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How to Start Your ArkansasNonprofit Guide

How to Start a Nonprofit in Arkansas


Welcome to our Arkansas nonprofit resource guide! This free guide will help you understand how to start your nonprofit in Arkansas and become 501(c)(3) tax exempt. You will find step-by-step instructions and get answers to common questions like "what does it cost?" and "how many board members do I need?".

If you're starting out with little or no funds, gaining professional assistance is rarely an option. In that case, you may want to commit to researching the process and filing government applications on your own. This route is not for the faint of heart but is certainly achievable if you work diligently. The following step-by-step guide should help you as you undertake this process.


1 Confirm a New Nonprofit is Necessary

As you begin, take a moment to consider if you should start a new non-profit organization. According to the National Center for Charitable Statistics, there were over 14,000 nonprofit organizations in Arkansas in 2009. To decide if a new nonprofit is necessary...

  • Research if an organization already exists in your area that serves your cause. By working together you avoid diluting the effect of fundraising dollars and volunteer hours available in your geography.
  • Consider fiscal sponsorship, in which an umbrella 501(c) organization incubates your charitable nonprofit. Fiscal sponsors permit your cause to receive tax-deductible donations and often handle administrative paperwork.
2 Understand the Benefits of Incorporating

This guide focuses on starting a nonprofit corporation, the traditional nonprofit legal structure. This legal structure has a few key benefits. First and foremost, the nonprofit corporation limits the liability of the organization's officers and directors. Second, the nonprofit corporation is familiar to donors and grant makers. Lastly, nonprofit corporations meet a wide range of IRS eligibility requirements, in particular those relating to the 501(c)(3) application.

3 Check Name Availability

The legal name of your nonprofit corporation may not conflict with any other registered name. Check availability of your desired name by conducting a name search.

Name Search:
Arkansas Search for Corporations
Name Reservation:
Optional
Suffix:
Not required. AC §4-33-401
4 Recruit Incorporators and/or Initial Directors
  • Identify the incorporators. These individuals will execute the articles of incorporation and submit them to the state. Arkansas only requires a minimum of one incorporator (AC §4-33-201).
  • Recruit initial directors for your nonprofit board of directors. In Arkansas, naming the initial directors in the articles of incorporation is optional. A minimum of three directors are required and the number of directors must be set by the articles of incorporation or bylaws (AC §4-33-803)).
  • Nonprofits often begin working with us before they incorporate and select a board. We help you understand state and IRS requirements as you select your board members.
5 Appoint a Registered Agent

Identify the nonprofit’s Arkansas registered agent. A registered agent is a legal appointee who is responsible for receiving legal notices for your nonprofit. Your registered agent must be physically located in Arkansas and maintain an office that is open during regular business hours.

We provide a convenient service to act as your Arkansas registered agent. As part of that service, our local office in Mountain Home, AR receives your legal documents and sends you notifications. You view your documents in your secure online account. Registered agent is included in our nonprofit formation service or you can sign up for this service separately.

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Fast Facts

Below is an overview of the paperwork, cost, and time to start an Arkansas nonprofit.


Paperwork
  • Form NPD-01: Articles of Incorporation - Domestic Nonprofit or Form NPD-01-501: Articles of Incorporation - Domestic Nonprofit (501(c)(3) Compliant Language)
  • Bylaws
  • IRS Form SS-4: Obtain an EIN
  • IRS Form 1023: 501(c) Tax Exempt Application
  • IRS Determination Letter
  • Form AR-1R: Combined Business Tax Registration Form
  • Form AR1023CT: Application for Income Tax Exempt Status
  • Form F0003: Streamlined Sales and Use Tax Agreement Certificate of Exemption
  • URS Charitable Registration, if applicable
  • Charitable Organization Application for Registration or the Verification of Exemption From Registr
    Cost
    • Incorporation: $45-50
    • 501(c): $400 or $850 IRS fee

    Time
    • Incorporation: ~2-4 business days
    • 501(c): 2 weeks to 3 months

Learn By Video

6 File Arkansas Nonprofit Articles of Incorporation

File articles of incorporation to create your non-profit corporation.

