How to Start a Non-Profit Organization in Kentucky


Welcome to our Kentucky nonprofit resource guide! This free guide will help you understand how to start your nonprofit in Kentucky 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?".


Option #1: Our Nonprofit Formation Service

We prepare and file your applications to set up your nonprofit. Starting at $1,395 plus filing fees.

  • Guaranteed 501(c)(3) approval. We have a 100% success rate in forming nonprofits of all types.
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  • Start fundraising with confidence! Gain access to grants and donations exclusive to 501(c)(3) nonprofits.

Harbor Compliance makes starting a 501(c)(3) nonprofit easy. When you choose Harbor Compliance, you work directly with an experienced specialist who gets to know your organization and helps you with every step. Unlike many of our competitors, we fully customize all the applications for your nonprofit. As you have questions, your specialist is available to provide guidance every step of the way. We guarantee approval of your 501(c)(3) application, which establishes a firm foundation for your success.

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Option #2: Do-It-Yourself

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 16,000 nonprofit organizations in Kentucky in 2013. 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:
Kentucky FastTrack Business Organization Search
Name Reservation:
Optional
Suffix:
End with the word "corporation," "company," or "limited" or the abbreviation "Corp.," "Inc.," "Co.," or "Ltd." or words or abbreviations of like import in another language, provided, however, that if a nonprofit corporation's name includes the word "company" or the abbreviation "Co.," it may not be immediately preceded by the word "and" or the abbreviation "&". KRS §273.177
4 Recruit Incorporators and/or Initial Directors
  • Identify the incorporators. These individuals will execute the articles of incorporation and submit them to the state. Kentucky only requires a minimum of one incorporator (KRS §273.243).
  • Recruit initial directors for your nonprofit board of directors. In Kentucky, naming the initial directors in the articles of incorporation is required KRS §273.247. A minimum of three directors are required and the number of directors must be set in the bylaws, except the initial number which is set in the articles (KRS §273.211).
5 Appoint a Registered Agent

Identify the nonprofit’s Kentucky 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 Kentucky and maintain an office that is open during regular business hours.

We provide a convenient service to act as your Kentucky registered agent. As part of that service, our local office in Richmond, KY 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.

Fast Facts

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

Paperwork
  • Form NAI: Non-profit Corporation Articles of Incorporation
  • Bylaws
  • IRS Form SS-4: Obtain an EIN
  • IRS Form 1023: 501(c) Tax Exempt Application
  • IRS Determination Letter
  • Form 10A100: Kentucky Tax Registration Application
  • Form 51A125: Application for Purchase Exemption - Sales and Use Tax
  • URS Charitable Registration, if applicable
  • Kentucky Charitable Registration

Cost
  • Incorporation: $8
  • 501(c): $400 or $850 IRS fee

Time
  • Incorporation: ~3-5 business days by mail or online. While you wait if you file in-person.
  • 501(c): ~3-6 months
6 File Kentucky Nonprofit Articles of Incorporation

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

Submit to:
Office of the Kentucky Secretary of State - Division of Business Filings
http://www.sos.ky.gov/
Form:
Form NAI: Non-profit Corporation Articles of Incorporation
Filing Method:
Mail, in-person, or online
Fee:
$8
Turnaround:
~3-5 business days by mail or online. While you wait if you file in-person.
Law:
Kentucky Revised Statutes - Chapter 273
Notes:
>The IRS requires specific language in the articles of incorporation to qualify for 501(c)(3) federal tax exemption. Refer to IRS Pub 557 for guidance and sample language.
7 Establish Organization Records

"Each corporation shall keep correct and complete books and records of account..." (KRS §273.233. 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 company record book, seal, and document templates.

Draft bylaws which is the governing document for the nonprofit. The bylaws may contain any provisions for the regulation and management of the affairs of a corporation not inconsistent with law or the articles of incorporation (KRS §273.191). 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 (KRS §273.257). 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.

Submit to:
Internal Revenue Service
http://www.irs.gov/
Form:
IRS Form SS-4
Guidance:
IRS Pub 1635: Understanding Your EIN
Filing Method:
Mail, phone, fax, or apply online with the IRS
Fee:
$0
Turnaround:
Immediately online
Notes:
The IRS website is only available during certain hours. Print your EIN before closing your session.
10 Get Kentucky State Tax Identification Numbers/Accounts

Register with the Kentucky Department of Revenue within 30 days of incorporation for applicable tax accounts

Submit to:
Kentucky Department of Revenue
http://revenue.ky.gov/
Form:
Form 10A100: Kentucky Tax Registration Application
Filing Method:
Mail or online
Fee:
$0
Turnaround:
~5-10 business days

You may also need to file other Kentucky Registration Applications.

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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.

Submit to:
Internal Revenue Service
http://www.irs.gov/
Form:
IRS Form 1023, IRS Form 1023-EZ, or IRS Form 1024
Instructions:
IRS Instructions for Form 1023, IRS Instructions for Form 1023-EZ, or IRS Instructions for Form 1024
Guidance:
IRS Pub 557: Tax-Exempt Status for Your Organization
Filing Method:
Mail
Fee:
$400 or $850
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 Kentucky Tax Exemption(s)

Your nonprofit is automatically exempt from Kentucky corporate income tax when you receive IRS income tax exemption.

More information:
Kentucky Department of Revenue
http://revenue.ky.gov/

Your nonprofit may be able to obtain exemption from Kentucky sales and use tax. To apply:

Submit to:
Kentucky Department of Revenue
http://revenue.ky.gov/
Form:
Form 51A125: Application for Purchase Exemption - Sales and Use Tax
Filing method:
Mail
Fee:
$0
Notes:
Include a copy of your articles of incorporation and IRS Determination Letter.
13 Register for Charitable Solicitation / Fundraising

Before soliciting any funds or hiring solicitors, you must complete your charitable organization registration in each state where you will raise funds.

If you need to register in many states, review our guide “Charitable Solicitation Registration using the Unified Registration Statement (URS)”. 39 states accept the URS, including Kentucky.

To file only in Kentucky:

Submit to:
Kentucky Office of the Attorney General
Attn: Charity Registration

1024 Capital Center Drive, Suite 200
Frankfort, KY 40601
http://ag.ky.gov/civil/consumerprotection/charity/Pages/registration.aspx
Filing Method:
Mail
Fee:
$0
Notes:
Charitable organizations must register with the Kentucky Attorney General prior to soliciting. There is no prescribed form and there is no fee. File by mail:
  • A copy of the most recent IRS 990 (or URS, if not available)
  • A copy of the IRS Determination Letter
  • A copy of the By-laws
  • A copy of the Articles of Incorporation
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.

Kentucky nonprofits who wish to conduct bingo, raffles, and other charitable gaming must register with the Kentucky Public Protection Cabinet - Department of Charitable Gaming by filing Form CG-1: Kentucky Application for License for Charitable Organization ($25 state fee).

* Ongoing Filings to Maintain Your Nonprofit

You must file federal and state tax returns. You must also file:

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 IRS Form 1023-EZ!

  • "Harbor Compliance has done an outstanding, amazing and utterly brilliant job helping Reform It Now organize and obtain its 501(c)(3) status, quickly.
        In point of fact, Harbor Compliance had our 501(c)(3) determination letter in our hands 8 calendar days before your competitor had scheduled our initial consultation. Yes, that's right. They booked the consultation 30 days after we paid their fee, and you had us together with a consultant in less than a week (mostly because I had to get ready).
        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.

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This page was last fact-checked September 27, 2013.