How to Form a 501c3 Nonprofit Corporation in California

Anyone who wishes to form a 5013 nonprofit corporation in California must first register their nonprofit business in the state of California. This is done in the same way a for-profit business registration is done: by filing Nonprofit Articles of Incorporation with the state, pursuant to the Nonprofit Corporation Law of the California Corporations Code. California distinguishes between three types of nonprofit, nonstock corporations: Religious, Public Benefit, and Mutual Benefit.

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After your nonprofit corporation is registered with the state, if your business is formed for scientific, religious, charitable, literary, or educational purposes, you can apply for 501c3 status with the IRS. This status, and the tax benefits associated with the status, is not available to businesses formed for profit or to nonprofit corporations not formed for one of the above purposes. If you improperly attempt to gain 501c3 status, your application will be denied.

Register your Nonprofit Corporation in California

Your Nonprofit Corporation’s Articles of Incorporation will include much the same information as a for-profit California corporation, with the exception of a more detailed purpose statement and, if applicable, the clauses required by the IRS in order to later obtain 501c3 status.

Your Nonprofit Articles will include, at minimum, the following:

  • Business name as you wish it to be legally recorded
  • Type of nonprofit (Public Benefit, Mutual Benefit, Religious)
  • Specific purpose statement
  • Registered Agent’s name and address
  • Signature
  • Certain language the state and/or IRS will require in order to grant tax-exempt status

Once placed on file by the Secretary of State, your organization becomes a legal entity and is authorized to do business in the state of California. If you intend to form a 501c3 Nonprofit Corporation, you are now able to begin the tax-exempt status application process with the IRS.

Applying for 501c3 Tax-Exempt Status from the IRS

There is a great deal of information the IRS will need about your business in order to grant you tax-exempt status. Some of the information you can expect to provide is as follows:

  • Form 1023
  • Articles of Incorporation, including specific 501c3 language
  • Three years of donation estimates
  • Detailed description of your business activities
  • Three years of expense estimates
  • Bylaws
  • Conflict of Interest form
  • Information about any organization from which you are involved in fundraising or donations
  • Depending on the amount of compensation they are to receive, a list of any independent contractors or officers
  • Copies of any leases or contracts with any of the above persons

This is by no means a comprehensive list of the information the IRS will require. Depending on your intended business activity, you may be required to provide further information or documentation.

When you use Click and Inc to file your 501c3, we make sure the required 501c3 language is present in your state Articles of Incorporation from the very beginning. Learn more about forming a 501c3 Nonprofit.

Further Responsibilities of a California Nonprofit Corporation

All corporations in California, whether nonprofit or for-profit, must submit a Statement of Information within 90 days of filing. Future Statements of Information must be submitted biennially.

In California, nonprofit entities are taxable; until your corporation has formally obtained tax-exempt status from the Franchise Tax Board, it will be responsible for paying a minimum $800 franchise tax along with its annual return.

If any of the above information changes, you will need to file an amendment to alert the state of those changes. Failure to do so could result in the state being unable to contact you with valuable filing and renewal notices, which may cause certain late fees to be incurred.

You will be required to obtain an Employee Identification Number, also known as an EIN. The EIN is obtained through the IRS. It is best to check with the IRS or a legal advisor to determine what other IRS requirements are present for a 501c3 Corporation.

Depending on your purpose and your local jurisdictions, you may be required to open any number of Business Licenses at the state, county, or town level. Learn more about our Business License Services to streamline the process.

Other Types of Businesses in California

For information on other types of businesses in California, please explore the links below.