Agency:Arkansas Secretary of State - Business and Commercial Services Division (BCS)
Form:

Form NPD-01: Articles of Incorporation - Domestic Nonprofit or Form NPD-01-501: Articles of Incorporation - Domestic Nonprofit (501(c)(3) Compliant Language)

Filing Method:

Mail or online

State Fee:

$50 by mail or $45 online

Turnaround:

~2-4 business days by mail or online

Law:

Arkansas Code - Title 4: Business and Commercial Law - Subtitle 3: Corporations and Associations - Chapter 33: The Arkansas Nonprofit Corporation Act of 1993

Adding 501(c) provisions into your articles

The IRS requires specific language in the articles of incorporation to qualify for 501(c)(3) federal tax exemption. These provisions are not always included in state articles of incorporation templates. Refer to IRS Pub 557 for guidance and sample language.

7 Establish Organization Records

Your filed articles of incorporation is the first document for your nonprofit corporate records. Your corporation will generate many other official records such as bylaws, meeting minutes, and your EIN.

Office supplies intended for a nonprofit corporation will help you stay organized and save time. Optionally, get a nonprofit records kit.

Draft bylaws which is the governing document for the nonprofit. The bylaws may contain any provision for regulating and managing the affairs of the corporation that is not inconsistent with law or the articles of incorporation. (AC §4-33-206). You will review and ratify the bylaws at your first board of directors meeting.

The Board should create and adopt a conflict of interest policy. This document is submitted to the IRS at the time they apply for 501(c)(3) tax exemption.

8 Hold Organizational Meeting of the Directors

Hold the first meeting of the board of directors or incorporators (AC §4-33-205). At this meeting, the nonprofit should approve the bylaws, elect additional directors, appoint officers, and approve initial resolutions such as opening a company bank account. Keep minutes of this meeting.

9 Get a Federal Employer Identification Number (EIN)

Your nonprofit must obtain an EIN regardless of whether it will hire employees.

Agency:Internal Revenue Service (IRS)
Form:

IRS Form SS-4

Guidance:

IRS Pub 1635: Understanding Your EIN

Filing Method:

Mail, phone, fax, or online

IRS Fee:

$0

Turnaround:

Immediately online or by phone. 4 business days by fax. 4-5 weeks by mail.

Notes:

The IRS website is only available during certain hours. Print your EIN before closing your session.

10 Get Arkansas State Tax Identification Numbers/Accounts

Arkansas offers a consolidated state tax registration application.

Submit to:
Arkansas Department of Finance and Administration
http://www.dfa.arkansas.gov/
Form:
Form AR-1R: Combined Business Tax Registration Form
Instructions:
Instructions for Form AR-1R
Guidance:
Arkansas Starting a New Business Guide - An Educational Brochure for Arkansas Taxpayers
Filing Method:
Mail or in-person
Fee:
$0. $50 if filing for a Gross Receipt (Sales Tax) Permit.
Notes:
Apply at least 2 weeks before the taxable activity begins. Do not submit more than 60 days prior to opening date.
Harbor's responsiveness and realistic understanding gave our organization a great start.
JohnThe Alumni Society of San Sebastian
Harbor helped me understand what's needed and why, and they pointed out the details that I didn't bother to pay attention to! They took care of the whole thing.
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11 Apply for 501(c)

Applying for 501(c) tax exemption is often the most complex and time-consuming steps in setting up a nonprofit. It is also one of the most important, as obtaining a tax exemption is what is enables an organization to successfully raise funds, apply for grants, be exempt from IRS income tax, and enjoy a variety of other benefits exclusively available to nonprofits.

501(c) is the chapter of the Internal Revenue Code that regulates nonprofit organizations. Most nonprofits are 501(c)(3)s, including charities and foundations. There are a few forms used to apply for federal tax exemption. 501(c)(3) nonprofits apply using Form 1023 or Form 1023-EZ. Not all organizations however are eligible to file the streamlined Form 1023-EZ. Other types of nonprofits, including 501(c)(4)s and 501(c)(6)s, apply using Form 1024.

Seeking the help of a professional with this step is common. Choosing the right form to file is just one consideration. A great deal of expertise, time, and preparation goes into creating a successful application. The IRS estimates over 100 hours are spent on researching and preparing the application. If you're looking for professional assistance, check out our formation services to help you with your 501(c) application and the rest of the process. Our nonprofit specialists will help you from start to finish.

