Nonprofit Checklist

NONPROFIT CHECKLIST

COMMUNITY ECONOMIC DEVELOPMENT

MICROENTERPRISE PROGRAM

LEGAL SERVICES OF

EASTERN MISSOURI

W H A T I S A N O N P R O F I T ?

A nonprofit is an organization that uses its funds for a public purpose. A nonprofit may not use its

funds to financially benefit its members. Nonprofits are founded to serve a public humanitarian or

environmental need. The nonprofit’s resources are used in support of programs designed to help

fulfill the goals an purpose of the organization. The founder and board members cannot

personally benefit from the organization. Nonprofits are controlled by a board of directors and

must be transparent as it is a public charity. The checklist will cover the following:

Before You Form a Nonprofit

Incorporation

Tax Identification Numbers

Bylaws

Next Steps

B E F O R E Y O U F O R M A

N O N P R O F I T

An executive summary

A description of the services, programs, or products being offered

A summary of the business history, management/structure, and goals

A profile of the Nonprofit’s Mission

A need assessment and plan for meeting those needs.

Strategies for advertising and marketing

A list of assets, liabilities, budgets, and timelines

A forecast of fundraising

Small Business Administration: https://www.sba.gov/business-guide/plan-your-

business/write-your-business-plan

SCORE: https://www.score.org/getstarted https://www.score.org/resource/business-

plan-template-startup-business

Business plans are not a legal requirement. However, the goals of the nonprofit

should clear before beginning any significant work. A written business plan helps you

share your nonprofit goals with people who might want to support it. Usually these

people are lenders, donors, suppliers, management, employees, and professionals

(i.e. lawyers). Business plans should include the following information:

The following agencies can help draft business plans:

DEVELOP A BUSINESS PLAN

A mission statement

An outline of goals, objectives, and activities

An assessment of current resources, and

A strategic analysis.

A strategic plan takes the information provided in the business plan and explains

how the desired outcomes will be achieved. A strategic plans should include:

For a guide on strategic planning, visit https://www.wanonprofitinstitute.org/planning/

DEVELOP A STRATEGIC PLAN

B E F O R E Y O U F O R M A

N O N P R O F I T

In Missouri, nonprofits are required to have a minimum of 3 board members. The

recommended number of board members is 5 to 7. There is no limit to the number of

board members. However, keeping the number small, under 10, would be best. Board

members should be unrelated individuals.

RECRUIT A BOARD OF DIRECTORS

In Missouri, nonprofits are required to have at a president, a treasurer, and a

secretary.

These individuals can also be board members.

RECRUIT OFFICERS

Visit the Missouri Secretary of State’s website and choose “search for a business” to

see if anyone has already registered your business name,

If your business name is available, you can reserve it for up to 60. You can reserve

the name again for another 60 days up to a maximum of 180 days. Fill out the

following application and send it to the Secretary of State’s office to reserve your

name: http://s1.sos.mo.gov/CMSImages/Business/be1.pdf.

If you are ready to register your nonprofit, you can opt to do that instead of reserving

a name. If you still have steps to prepare, reserving a name might be a good option

for your future nonprofit.

CHOOSE A BUSINESS NAME

A R T I C L E S O F I N C O R P O R A T I O N

Classification. The Articles of Incorporation must state whether the company is a public benefit

corporation or a mutual benefit corporation. Public benefit corporations are the only option for tax

exempt status.

Duration. A nonprofit can be organized for period of time or forever.

Registered Agent. The person who will receive important legal documents for the nonprofit.

Dissolution. In case the business closes you must provide a plan to give the nonprofit property to

another 501(c)(3) nonprofit if want to be tax-exempt.

Purpose. The nonprofit must have an allowed purpose tax-exempt status.

Income. A nonprofit cannot give any part of its income to the members, directors, officers, or a

private person.

Legislative or Political Activities. Nonprofits activities cannot involve lobbying efforts and are

forbidden from helping political campaigns.

Articles of Incorporation creates your nonprofit corporation and registers it with the State of Missouri.

Work with an experienced attorney when you file your Articles of Incorporation. Some important

requirements for nonprofit Articles of Incorporation:

INCORPORATION

A P P L I C A T I O N

In-person or by mail costs $25 and should be sent to the address on the form.

http://s1.sos.mo.gov/CMSImages/Business/corp52.pdf

Electronic applications cost $25 and on the Missouri Secretary of State’s website.

https://bsd.sos.mo.gov/

You can apply by submitting the form in-person, by mail, or electronically.

O B T A I N A F E D E R A L E M P L O Y E R I D E N T I F I C A T I O N N U M B E R

This is the federal tax identification number that will be linked with your business. The Federal

Employer Identification Number (EIN) is used when you file your taxes. You obtain this number after

you incorporate your business.

This is a free service provided by the IRS. Please do not pay anyone to obtain this for you! You can

apply online at: https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-

employer-identification-number-ein-online

TAX IDENTIFICATION NUMBERS

O B T A I N A M I S S O U R I E M P L O Y E R T A X I D E N T I F I C A T I O N

N U M B E R

This is the Missouri state tax identification number that will be linked with your business. This is not

required for all businesses but is for many. Use the questionnaire on the Missouri Department of

Revenue website to determine your requirements.

