Our Step By Step Guide

How to form a nonprofit corporation in Minnesota

Forming a nonprofit corporation provides liability protection for any type of business, and should be among the first steps you take as a new business owner. Starting a nonprofit corporation can help you protect your personal assets while adding legitimacy to your company. Follow our step by step guide or let us handle the paperwork on your behalf, ensuring your business is filed quickly and accurately.

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Why start your business in Minnesota?

The Minnesota Council of Nonprofits studies nonprofit trends and conducts research on cultural nonprofits. This allows the council to understand the state's nonprofit sector and put out reports about Minnesota's nonprofit corporation presence. The 2019 Minnesota Nonprofit Economy Report revealed there was a total of 27,913 501(c)(3)s in the state. 9,190 establishments have at least one paid employee.

Most noteworthy were the number of nonprofit corporation filings in 2019. There were 2,414 new Minnesota nonprofit corporate filings that year ' and it's exciting to think that more nonprofit corporations will continue to be filed in the years to come! Setting up a Minnesota nonprofit corporation may be the next, best step for your business. Let's look at the steps necessary to get started.

Two Ways to Register Your Business

MyCorporation® can help you file all of the necessary documents to form your nonprofit corporation in Minnesota.

File and submit the formation paperwork yourself

Our free guide provides you with all of the information you'll need to form your nonprofit corporation in Minnesota. Bookmark this page as a reference so you can return easily as you complete each step of the process.

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See other business types

Are you looking for another entity type? We offer several other guides for the state of Minnesota.

A nonprofit corporation is a business formed with the purpose of furthering a particular social cause or advocating for a specific point of view. Rather than earning a profit, a nonprofit corporation reinvests its revenue to achieve its objective instead of distributing that income to its shareholders.

Nonprofit corporations, at their core, are a variation of a traditional C corporation formed to provide public benefit. While much of the structure and set-up process is similar between the two entities, setting up a nonprofit properly has a few additional caveats to be aware of including applying for federal and state tax exemptions.

Nonprofits are most popularly known for being tax exempt. This means they do not pay income tax on the money they receive on their income. If your business plans to operate only for scientific, research, educational, religious, or charitable reasons, a nonprofit would be your best entity fit.

The Benefits of a Non Profit Corporation

  • Protect your Personal Assets
    Starting a nonprofit corporation designates your business as a separate legal entity, preventing you from being personally responsible for any debts accrued by your business.
  • Build Credibility
    Establishing a professional identity for your nonprofit demonstrates the charitable intentions of your business to the community, providing additional credibility and trust.
  • Tax Advantages
    Non profit corporation owners can apply for tax exemption under certain circumstances, allowing more money to go towards the charitable cause your business was created for.

Compare the main entity types below

Entity Type
Liability
Taxation
Maintenance
Limited Liability Company Combines limited liability protection with a pass-through tax structure. IRS rules allow LLCs to choose between being taxed as partnership or corporation. The easiest entity to maintain with the least amount of formal annual requirements.
Corporation Owners / shareholders have limited personal liability for business related debts. Separate taxable entity, corporate profits among owners and corporation. Meetings are required to maintain corporate status. Stock may be sold to raise capital.
Non-Profit Corporation A corporation formed for a charitable, educational, religious, literary, or scientic purpose. Contributions to charitable corporation are tax-deductible. Can get tax exempt status with the IRS. Annual reports, minutes, meetings are required to maintain nonprofit / tax exempt status.
Tip: Try our free entity choice tool. Answer a few simple multiple choice questions about your business, and our tool can recommend the entity type that best fits the needs of your business.

Now that you have decided to start a nonprofit, you need to determine the charitable mission and purpose for the business. In order to comply with IRS regulations, it's important that your business is organized for an exempt purpose. For example, your business may not engage in political activities and must not overcompensate its members. Remember that in order to attain federal tax exemption as a charitable organization, your nonprofit corporation must also have a required purpose clause and a dissolution of assets provision.

The next step will be to decide on a name for your business. Choose a name that is memorable and unique, easy to understand and pronounce, and accurately represents your nonprofit organization. You'll want to search your name choices online to quickly find out if they are already taken. It's also best to jot down one or two alternatives, in case the name you settle on is not available for registration in Minnesota.

