Legal Checklist for Establishing and Operating a Nonprofit 501(c)(3) Organization


  • “Clear” the proposed organization name for corporate and trademark purposes (to be sure it is available and does not infringe anyone else’s trademark rights).

  • Finalize name; select initial board of directors and officers.

  • Create and file (with applicable state) articles of incorporation.

  • Create bylaws for approval by initial board of directors.

  • Create board resolutions (of initial board of directors) naming officers, approving the bylaws, and authorizing certain persons to act on behalf of the corporation to obtain an employer identification number (“EIN”) from the Internal Revenue Service (“IRS”), open bank accounts, and apply for recognition of federal tax-exempt status.

  • Obtain an EIN from the IRS (online).

  • Open bank account(s) in the name of the new corporation (generally all that is needed are the certificate of incorporation and EIN, and sometimes a board resolution).

  • File an application (online) for recognition of tax-exempt status under Section 501(c)(3) with the IRS (Form 1023). Ancillary forms that are required are Form 2848 (power of attorney) and Form 8718 (user fee).

  • File an application with the U.S. Patent and Trademark Office to obtain all possible rights in and to the organization’s name, logo and other marks (if able to do so).

  • File applications for qualification to do business as a “foreign” corporation in the state(s) where offices are located if state(s) is/are different from the state of incorporation.

  • Register in all applicable states for payroll taxes and obtain new state tax identification numbers (if necessary).

  • Once IRS recognition of 501(c)(3) tax-exempt status is obtained (the Determination Letter), file for recognition of state corporate income tax status in the state where the principal office is located.

  • Purchase sufficient directors and officers liability insurance, commercial general liability insurance, cyber insurance, and other applicable insurance.

  • Register with state(s) for charitable solicitation where required. If commercial co-ventures (CCVs) will be undertaken, ensure state law registration and other compliance where applicable.

  • Create an employee handbook (if there will be even one employee) and governance and other policies (e.g., conflict of interest policy, whistleblower protection policy, record retention policy, etc.).

Ongoing operation:

  • File regular corporate reports as required by the state of incorporation, and state(s) in which the corporation is authorized to do business (usually an annual requirement).

  • File regular charitable solicitation reports as required by applicable states (usually an annual requirement).

  • Hold regular (as provided for in the bylaws) meetings of the board of directors; generally recommend at least three times a year. These can be conducted by telephone or videoconference.

  • File Form 990 and Form 990-T (if applicable) each year with the IRS (consider engaging an accounting firm to assist with preparation).

  • Make regular employment tax and other withholding filings with the IRS and applicable states.

  • Make required filings with the U.S. Patent and Trademark Office to maintain trademark protection (if there are federal trademark registrations).

Note that this list is, by definition, partial, incomplete, high-level, and summary in nature. This article should not be taken as legal advice; the advice of a knowledgeable legal professional is strongly encouraged.

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Jeff is one of the nation’s leading nonprofit attorneys, and a highly regarded and frequent author, lecturer, media commentator, and expert witness on nonprofit legal matters. Formerly the longtime chair of one of the country’s largest nonprofit law practices, he is the recipient of numerous distinguished national awards and honors.
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