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Forming a 501(c)(3) Corporation

When you’re starting a nonprofit, business organization can be tricky. You’ll need to ensure that you follow the requirements of both your state and the IRS to ensure that your organization qualifies for nonprofit status under both state and federal tax laws. That’s why it’s essential to consult with an attorney well-versed in nonprofit business and tax law before you get started.


What is a 501(c)(3)?

Section 501(c)(3) is a section of the U.S. tax code that provides tax-exempt status to nonprofit organizations. A 501(c)(3) can be a corporation, trust, or another type of organization, although corporations are one of the most popular business entities for these nonprofits.

Your business must be considered “charitable” to receive 501(c)(3) classification from the IRS. “Charitable” means an organization formed for a purpose that is:

  • Religious
  • Scientific
  • Educational
  • Literary
  • Testing for public safety
  • Fostering national or international amateur sports
  • Preventing cruelty to animals or children
  • Charitable

Public charities, private foundations, and private operating foundations formed for a wider variety of purposes, including helping the poor or underprivileged, supporting civil rights, and preventing urban decay, can also be considered charitable organizations.


Forming a 501(c)(3)

To form a 501(c)(3) corporation, you must first form a corporate entity in your state. The Maryland Department of Taxation and Revenue has a sample nonprofit article of incorporation that you can use to begin your nonprofit’s articles. These sample forms include language that you will need for your business to qualify for 501(c)(3) nonprofit status. To form your nonprofit, you’ll need to consult with your attorney on:

  • Naming your nonprofit
  • Forming a board
  • Writing by-laws
  • Filing state incorporation papers
  • Filing for 501(c)(3) tax-exempt status and 
  • Ensuring ongoing compliance with state and federal regulations for nonprofits.


Experienced Business and Tax Guidance

 If you’re starting a nonprofit in Maryland or Washington, D.C., you’ll need experienced legal business and tax advice to guide you along the way. Attorney Beverly Winstead is an award-winning tax attorney and law

professor with years of experience advising nonprofits and for-profit businesses. The skilled attorneys at The Law Offices of Beverly Winstead offer the professional legal guidance you and your business need. Give us a call at 301-306-1234 or contact us online to schedule your consultation.


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