There are a few rules that Minnesota Nonprofit Corporations must follow in order to register a name. The name you choose must be unique and not “confusingly similar” to the name of any other Minnesota business. This is to prevent fraud or misrepresentation and is a common rule in all 50 states. You can find out whether a name is available in Minnesota by using their business name availability search tool. Enter a business name to begin your search and see if there are any possible conflicts. Be sure to check variations or alternate spellings as well, otherwise your filing may be rejected. In a pinch, you can use MyCorporation’s business name search service, where we will conduct a more thorough search on your behalf and report back our findings. Plus, MyCorporation includes a business name search for free when we complete your LLC filings on your behalf!

Tip: A business name check is included with every one of our business formation packages. We check with the state to determine the availability of your business name automatically. You can also conduct a nationwide business name search here.

Most states require that you designate a registered agent for your business, and Minnesota is no exception. A registered agent (often abbreviated as RA) acts as the state's means to communicate with a business. An RA is responsible for receiving legal and official documents related to the business. This may be an individual or third party service that agrees to accept legal papers on the corporation's behalf. A corporation may not act as its own registered agent for service of process.

In the state of Minnesota, it is required that all business entities filed in the state maintain a registered agent. This registered agent may be an individual or entity that receives official and legal documents on behalf of the business. They must be a Minnesota resident, have a Minnesota street address, and be available at the given address during normal business hours to accept service of process. A P.O. Box is not accepted as a registered agent address. A member of the nonprofit corporation can act as the registered agent if desired, or you may also use a third-party registered agent service like MyCorporation.

Registered agent information is publicly available. This may cause privacy concerns for business owners who do not wish to list their personal contact information for everyone to see. It is also common for the registered agent to become a target of spam or robocalls since this private information is relatively easy to obtain. Registered agents are highly valued for their discretion. For example, if you did not have a registered agent and your business was served with lawsuit paperwork the documents would be delivered directly to your business address. This could be incredibly embarrassing for the business owner, especially if this happened in front of customers. An RA will accept the documents privately to ensure additional privacy, organize the materials, and then deliver them to the business owner. This is why many business owners opt for a third-party registered agent service like MyCorporation to act as a registered agent on behalf of their business.

Another issue that may arise is that in the case of a lawsuit, these documents would be hand delivered directly to the registered agent. In the case that you used your business location for this purpose, this could occur in front of your customers. This is why many business owners opt for a third-party registered agent service such as MyCorporation to act as a registered agent on behalf of their business.

Tip: Our Deluxe and Premium formation packages include a full year of registered agent services for your business. We also offer standalone registered agent services which you can add to your business later.

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The state of Minnesota requires you to file Articles of Incorporation for a MN Nonprofit Corporation to form a nonprofit corporation. This document includes basic information about the Minnesota nonprofit corporation such as:

  • Name of the corporation
  • Registered office and agent
  • Incorporators including incorporator’s name, street address, signature, and date
  • Email address for official notices
  • Name and daytime phone number of the person who can be contacted about this form
  • Completion of “Minnesota Business Snapshot” survey

A filing fee of $70 is required for Articles of Incorporation for a MN Nonprofit Corporation submitted by mail. The fee for expedited service is $90. These fees must be made payable to the MN Secretary of State.

Bylaws are the detailed set of rules agreed upon and adopted by the board of directors of the nonprofit. Think of these as an instruction manual to run the business. They include rules and procedures related to meetings you will hold, and notes on the ways you will elect officers and directors of the business.

While a nonprofit corporation is not legally required to create bylaws in Minnesota, it is highly recommended. Bylaws help maintain consistency in the way your business operates, as well as communicate organizational rules that help avoid conflicts and disputes. Bylaws are for your records only and are not submitted to the state.

If you are not sure how to create corporate bylaws, you can purchase MyCorporation's customized Minutes and Bylaws package. Inside our package you will find internal documents required to fulfill your corporate formalities and properly operate your business after it has been incorporated.

The first board meeting for your business is often referred to as the organizational meeting of the board. During this meeting, the initial directors of the business will adopt the corporate bylaws, set the fiscal year, and appoint corporate officers.

This meeting and all future meetings of the board of directors must be recorded in corporate minutes. Minutes are documents that detail what was discussed and any decisions the business makes during meetings. They are kept with the corporate records.

