Delaware Nonprofit Corporation Guide

A nonprofit is an organization that exists to either serve some charitable cause or the shared interest of a group of people. Any revenue generated by a nonprofit organization is directed towards supporting its mission rather than returning a profit to its members. 

Many nonprofits conduct revenue generating activities, like selling products or services. However, it’s what they do with this income that makes them different from for-profit businesses. You will often hear of nonprofits as either being public charities or private foundations.

Nonprofits are formed legally at the state level and are typically structured as Nonstock Corporations. If set up properly, a Nonstock Corporation can obtain exemptions from paying federal and state taxes on their income.

You will often hear of nonprofits as either being public charities or private foundations that  support charitable causes pertaining to education, healthcare, social services, the arts or the environment. However, nonprofits can take many forms. 

Homeowners’ associations, veterans groups, chambers of commerce and labor unions are also examples of nonprofit organizations that support the shared interests of their members. Religious organizations, including churches, synagogues and mosques can also be nonprofits.

Nonstock Corporations is the type of legal structure that most nonprofit organizations often use. Unlike General Corporations, Nonstock Corporations do not issue shares of corporate stock. This means that a Nonstock Corporation does not have beneficial owners and does not pay out dividends to any beneficiaries. 

Because a Nonstock Corporation does not have any shareholders, it is eligible to apply for a section 501(c)(3) federal tax exemption from the IRS. 

501(c)(3) refers to the section of the U.S. tax code that allows nonprofit corporations to be exempt from paying federal income tax on activities related to their exempt purpose. The IRS recognizes these entities as being organized and operated exclusively for specific charitable, religious, educational, scientific, or other public-benefit purposes. 

501(c)(3) status is the key to allowing many charitable organizations to function. In addition to the federal tax exemption, people who make donations to a 501(c)(3) organization can deduct certain contributions from their taxable income.

To obtain a 501(c)(3) tax determination letter for your organization, you need to complete three main tasks:

1. Incorporate a Nonstock Corporation
2. Obtain an Employer Identification Number (EIN)
3. Submit Form 1023 to the IRS

First you will need to complete a filing with the Secretary of State to register a Nonstock Corporation. This is the type of corporate structure you’ll need to obtain 501(c)(3) tax exempt status.

The document you file with the state, often called a Certificate of Incorporation, needs to contain specific language and provisions required by the IRS. IncNow’s can successfully form your Nonstock Corporation in Delaware.

After your Nonstock Corporation is officially formed, you will need to get a federal tax identification number from the IRS, known as an Employer Identification Number (EIN). Submit the Form SS-4 to the IRS to apply for the EIN number.

Once you’ve formed a Nonstock Corporation and have been assigned an EIN number by the IRS, then you can begin to apply for 501(c)(3) tax exempt status. To apply, complete and submit the IRS Form 1023.

Here are the steps you need to follow to incorporate a nonprofit in Delaware.

You can give your Delaware nonprofit corporation any name that you want. However, your corporate name has to be unique. The name cannot be similar to any company already registered in Delaware.

The name of your Delaware nonprofit also needs to include one of the following corporate endings:

• Inc. – or “Incorporated”
• Co. – or “Company”
• Corp. – or “Corporation”

IncNow‘s Incorporation Specialists can check if your preferred business name is available in Delaware before you incorporate.

Delaware law requires you to appoint a Delaware Registered Agent for your nonprofit corporation. If you are not located in Delaware, you need to appoint a company, like IncNow, to be your Registered Agent.

A Delaware Registered Agent needs to meet the following requirements:

• Maintain a physical street address (not a P.O. Box) within the State of Delaware.
• Be available during standard business hours (9:00 A.M. to 5:00 P.M., Monday through Friday).

The main purpose of a Delaware Registered Agent is to receive “Service of Process” on behalf of the corporation. This includes official court filings, such as lawsuits and subpoenas, as well as state tax notifications.

To officially establish your Delaware nonprofit corporation, you need to file a Certificate of Incorporation with the Delaware Secretary of State. This document creates the public record of the company’s existence.

The Certificate of Incorporation must include:

• The name of the corporation.
• The name and address of the Registered Agent.
• The signature of an authorized incorporator.

Additionally, the Certificate of Incorporation has to include specific language required by the IRS to obtain its tax exempt status. IncNow’s Nonprofit Corporation Package includes the tax exemption language in the Certificate of Incorporation by default.

Beyond the public filing, Delaware corporations need to prepare specific internal documents to preserve its legal standing. These documents include:

• Corporate Bylaws: The internal rulebook for governance and operations.
• Corporate Minute Book: A centralized record of meeting minutes and major decisions.
• Organizational Resolutions: The initial “Action of Directors” required to officially appoint officers and issue stock.

IncNow’s Now and Complete Nonprofit Corporation packages are designed to ensure compliance by including all of these necessary documents, professionally prepared for your Delaware nonprofit corporation.

After your Delaware nonprofit corporation is officially formed, it must obtain an Employer Identification Number (EIN) from the IRS. This unique federal identifier is mandatory for paying taxes, hiring employees, and opening corporate bank accounts.

Business owners can apply for an EIN directly through the IRS website or by mail. The application process requires completing and submitting IRS Form SS-4.

After your nonprofit is officially incorporated and you have obtained an EIN number, you can begin the process of applying for tax exempt status.

Complete and submit the Form 1023 to the IRS after you incorporate with IncNow to obtain tax exemption for general charitable, educational, scientific, or religious purposes. The IRS tax exemption determination will be retroactive to the date of incorporation if the IRS Form 1023 is filed within 15 months of the incorporation date.

The cost to form a Delaware nonprofit corporation depends on the level of service and processing speed you need. The mandatory base filing fee paid to the Delaware Division of Corporations is $109. For expedited filing, the state charges an additional $50.

 

IncNow offers three distinct formation packages for Delaware corporations:

• Basic Nonprofit Corporation Package ($199): The Basic Nonprofit Corporation Package covers the filing of your Delaware nonprofit corporation and includes one full calendar year of Delaware Registered Agent Service.
• Complete Nonprofit Corporation Package ($298): The Complete Nonprofit Corporation Package includes the filing of your Delaware nonprofit corporation, one full calendar year of Delaware Registered Agent Service, and all necessary internal company documents to ensure compliance. It includes standard filing speed.
• Now Nonprofit Corporation Package ($398): The Now Nonprofit Corporation Package is our most popular option. The Now Nonprofit Corporation Package includes every document in the Complete Nonprofit Corporation Package, plus the $50 expedited filing fee for faster turnaround.

Exclusive Offer: Use the discount code Save50 at checkout to receive $50 off the Complete Nonprofit Corporation or Now Nonprofit Corporation package.

Yes, nonprofit corporations can, and often do, make money. Despite being named “nonprofits”, nonprofit organizations can turn a profit. However, they do not return these profits to their members in the form of income. Any profits get reinvested into the organization’s mission or are used to support other nonprofit organizations with similar goals.

IncNow offers packages to help you properly register your Delaware Nonprofit Corporation. Our Now Nonprofit Corporation Package includes the registration of your Delaware nonprofit as well as all of the corporate documents you need with industry best turnaround time.

You can compare IncNow’s Delaware Nonprofit Corporation packages here: Compare Packages