your name is distinct to avoid conflicts with existing organizations and to establish your brand’s identity from the start.

Step 2: Draft and File the Articles of Incorporation
Once you have a name, the next critical step is drafting and filing the Articles of Incorporation. This document establishes your nonprofit's legal existence and conveys its purpose to the state. In Michigan, the Articles of Incorporation must include the organization’s name, its purpose, and the name of your resident agent, who will handle official correspondence on behalf of your nonprofit. Filing this document with the state is essential to formally create your nonprofit organization.

Step 3: Consider Drafting Bylaws
Bylaws are the internal rules governing how your nonprofit will operate. While not legally required for all nonprofits, they are highly recommended if your organization plans to engage in activities that require clear, formal rules. Bylaws typically address the roles of board members, voting procedures, and other operational guidelines. Drafting bylaws can help prevent future disputes and provide a clear framework for decision-making as your nonprofit grows.

Step 4: Register as a Charitable Trust with the Michigan Attorney General
If your nonprofit is established for charitable purposes, you are required to register with the Michigan Attorney General's Charitable Trust Section. This step ensures that your nonprofit is compliant with state laws regarding charitable organizations, especially if you plan to solicit donations or manage charitable assets. Failing to register can result in penalties or restrictions on your ability to fundraise.

Step 5: File Required Documentation for Tax Benefits
To take full advantage of tax benefits for your nonprofit, it is important to file the necessary documentation with both the IRS and the state of Michigan. This includes your application for federal tax-exempt status (IRS Form 1023 or 1023-EZ) and other forms required to obtain recognition as a tax-exempt organization. These filings will enable you to receive qualified tax benefits for donations, making your nonprofit more attractive to potential donors.

We’re Here to Help
Forming a nonprofit can be a complex process, but The Law Office of Reid Felsing, PLC is ready to guide you every step of the way. Whether you need assistance with drafting your Articles of Incorporation, filing for tax-exempt status, or registering with the Michigan Attorney General, we have the expertise to ensure that your nonprofit is set up for success. Contact us today at (517) 885-2000 or via email at [email protected] to get started.

By following these steps, you’ll be well on your way to forming a nonprofit organization in Michigan that can focus on its mission without getting bogged down by legal obstacles. Let us help you make a difference!