You can apply for free at: https://dor.mo.gov/register-business/

O B T A I N A F E D E R A L E M P L O Y E R I D E N T I F I C A T I O N N U M B E R

Purposes

Membership

Board of Directors

Officers

Finances

Document Retention Policies

Insurance

Conflicts of Interest

Amendments

Bylaws are the rules for the organization. Bylaws for a nonprofit cover many topics including:

You should ask a lawyer to help write the Bylaws.

BYLAWS

N E X T S T E P S

Nonprofits organized and run solely for religious, charitable, scientific, public

safety testing, literacy, amateur sports, or educational purposes can get

501(c)(3) status. You should work with an experienced lawyer to file for 501(c)

(3) tax-exempt status. Please request the Types of Nonprofit 501(c)

Organizations Checklist for additional information on receiving 501(c)(3)

designation.

501(C)(3) STATUS

Ask a lawyer to see if you need a state, county or city business license.

GET A BUSINESS LICENSE

Open a bank account for the nonprofit. If you mix your own money with

that of the nonprofit’s, you can be personally responsible.

Get commercial insurance.

Use “(nonprofit name)” on all marketing materials.

Only do business as the nonprofit.

Sign the nonprofit’s name on all contracts. Example of how to sign the

LLC’s name on a contract:

There are many forms of protection for nonprofits, including:

ABC Nonprofit

(Signature)

John Doe, President of ABC Nonprofit

Month, Day, Year

PROTECT YOURSELF

Make sure you are operating your nonprofit according to the law. Check to see

if there are zoning restrictions where your business is.

REGULATORY REQUIREMENTS

N E X T S T E P S

There is less room for misunderstanding.

Expectations are clear.

Promises are taken more seriously when put in writing.

A contract is a written or spoken exchange of promises to do or not do

something. Having contracts in writing protects your nonprofit.

Spoken promises can be enforced. But, it is harder to show that a party

promised to do something and then failed to do, since nothing was written

down. Make sure you understand the contract before you sign. Sign the

agreement in the name of the nonprofit, not your own name.

CONTRACTS

Base Rent: will it be $X/month, $X/sq. foot, % gross sales?

Who pays for utilities, property taxes, maintenance, and/or improvements?

Usually the landlord is responsible for structural repairs and Tenant for

non-structural.

Who is responsible for things like snow and ice removal?

What about repairs of expensive items like an HVAC system?

It is important to read commercial leases carefully. Consult with a lawyer if

you can. Know what your responsibilities will be under the terms of the lease:

You should get insurance including general liability and casualty to protect

people and property.

If there are pre-existing problems, you may consider having the landlord state

that there are no pre-existing environmental problems in the lease (e.g.,

asbestos, hazardous substances).

Landlords sometimes ask for a personal guarantee from the owner of a

business in a commercial lease. Try to remove this clause.

Look out for confusing language in the lease and make sure you understand all

terms before signing.

COMMERCIAL LEASES

N E X T S T E P S

Ask if you will hire employees or independent contractors. The main difference

between an employee and an independent contractor is: who has the right to

control when, where, and how work is completed? If you, the employer, want

to be able to control when, where, and how work is to be completed, you will

need to make your workers as employees.

After deciding whether you will hire employees or independent contractors,

ask a lawyer for help understanding the laws for both types and for help filing

the right paperwork.

Note: Missouri employees are at-will. This means that you can fire them or

they can quit without cause, unless it is for a discriminatory reason.

EMPLOYEES

Trademarks

Trade Secrets

Patents

Intellectual Property refers to ways to protect your ideas. Some protections

include:

For more information, please ask to see the Intellectual Property Checklist.

For nonprofits, intellectual property is often an issue for websites. To help

protect yourself, get a written contract with the host of the website. Get an

assignment agreement if someone else makes your website or material for it

or work with an attorney for a work-for-hire agreement before contracting

website services. Use your own pictures and material on the website when

possible. Otherwise, get written permission from the author or creator of the

materials.

INTELLECTUAL PROPERTY

LEGAL SERVICES OF

EASTERN MISSOURI

Disclaimer:

Legal Services of Eastern Missouri's Community Economic

Development Microenterprise Program made this guide to educate

on Microenterprise-related legal topics. This guide is for general

information purposes only. While we try to make it as accurate and

up-to-date as possible, guidance can and will change. Your own

situation may be fact-specific and we can only give legal advice to

those we have current representation agreements with. Nothing in

this guide constitutes legal advice from Legal Services of Eastern

Missouri.

If you have any questions, please speak to a lawyer. This guide is not

an advertisement or solicitation.

C O M M U N I T Y E C O N O M I C

D E V E L O P M E N T -

M I C R O E N T E R P R I S E P R O G R A M

https://lsem.org/community-economic-development-program/

[email protected]

Fees Disclaimer: Costs of fillings listed in this guide are subject to change.

Please check with the State of Missouri for most up-to-date filing costs.