Starting a non-profit can be a lengthy process; particularly if you wish to solicit donations, apply for grants, and be tax exempt by applying for 501(c)3 status with the Internal Revenue Service.

You may want to visit the articles in the “Library Non Profit” section of this website. Here you will find at least 25 printable handouts that you should review. Download and study carefully the comprehensive pamphlet, Business Planning Tools for the Non-Profit Organizations found in the Strategic Planning Section of the Non Profit Library.

Now you will understand and be more prepared to begin the process of organizing your non-profit. Here are the necessary steps to achieve that end. You may wish to review them & determine how many you have already completed 

1) Formulate a mission statement.

2) Form a Board of Directors.

3) File articles of incorporation. Go to https://sos.tn.gov/sites/default/files/forms/ss-4418.pdf Fill out and remit the $100

4) Draft by-laws.

5) Develop a strategic plan. SCORE can assist through mentoring.

6) Develop a business plan.  Obtain the necessary software or template/models available from SCORE.

7) Develop a budget.

8) Develop a record keeping system.

9) Research & settle on an accounting system.

10)  File for 501(c)(3) status. If you will be organized and operated exclusively for one or more of the following purposes: charitable, religious, educational, scientific, literary, testing for public safety, fostering national or international amateur sports competition, and prevention of cruelty to children and animals.

Obtain a copy of IRS Publication 557,”Tax Exempt Status for Your Organization”.   Download for review a copy of IRS bulletin, Applying for 501(c)(3) Tax Exempt Status at this web page http://www.irs.gov/pub/irs-pdf/p4220.pdf 

Complete form 1023 found at http://www.irs.gov/pub/irs-pdf/f1023.pdf. The cost will be $850. 

11) Sales & Use Tax Certificate (Sales Tax Number) This is necessary if you intend to sell any
products.  Complete the Tennessee Department of Revenue Application for Registration (RV-F1306901). You need to include a copy of your Tennessee and IRS Exemption papers. This has to be renewed annually and the License/Permit has to be publicly displayed. 

Businesses selling retail are liable for collection and payment of Tennessee Sales and Use Taxes. Contact the Tennessee Department of Revenue 531 Henley Street, Knoxville, Tennessee 37902. Telephone: (865) 594-6100 to obtain your Certificate. There is no cost. Application registration can be found on-line at   https://www.tn.gov/revenue/taxes/sales-and-use-tax/registration.html

Once you have this certificate, you will be able to purchase items used for resale without paying sales tax. A blanket Certificate of Resale can be obtained on line at  https://www.tn.gov/revenue/taxes/sales-and-use-tax/sales-and-use-tax-certificate-verification-application.html

12) File for local tax exemption. No Business License will be required once you have non-profit status. You need to contact the City & County Business License office to confirm.

13) Fulfill charitable solicitation law requirements.  Complete form SS-6001 found at https://sos.tn.gov/products/charitable-solicitations-and-gaming/charitable-organizations-initial-registration-form and remit fee of $ 50.00

14) Obtain a Federal Employer Identification Number. You must obtain a Federal Employer Identification Number (EIN) if you have one or more employees, or if you operate as a trust, estate, corporation, partnership, or a similar non-individual organization (whether you have employees or not). There is no cost to obtain an EIN. You can apply on-line to get your EIN from the IRS at this web address  https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online You will obtain it immediately upon completion of the validation.

Should you wish to do so you can schedule an appointment at your convenience to discuss all the aspects of your Vision. It can be at our office here in Knoxville 412 N. Cedar Bluff, Suite 450 Pinnacle Building or at a location more convenient for you.

Source: Charles Christiansen, SCORE Mentor June 2011, updated Walter Williams, SCORE Mentor May 2018.

The material in this publication is based on work supported by the U.S. Small Business Administration under cooperative agreement SBAHG-04-S-0001. Any opinions, findings and conclusions or recommendations expressed in this publication are those of the author and do not necessarily reflect the views of the U.S. Small Business Administration. The information contained in this publication is believed to be accurate and authoritative but is not intended to be relied on as legal, accounting, tax or other professional advice. You should consult with a qualified professional advisor to discuss issues unique to your business.
Copyright 1990. SBA retains an irrevocable, worldwide, nonexclusive, royalty-free, unlimited license to use this copyrighted material.

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