Corporate minutes are required for all Minnesota nonprofit corporations. Falling behind on this critical task can cause your business to fall out of good standing, and even jeopardize its tax-exempt status. It is important to maintain a corporate minute book. Inside you may keep originals or copies of all the signed and approved minutes or Actions by Unanimous Consent from any special or annual meetings of the corporation's shareholders and directors.

An EIN (also referred to as a Federal Tax ID) is a nine-digit number that is issued by the IRS and used to uniquely identify your business for tax purposes. Think of it as a Social Security Number (SSN) for your business, except an EIN is less sensitive. Like an SSN, an EIN allows you to:

  • Open business checking, savings, or investment accounts
  • File taxes for the business
  • Complete payroll for employees if applicable
  • Obtain lines of credit and credit cards, and build credit for your business
  • Apply for applicable business licenses when required
  • File for tax exempt status

You will only need a few pieces of information to file, including your mailing address and legal business name. You can apply online with the IRS by downloading IRS Form SS-4, or work alongside a third party organization like MyCorporation to complete an EIN application.

Tip: If a Minnesota nonprofit corporation pays more than $100 in wages to employees each calendar quarter, you'll need to obtain a State Employer Identification Number, or SEIN. In order to do this, you will need to register with the Minnesota Employment Development Department (EDD).

Your nonprofit corporation is not automatically tax exempt. In order to become tax exempt, you will need to take certain steps to obtain this status. First, you will need to file for exempt status with the Internal Revenue Service using either Form 1023 or Form 1024, depending on the classification of your organization. In some cases, you may be eligible to file Form 1023-EZ, a streamlined version of the application for recognition of tax exemption. You can avoid a $25 fee if you file for federal tax exemption before filing with the state.

Even if you have obtained federal exemption for your organization, you still need to submit an Exempt Application form (FTB 3500) to the Franchise Tax Board to obtain state level exemption. Although most of Minnesota's laws dealing with tax exemption are like those found in the Internal Revenue Code, obtaining state exemption is a separate process from obtaining federal exemption.

You can learn more about the process directly from Publication 557 from the IRS.

It is advised that your nonprofit corporation checks in with the Minnesota Secretary of State for this section. The state will further detail if your nonprofit corporation needs a solicitation permit and the charitable solicitation laws set throughout the United States.

It is advised that you visit the Minnesota Secretary of State to determine which business licenses and permits may be required for your specific business. Then, apply for the relevant business licenses or renew an existing license.

In the event that you need a bit of help, you may also turn to MyCorporation's business license compliance package. Our skilled professionals will do the work for you. We identify all licenses required by your business and provide you with the information you need in order to file.

nonprofit corporation Formation Packages

Save money and simplify the process of starting your business by bundling the services you need with our business formation packages.

BASICS
$99
  • Articles of
  • Name Availability Search
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STANDARD
$124
  • Articles of
  • Name Availability Search
  • Annual Report service
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DELUXE
$224
  • Articles of
  • Name Availability Search
  • Annual Report service
  • Registered Agent services
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Frequently asked questions

According to the Minnesota Secretary of State, nonprofit corporation processing times run typically 4-7 business days if you file through mail. Online filings are approved usually within the same day or next day. All orders are processed in the order they are received.

In order to keep your nonprofit in good standing, there are reoccurring requirements that must be met.

  • All nonprofits must file a Statement of Information with the Secretary of State every two years.
  • All nonprofits must hold an annual meeting of the directors logged in their corporate minutes.
  • All nonprofits (except schools, hospitals, and religious organizations) need to file the annual registration renewal fee report. The fee for the report may vary, so check in with the Georgia Secretary of State for further guidelines.

In order to form a nonprofit corporation in Minnesota, you will be required to pay various fees for services. The breakdown of the required fees for a nonprofit corporation are as follows:

Nonprofit corporation filing application fee — $70 ($90 for expedited service)

Annual Renewal Fee — $25 (if submitted by mail), $45 (expedited services)

In total, expect to set aside at least $95-$135 to form an LLC in Minnesota.

Nonprofit corporations organized in other states can foreign qualify to conduct business in Georgia. These entities must file with the Corporations Division in Georgia.