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How to form a 501(c)(3) nonprofit corporation. A nonprofit corporation is purpose-driven, a company whose goal is not to make profit for themselves. Typically, they are an organization that wants to make money in order to help further a social cause or provide a public benefit. Let's get you started on the right path to forming a nonprofit corporation in New Mexico. (upbeat music) If you're not sure what a non-profit is, check out our other video "what is a nonprofit" linked below. How do you form a nonprofit corporation? There are two ways, you can do it yourself or you can hire a service to do it for you. Let's take a look at both options and help you decide how to go about forming your own nonprofit corporation. Option one, do it yourself. If you want to save money you can form a nonprofit corporation on your own. Let's take a look at the six steps to forming a nonprofit corporation on your own. One, choose and secure your nonprofit's name. The name you select for your nonprofit will establish its brand. It's the first thing most people will learn about your organization. It's important to pick a name that both aligns with your mission and follows the rules of naming guidelines in New Mexico. You'll need to check New Mexico's specific naming requirements, but in general, follow these rules when choosing a name. The name you pick for your organization should not include any words or terms that could be considered grossly offensive or misleading. The name must be distinct from that of any other corporation in New Mexico. For more information on what makes the name distinct, check out our other video "how to name your business in New Mexico", linked below. Once you have a name selected, do a name search to make sure it's available in New Mexico. After doing a New Mexico name search you'll want to do a domain search to see if your name is available as a URL. Even if you don't plan on making a website today, you may want to secure the URL so someone else doesn't take it. Two, appoint a registered agent. The registered agent can be an individual in the company including yourself or you can hire a professional service authorized to do business in New Mexico. They will send and receive legal papers on your behalf. These documents include official correspondence like legal summons and document filings which your registered agent will receive and forward to you. Your registered agent will also help remind you to file the necessary reports. Failure to properly maintain your nonprofit can result in fines and dissolution. So this assistance is valuable. Three, select directors and officers. Your nonprofit corporation will be made up of some number of directors and officers. The directors of a nonprofit are responsible for overseeing the operations of the organization. Together, they form the board of directors. The power and influence of the directors over the organization comes from them as a board. The directors themselves do not have any authority as individuals. The board typically creates the policies that govern the nonprofit. They also oversee management level hiring such as the company officers. The officers of the nonprofit such as the president or secretary are individuals with responsibilities and the authority to execute based on their job description. Together, the officers on the board will come together to make up the organizational structure of your nonprofit. An officer may also be on the board of directors and SelfWealth roles if allowed to do so by the organizational bylaws which we'll discuss later. If your organization plans to apply for 503(c)(3) status for federal tax exemptions, it must elect at least three directors not related to each other, a president and a secretary. Four, file the articles of incorporation. To form a nonprofit corporation, you'll need to file official papers with New Mexico. In New Mexico, this is called the articles of incorporation. Some possible information in the articles of incorporation you may have to include is: entity name, duration, purpose registered agent and registered office, initial directors and incorporators. For more information on the sections of New Mexico's articles of incorporation, check out our page linked below. Five operating procedures and housekeeping. Within 30 days of incorporation your organization must file an initial report with the secretary of state. This can be completed online through the online business portal which can be found in our links below. Before soliciting for funds and within 30 days of formation, you must register with the New Mexico Attorney General online. Once your nonprofit corporation has been formed, you'll want to start getting the structure of it together and determine how your nonprofit will be run, starting with the bylaws and conflict of interest policy. Your bylaws are the rules that determine how your organization will be governed and run. You can think about it as a constitution for your nonprofit. It makes the rules and priorities clear for everyone involved. In your bylaws, be sure to include, how the nonprofit will be governed, the roles of directors and officers, how meetings are held, voting procedures electing officers or directors, how records will be kept and managed, how disputes will be handled, and how bylaws will be added and amended in the future. When you're ready to get started, check out some bylaws templates linked in the description below. The conflict of interest policy are the rules set to ensure that decisions being made for the nonprofit are based on what is best for the organization and not being motivated by what is best for individuals. You'll want to make sure you have a draft of both the bylaws and conflict of interest policy before your organizational meeting. We have templates of both bylaws and conflict of interest policy linked in the description below. An organizational meeting is the first official meeting of your nonprofit. Some of the things that are discussed in a typical organizational meeting are: taking attendance to show you have a quorum, appointing temporary officers and chairman, adoption of bylaws, and adoption of conflict of interest policy. It's important to record minutes of the meeting and have it signed by all attending directors. We have some corporate minutes templates linked below to help you get the ball rolling. After your nonprofit has been formed, you'll need to apply for an EIN or employment identification number. An EIN is like a social security number for your nonprofit and it's used for things like filing for 503(c)(3) status, opening a bank account, applying for tax exempt status, and submitting tax returns. For more information on EINs, check out our other video linked below. Once you obtain your EIN, you must also register with the New Mexico Taxation and Revenue Department. Six, apply for 503(c)(3) status, federal tax exemption. What is federal tax exempt status? And why do you want it? When a corporation generates income, that corporation has to pay a federal income tax. As a nonprofit, your goal is to generate income that is used to help further a cause rather than fill the pockets of the company employees. Because of this, the federal government allows that nonprofits income not be taxed so that more of the money can go towards the cause that the nonprofit is supporting. Before your nonprofit can apply for 503(c)(3) status, it must file the articles of formation with the required provisions, adopt the bylaws and conflict of interest policy and have an EIN number. In order to file for tax exempt status, most organizations will need to file Form 1023 online or by mail and pay a fee of $600. If your organization's annual gross receipts are below $50,000, then you may be able to file Form 1023-EZ with the fee of $275. You can check your eligibility with the link in the description below. Once you've received your 503(c)(3) determination letter from the IRS, your organization will automatically be exempt from New Mexico corporate income tax. Option two, the second way it's a form of nonprofit is to hire a professional service to create your nonprofit for you. Hiring a professional service to file your forms and act as your registered agent for the nonprofit will cost you an additional 50 to $150. This fee only covers formation of a nonprofit corporation. If you wish for the professional service to file for 503(c)(3) status, the cost may go up to as much as $1,700 plus filing fees. However, there are several benefits to working with a pro. A hired registered agent helps with getting your reports filed on time, helps you stay organized by keeping your business mail separate, and is available at all regular business hours to accept official mail and legal papers on your non-profits behalf. If you want to form an organization or company in New Mexico with a purpose being to help a cause rather than make a personal profit, a nonprofit corporation is the best way to do that. Now you know all the steps to form a nonprofit in New Mexico. For a more detailed guide, visit our site at StartupSavant.com. Give the video a like if you found it useful and subscribe if you'd like to see more. If you have questions or encounter any roadblocks leave a comment below. Good luck in starting your nonprofit.