Incorporate your organization

This post is part of a series designed to help you register a high-impact startup. Here, we focus on incorporation in the US, although similar processes are common in other jurisdictions.

Do you need to incorporate?

Incorporation is the legal process by which an organization is formed as a separate legal entity from its owners. Whether or not your organization needs incorporating depends on the legal structure you’ve chosen (see Choose a business structure for more information).

Requirements

In order to incorporate your organization, you’ll need to have the following in place:

• Organization name: See Choose a name.
• Entity legal structure: See Choose a business structure.
• Charitable purpose (if incorporating a charity): If filing as a 501(c)(3) nonprofit or a charity, you’ll need a “charitable purpose” from the IRS’s pre-defined list:
  • relief of the poor, the distressed, or the underprivileged;
  • advancement of religion;
  • advancement of education or science;
  • erection or maintenance of public buildings, monuments, or works;
  • lessening the burdens of government;
  • lessening neighborhood tensions;
  • eliminating prejudice and discrimination;
  • defending human and civil rights secured by law; or
  • combating community deterioration and juvenile delinquency.

  We’ll share more information on nonprofit types and purposes in a future post on tax exemption.

• Registered agent: A registered agent is the primary person who will be receiving documents for your organization. You’ll need to provide a mailing address for them, as some notices must be mailed or delivered in person by law. A registered agent can be an employee or a board member; there are also businesses who provide registered agent services.
• Governing documents: These may include bylaws (for a nonprofit) or Articles of Incorporation (for a for-profit corporation). See Create governing documents for more information.
• Board of directors: See Build a board of directors.
• First board meeting: Your organiation should have at least one annual board meeting during the year and should cover the following items:
  • Election, addition, or removal of directors or board members.
    • Most US regions require at least three board members to remain compliant.
    • US states do not require board members to be residents of the state or US citizens.
    • Board members should evaluate its overall structure: Are there enough board members? Does the board have the right board members? Should change be made to the registered agent?
  • Review of the executive director (performance, duties, compensation).
  • Review of the nonprofit’s financials.
    • This includes the year’s financials and future planned budget.
  • Review of the nonprofit’s activities and programs.
    • Any big plans or changes.
    • Any potential risks to the organization and plans to mitigate.
  • Updates or changes to the bylaws.

Application process

In order to complete the incorporation process, we recommend using a specialist, like Harbor Compliance or Clerky. Harbor Compliance can quickly prepare and submit the required filings to form a corporation in any state — you just need to provide the elements listed above.

Stay tuned for our next post: Obtain your EIN.