How to Start a Nonprofit in Massachusetts
To start a 501(c)(3) nonprofit corporation in Massachusetts you must:
Step 1: Name Your Massachusetts Nonprofit
Step 2: Choose Your Registered Agent
Step 3: Select Your Board Members & Officers
Step 4: Adopt Bylaws & Conflict of Interest Policy
Step 5: File the Articles of Organization
Step 6: Get an EIN
Step 7: Apply for 501(c)(3)
Or, simply use a professional service:
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Starting a nonprofit in Massachusetts is easy
Most nonprofits formed for religious, charitable, scientific, literary, or educational purposes, are eligible for federal and state tax exemptions under 501(c)(3) laws. To start a tax-exempt nonprofit organization, you must first start a nonprofit according to the rules of the state, and then apply for 501(c)(3) status with the IRS. To start your tax exempt 501(c)(3) nonprofit organization, follow these steps:
Step 1: Name Your Massachusetts Nonprofit
Choosing a name for your organization is the first and most important step in starting your nonprofit corporation. Be sure to choose a name that complies with Massachusetts naming requirements and is easily searchable by potential members and donors.
To learn more, read our How to Name a Nonprofit in Massachusetts guide.
1. Follow the naming guidelines:
Unless your organization is a church or a religious institution, the name of your organization must indicate that it is a corporation.
You can read the official guidelines for the complete rules on naming your organization in Massachusetts.
2. Is the name available in Massachusetts? Make sure the name you want isn't already taken by doing a name search on the State of Massachusetts website.
3. Is the URL available? We recommend that you check to see if your business name is available as a web domain. Even if you don't plan to make a business website today, you may want to buy the URL in order to prevent others from acquiring it.
After registering a domain name, consider setting up a professional email account (@yourcompany.com). Google's G Suite offers a business email service that comes with other useful tools, including word processing, spreadsheets, and more. Try it for free
Not sure what to name your business? Check out our Business Name Generator. Then, create a logo with our free Logo Generator.
Step 2: Choose a Registered Agent in Massachusetts
Your nonprofit is required to nominate a Massachusetts registered agent for your organization.
What is a Registered Agent? A registered agent is an individual or business entity responsible for receiving important legal documents on behalf of your business. Think of your registered agent as your business' point of contact with the state.
Who can be a Registered Agent? A registered agent must be a resident of Massachusetts or a corporation, such as a registered agent service, authorized to transact business in Massachusetts. You may elect an individual within the company including yourself.
Step 3: Select your Directors & Officers
The directors of an organization come together to form a board of directors. This board of directors is responsible for overseeing the operations of the nonprofit.
The president, secretary, and other members of nonprofit who have individual responsibilities and authorities are known as officers.
The organization structure of your nonprofit in Massachusetts MUST include:
- At least 3 directors not related to each other
- A president (who must also be a director)
- A treasurer
- A clerk
To learn more about electing a Massachusetts nonprofit board of directors, read our full guide.
Step 4: Adopt Bylaws & Conflict of Interest Policy
To be eligible to apply for 501(c)(3) status, your nonprofit is required to have the following two documents:
- Bylaws
- Conflict of interest policy.
What are Bylaws? Bylaws are the rules outlining the operating procedures of the nonprofit.
What is a Conflict of Interest Policy? A Conflict of Interest Policy is the collection of rules put in place to ensure that any decisions made by the board of directors or the officers benefits the nonprofit and not individual members.
NOTE: The bylaws and conflict of interest policy must be adopted by the nonprofit during its first organizational meeting where the directors and officers are officially appointed.
Step 5: File the Massachusetts Articles of Organization
To register your nonprofit, you will need to file Articles of Organization with the State of Massachusetts.
To ensure that your nonprofit is eligible to apply for 501(c)(3) status, in the Articles of Organization you must explicitly state the following:
1. Purpose:
In order to qualify for 501(c)(3) status, the organization’s purpose must explicitly be limited to one or more of the following:
Charitable, Religious, Scientific, Educational, Literary, Fostering national/international amateur sports competition, Preventing cruelty to animals/children, testing for public safety
2. Dissolution:
You must explicitly state what the assets of the organization will be used for, and what will happen to the assets if the organization is dissolved.