Agency:Internal Revenue Service (IRS)
Form:

IRS Form 1023IRS Form 1023-EZ, or IRS Form 1024

Instructions:

IRS Instructions for Form 1023IRS Instructions for Form 1023-EZ, or IRS Instructions for Form 1024.  Also see guidance IRS Pub 557: Tax-Exempt Status for Your Organization.

Filing method:

Mail

IRS Fee:

$275, $400, or $850, depending on form and annual gross receipts

Turnaround:

1023-EZ average: <1 month. 1023 average: 3-6 months.

The IRS will return a Determination Letter which officially recognized your exemption.

12 Apply for Arkansas Tax Exemption(s)

To file to obtain Corporate Income Tax Exemption:

Agency:Arkansas Department of Finance and Administration
Form:

Form AR1023CT: Application for Income Tax Exempt Status

Instructions:

Instructions for Form AR1023CT - Application for Exempt Status

Notes:

Apply by submitting a copy of the IRS Determination Letter, the first two pages of IRS Form 1023, and a statement declaring exemption under ACA 26-51-303 or ACA 26-51-309. Organizations without an IRS Determination Letter should submit Form AR1023CT, a copy of the articles of incorporation, and a copy of the bylaws.

To file to obtain Sales Tax Exemption:

Agency:Arkansas Department of Finance and Administration
Form:

SSTGB Form F0003: Exemption Certificate

Instructions:

Streamlined Sales and Use Tax Agreement Certificate of Exemption Instructions

Notes:

Do not apply with the Department of Revenue; simply provide completed exemption form to seller.

13 Register for Charitable Solicitation / Fundraising

Before soliciting donations or hiring professionals solicitors, you must register in each state where you will raise funds.

To file in Arkansas:

Agency:Arkansas Attorney General - Public Protection Department
Exemptions:

The most common exemptions are:

  1. <$25,000 contributions per calendar year
  2. Religious institutions
  3. Educational institutions
  4. Political candidates and organizations
  5. Government organizations
  6. Individuals soliciting for an exempt organization
  7. Chapters and affiliates

Check the law for the full list of exemptions and exemption criteria.

To gain recognition under an exemption, file Form EX-01: Exempt Organization Verification.

Form:

URS with Form CR-02: Charitable Organization Consent for Service, or Form CR-01: Charitable Organization Registration Form

Instructions:

Charitable Registration in Arkansas

Filing method:

Mail or email.

State Fee:

$0

Law:

Arkansas Code Ann. § 4-28-401 et seq.

Notes:
  • Note the list of attachments required.
  • One signature of officer, director, or incorporator required. Signature must be notarized.
  • Some Arkansas counties and municipalities may require charities that solicit in-person to register prior to fundraising.
Disclosures:

Yes, Arkansas requires a disclosure when communicating with donors.

Online fundraising:

Arkansas follows the Charleston Principles (Source: NACAU). Learn more about online fundraising here.

Accepts URS:Yes

To fundraise nationally or online, please see our Fundraising Compliance Guide. Our services manage your initial, renewal, and exemption filings in every state.

14 Obtain Other Business Licenses & Permits

To run your business legally, you must obtain applicable licenses and permits. The easiest way to navigate the wide range of federal, state, and local requirements is to search by your business type and locality using the Small Business Administration Business License & Permit look-up tool.

Bingo is subject to state license and tax requirements. Refer to the Arkansas Department of Finance and Administration Combined Business Tax Registration Form.

* Ongoing Filings to Maintain Your Nonprofit

Once you have registered your nonprofit per the steps listed above, you will need to maintain compliance with all of the government agencies. Staying current with the IRS and state requirements is an ongoing responsibility. Continue reading our Arkansas nonprofit compliance guide to learn more!

Tax-Exempt in 2 Weeks!

Download the case study of how our client, Reform It Now, obtained 501(c)(3) tax exemption in only two weeks using the new IRS Form 1023-EZ!

From filing the 1023EZ on August 1st to receipt of the determination letter on August 14th is, in my humble opinion, simply breathtaking and I dare say, ONLY Harbor Compliance could have achieved that.
Dr. Bob A.Reform It Now, Inc.

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This page was last fact-checked March 29, 2016.