ten steps
for starting a
Nonprofit, Tax-exempt Corporation in Connecticut

with hyperlinks to the necessary documents and filing instructions;
where there is no hyperlink there is no prescribed form - consult a formbook or seek legal advice (SEE DISCLAIMER)
(LAST UPDATED 9/5/2007; PLEASE NOTIFY ME if you find BAD LINKS)

BEFORE YOU START -- SURE YOU WANT TO DO THIS?  Click for a list of factors you may wish to consider

Step 1. Action by Incorporators. Incorporators adopt a certificate of incorporation and bylaws, appoint directors and statutory agent for service. The incorporators may also appoint officers to serve until the directors' meeting, although it is more common to have the directors do this at their first meeting, or by consent.

Documents required for incorporators' meeting:

1. Certificate of Incorporation. This should contain appropriate language to permit qualification as tax exempt (be sure to read IRS Publication 557 BEFORE submitting -- not all purposes or activities qualify for examption), and is signed by (1) incorporators and (2) a Connecticut resident as "statutory agent for service," accepting appointment. You may file using the State form with attachments, or skip the state form if your document includes the same information as the state form requires. A Connecticut business address is also required.  Remember that this document trumps your bylaws.  In other states this may be known as the "articles" of incorporation.
   

2. Minutes of the meeting (signed by duly appointed secretary of the meeting) OR unanimous written consent (signed by all incorporators) stating that bylaws have been adopted, directors elected, and any other actions taken.  It is my view that incorporators may appoint initial officers rather than leaving this to the directors.
   

3. Bylaws (preferably signed by incorporators).  Make sure these are consistent with the certificate!

Step 2. Action by Directors. Directors meet and elect officers (if not already done), authorize application for tax exemption and select counsel to assist, and any other pertinent matters (e.g. authorize opening bank account).

Documents required for directors' meeting :

1. Minutes of meeting (signed by secretary) OR unanimous written consent (signed by all directors).
   

2. State form: Organization and First Annual Report (signed by an officer). Residential and business addresses required. No P.O. Boxes are acceptable.

Documents to be filed:

1. Certificate of Incorporation.  (State form or your substitute so long as it includes everything in the state form.)  SEE ABOVE regarding the required ingredients!
   

2. Organization and First Annual Report.  (State form required.)
   

Fees: $65 filing fees+ $25 for expedited service+ $25 for certified copy of certificate of incorporation.  Click for Complete Fee Schedule.

NOTE:  as of this writing (July 2004) there are long delays at the Secretary of State's office.    Expedited Service is almost a necessity!  Also, the $25 expediting fee applies to EACH thing you want expedited.  Example:  You want to file expedited plus you want the certified copy expedited.  Add $50.

Timing: Can obtain confirmation within 48 hours of filing.

Step 4.  File with Public Charities Unit of Attorney General's Office. Before any fund-raising, either file an Exemption Certificate CPC-54 (for example, if anticipate fundraising gross revenues of under $50,000, if a church, or another exemption applies), or a Registration Certificate PCUREG-1. Each requires signature of two officers and $25 fee. You can postpone this if not fundraising.

Step 5.  OBTAIN tax ID number FROM IRS (often needed to open a bank account; needed to complete exemption application):

Documents:

1. IRS Form SS-4 (application for employer identification number); may be applied for earlier. Read the instructions.   Must be signed by officer, preferably president, and must include social security number of filer. Since December, 2001, the form permits a third party to be named to whom the number, once assigned, may be given if the SS-4 is submitted by fax/internet.  

Timing:

1. NEW AS OF APRIL 2003:  You can submit this ONLINE and obtain a number IMMEDIATELY - CLICK HERE.
   

2. Submit by fax (see page 2 of instructions) - get number within a few days faxed to organization or designated third party.
   

3. Officer can call directly and get a number over the phone. A third party cannot do this.

Documents to be prepared and filed with IRS (you can fill them in online, then print them out):

1. IRS Form 1023 Application (signed by President).  Read the instructions first!  Be detailed!  Answer "NO" to the question about political activity!  For help understanding the "public support" requirements, read "Remember Your Fractions."  NOTE:  the form "linked" on this page is the current form revised in 2006.  Earlier versions are not accepted.
   

2. If an attorney or accountant is filing: IRS Form 2848 (Power of Attorney).
   

3. If organization is making an election under section 501(h) to have its lobbying measured by a specific set of numerical guidelines, IRS Form 5768.

4. BE SURE YOU HAVE CHECKED the list on "Office of Foreign Assets Control" to make sure your organization  includes no "specially designated nationals" or "blocked persons" who may be viewed as those who are or aid terrorists and make sure this any grant, etc. procedures address this issue.
   

Fee: $750 ($300 if expect income to be $10,000 or less annually)  Send a bank check or certified check to speed up handling.

Timing: usually must be filed within 15 months (in some cases, 27 months) of incorporation in order for tax exemption to apply retroactively to incorporation date. However, obtaining a determination may take 3-6 months.  Often IRS will acknowledge receipt and promise to respond in 100 days.  At that point, may send a request for further information requiring response within a short period of time.  If reply is not received, IRS may inactivate request.  Application may be reactivated if requested within 90 days.

Step 7. REGISTER WITH CT DEPARTMENT OF REVENUE SERVICES.

Form: REG-1, application for tax registration number. (You may be able to register on-line -- but you will have to send the IRS letter separately so the old way may be just as good.)  Phone number and social security numbers of 3 officers required. Must attach IRS letter (or explain that it is pending, and then follow up later with the IRS letter.)

Fee: None, unless likely to engage in sales.

Timing issues: none.

Step 8. Other tax exemptions (e.g., property tax) may be applied for.  See the DRS page.  Sales tax exemption requires only the use of the exemption letter and  Form CERT-119 provided payment is made by the organization's check or credit card.

STEP 9.  RESPOND TO IRS AT END OF "ADVANCE RULING PERIOD."  If exemption was granted during an "advance ruling period," organization will have to file IRS Form 8734 within 90 days of the end of its fifth fiscal year to ensure that it is not re-classified as a "private foundation."  The form requires you to list the sources of your support so that you qualify as  "publicly supported."  This gets confusing, so read "Remember Your Fractions."  If you "fail" the test, the 501(c)(3) exemption is unaffected, but status as a private foundation may cause additional filing requirements and the imposition of an excise tax on net investment income, plus a $20 / day fine for failure to file the informational return required of private foundations, Form 990-PF.  Therefore, it is very important to follow up.  (It is also important to watch your support sources during the previous years.)

STEP 10.  KEEP IN GOOD STANDING AND RETAIN EXEMPTION. See the accompanying COMPLIANCE LIST.

Need help? If you are unable to afford an attorney (fees usually run $2,000 to $5,000+) you may be eligible for assistance from Yale Law School students at the Yale Law School Nonprofit Organization Law Clinic.  Contact Professor John Simon and explain your situation.  If you are an arts organization, you may also contact CT Volunteer Lawyers for the Arts.  Finally, you may be able to obtain help from an accountant volunteer with Community Accounting Aid & Services, Inc. (sponsored by the CT Society of Certified Public Accountants).