Potential Kentucky business owners will all have to consider the question of what type of corporation to start. There are a lot of options, and one of the more unique ones is a nonprofit business. A nonprofit is a good idea for someone who wants to benefit the community and help others. The steps that are required to start a nonprofit are different than with other types of corporations. By understanding the state-specific requirements of Kentucky, people can be more successful at starting their own nonprofits.
Choosing a unique name
The first step to designing the name for a nonprofit corporation is to make sure that it ends with an abbreviation suitable for a corporation. This can be either “Corp.”, “Inc.”, “Co.” or “Ltd.”. By searching for names with the Kentucky Secretary of State, entrepreneurs can make sure that they are not infringing on the copyright of another name that is already in use. When done with this, it is usually a good idea to move on to the recruiting phase.
Other basic steps
After recruiting those who would be best at running the corporation, it is worthwhile to hold a meeting with the board of directors. There, state tax identification numbers and potential tax exemptions can be explored. This is also a good time to work on internal policy and to devise a plan for record-keeping, even though these are not technically legal requirements. Another necessary step is the assignment of an Employer Identification Number, which can be worked out with the IRS. The corporation will not be fully set up, however, until the official articles of incorporation are filed with the Secretary of State.
Special policies and procedures
Every nonprofit corporation needs a set of bylaws that work in accordance with the articles of incorporation. These should include a conflict of interest policy, which will govern what is to be done if such a conflict occurs. Those who are seeking further assistance with such matters as accounting or local and state-level compliance can get some helpful information though the Kentucky Nonprofit Network. This can help to avoid contradictions or loopholes in the bylaws.
The last point of note is less official but is an important part of any nonprofit. Business owners should consider if the role their nonprofits will play will fill a niche in the community. The last requirement is, of course, a surplus of time and money. If there is not enough money to invest in the beginning, a nonprofit may fail. Those who are taking the steps to begin their nonprofit businesses may find it helpful to consult an attorney in the local area who practices business law.