To be eligible for 501(c)(3) status, the assets of your organization must only ever be used for purposes approved under section 501(c)(3).
Section 5 of this sample IRS document provides an example of these provisions required for 501(c)(3) eligibility.
Option 1: File online with the Commonwealth of Massachusetts.
- OR -
Option 2: File by mail.
State Filing Cost: $40 online, $35 by mail.
Mail to:
Secretary of State
Corporations Division
Commonwealth of Massachusetts
One Ashburton Place, 17th Floor
Boston, MA 02108
To learn more, read our Massachusetts Articles of Organization guide.
Step 6: Get an EIN
What is an EIN? The Employer Identification Number (EIN), or Federal Tax Identification Number, is used to identify a business entity such as your nonprofit corporation. It is essentially a social security number for your organization.
Why do I need an EIN? An EIN is required for the following:
- To open a business bank account for the company
- For Federal and State tax purposes
- To hire employees for the company
How do I get an EIN? An EIN is obtained from the IRS (free of charge) by the business owner after forming the company. This can be done online or by mail. Check out our EIN Lookup guide for more information.
Step 7: Apply for 501(c)(3) Status
Before a nonprofit can apply for 501(c)(3) status it must,
- Elect at least 3 directors not related to each other
- File the Articles of Organization with the required provisions (As covered in Step 5)
- Adopt the bylaws and conflict of interest policy
- Have an EIN number
Once these four conditions have been met your nonprofit can apply for 501(c)(3) tax-exempt status by filing Form-1023 online.
If your application is approved, the IRS will send you a determination letter stating that your organization is exempt from federal taxes under section 501(c)(3).
FAQ: Starting Your Nonprofit
When should an organization apply for federal tax exemption?
Form 1023 must be filed within 27 months from the end of the first month your organization was created.
How long will it take for the IRS to process Form 1023/1023-EZ?
Soon after sending your application you should receive an acknowledgment of receipt of your application.
If your application is simple and complete, IRS will send your determination letter within 180 days for Form 1023
If you have not heard from them by that time you can call (877) 829-5500 to inquire about your application.
Get Professional Help to Form Your Nonprofit
Find out which nonprofit formation service is the best for you in our review on Startup Savant.
Protect Your Business & Personal Assets
Business Banking
1. Opening a business bank account:
- Separates your personal assets from your company's assets, which is necessary for personal asset protection.
- Makes accounting and tax filing easier.
To open a bank account for your nonprofit corporation you will typically need the following:
- The EIN for the nonprofit
- A copy of the nonprofit’s bylaws
- A copy of the Articles of Organization
Read our Best Small Business Banks review to find the right bank for your nonprofit’s needs.
2. Getting a business credit card:
- Helps you separate personal and business expenses.
- Builds your company's credit history, which can be useful to raise capital later on.
3. Hiring a business accountant:
- Prevents your business from overpaying on taxes while helping you avoid penalties, fines, and other costly tax errors
- Makes bookkeeping and payroll easier, leaving you with more time to focus on your growing business
- Helps effectively manage your business funding and discover areas of unforeseen loss or extra profit
For more business accounting tools, read our guide to the best business accounting software.
sRecommended: Find out how much you could be saving today by scheduling a consultation with a business accountant.
Get Insurance
Business insurance helps you manage risks and focus on growing your business.
The most common types of business insurance are:
- General Liability Insurance: A broad insurance policy that protects your business from lawsuits. Most small businesses get general liability insurance.
- Professional Liability Insurance: A business insurance for professional service providers (consultants, accountants, etc.) that covers against claims of malpractice and other business errors.
- Workers' Compensation Insurance: A type of insurance that provides coverage for employees’ job-related illnesses, injuries, or deaths.
Recommended: Inform your employees about their rights and stay compliant by posting labor law posters in your workplace.
Properly Sign Legal Documents
Improperly signing a document as yourself and not as a representative of the business can leave you open to personal liability.
When signing legal documents on behalf of your nonprofit, you could follow this formula to avoid problems:
- Formal name of your organization
- Your signature
- Your name
- Your position in the business as its authorized representative
See the image below for an example:
This ensures that you are signing on behalf of your nonprofit and not as yourself.