How to Start a Nonprofit in Tennessee

1. Name Your Organization

   Your organization’s name establishes its brand and is also important for incorporating with the state. The legal name of your nonprofit corporation may not conflict with any other organization registered in the state. Make sure the name is available and meets state requirements.

   Name Search:	Tennessee Secretary of State - Division of Business Services Name search
   Suffix:	Not required.  Tenn. Code Ann. § 48-54-101

2. Recruit Incorporators and Initial Directors

   The incorporator is the person who signs the Articles of Incorporation for your nonprofit. You will need at least one, but can have more than one. Directors make up the governing body of your nonprofit corporation and are stakeholders in your organization’s purpose and success. You’ll want to identify three, unrelated individuals to meet IRS requirements. You will also want to be aware of any age or residency requirements.

   Tennessee director requirements:	Number: minimum 3 Qualifications: Natural persons. No residency requirement. No membership requirement. Term: default is 1 year, 5 year maximum Quorum: majority Committee: minimum 1 natural person who need not be a director
   Tennessee officer requirements:	A president and a secretary are required. One officer prepares minutes of the directors' and members' meetings and authenticates records of the corporation. Two or more offices may be held by the same individual, except for president and secretary.

3. Appoint a Registered Agent

   A registered agent is responsible for receiving legal notices on behalf of your organization. The appointed registered agent must be physically located in the state and maintain an office that is open during regular business hours. As a nationwide registered agent, our service is designed to receive your legal documents and provide secure access to those documents through your online account. Our local Tennessee registered agent office is located in Knoxville, TN. We offer registered agent service independently or as part of our nonprofit formation packages.

4. Prepare and File Articles of Incorporation

   Your nonprofit’s articles of incorporation officially mark the creation of your organization. They document where and when the organization was formed and capture other information necessary to verify its existence. While requirements for language vary from state-to-state, there are some basic provisions that the IRS will look for when you apply for 501(c)(3) exemption. It is important to customize the articles for your organization and make sure you meet the state and IRS requirements. Meeting these requirements from the start will help avoid having to make amendments later or risk getting your 501(c)(3) application rejected. Some states will also require you to publish your articles of incorporation, so be mindful of any deadlines and publishing instructions.

   Agency:	Tennessee Secretary of State - Division of Business Services
   Form:	Charter (ss-4418)
   Filing Method:	Mail, in-person or online.
   Agency Fee:	$100
   Turnaround:	~4 business days by mail. ~2 days online. Immediately in-person.
   Law:	Tennessee Code Title 48. Corporations and Associations § 48-52-102
   Notes:	A certificate of incorporation is issued upon approval.

5. File Initial Report

   After filing articles of incorporation, you must file an initial report.

   Not required

   
   
   

6. Obtain an Employer Identification Number (EIN)

   This unique, nine-digit number is assigned by the IRS to identify your nonprofit. All types of nonprofits will apply for an EIN, not only those that hire employees. You will use your EIN to open a bank account, apply for 501(c)(3) status, and submit 990 returns to the IRS.

   Agency:	Internal Revenue Service (IRS)
   Form:	IRS Form SS-4
   Instructions:	Applying for an EIN without a SSN/TIN: Online applications are not accepted if an individual does not have a SSN/TIN. Form SS-4 must be completed, signed, and faxed to the IRS, leaving the SSN/TIN field blank or adding the terminology "foreign" to that line item. To follow up on the application, call the IRS and ensure they received the application.  Depending on the agent you speak with, you may be able to obtain the EIN over the phone. The IRS may then fax the EIN documentation back to you.
   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. For additional guidance, see IRS Pub 1635: Understanding Your EIN.

7. Store Nonprofit Records

   As you launch your nonprofit, you will receive a number of official documents. Organizing these documents in one place will save you headaches down the road. You will soon have numerous items to keep in your records including your EIN letter, bylaws, meeting minutes, 501(c)(3) determination letter, and more.

   
   
   

   A great way to maintain necessary documentation is Records Manager, our software for storing records securely, tracking directors and officers, and getting notified of meetings.

8. Establish Initial Governing Documents and Policies

   Your bylaws are the governing document for your nonprofit. They serve as your organization’s operating manual and should be consistent with your articles of incorporation and the law. When your Board of Directors meets for the first time, you’ll review and ratify the bylaws and they will be a roadmap for governance from there.

   At the same time, you’ll also want to create and adopt a conflict of interest policy. A conflict of interest is when someone in a key position in your nonprofit has competing interests and is making choices that could benefit themselves to the harm of the organization. Personal interests should be set aside and organizational interests prioritized. If a conflict of interest does arise, it should be disclosed immediately.

   Your application to the IRS for 501(c)(3) exemption will require that both the bylaws and the conflict of interest policy are approved and adopted. Once they’ve been adopted, safely store them in your Nonprofit Records Kit.

9. Hold Organizational Meeting of the Board of Directors

   The initial organizational meeting of your Board of Directors will be incredibly productive. At this meeting you will approve the bylaws, adopt the conflict of interest policy, elect directors, appoint officers, and approve resolutions such as opening the organization’s bank account. Important decisions are being made so be sure to record them in the meeting minutes.

10. Get Tennessee State Tax Identification Numbers/Accounts

    Tennessee offers a consolidated registration application for new business state tax registration.

    Submit to:	Tennessee Department of Revenue http://www.tn.gov/revenue/
    Guidance:	Instructions on Opening a Business in Tennessee
    Form:	Form RV-F1300501: Tennessee Department of Revenue Application for Registration
    Instructions:	Form RV-F1300501 - Instructions
    Filing Method:	Mail or online
    Fee:	$0

11. Apply for 501(c)

    Applying for 501(c) tax exemption can feel like the most daunting step in bringing your nonprofit dream into reality, but obtaining tax exemption comes with many benefits. You will be able to apply for grants and grow your fundraising success in addition to being exempt from IRS income tax. 501(c) is the chapter of the Internal Revenue Code that regulates nonprofit organizations. Like others, you may be most familiar with 501(c)(3) nonprofits, including charities and foundations. 501(c)(3) nonprofits apply using Form 1023 or Form 1023-EZ. Review the criteria for each application and make sure you meet the eligibility requirements set out by the IRS. Other types of nonprofits, including 501(c)(4)s and 501(c)(6)s, apply using Form 1024. After reviewing and approving your application, the IRS will return a Determination Letter officially recognizing your exemption.

    Completing the federal application for tax exemption is significantly easier with the assistance and support of a professional. Find someone with the expertise to ensure the correct application is being used and is completed accurately. A well-prepared application takes time, over 100 hours by IRS estimates, so put yourself on the path to success by finding a specialist to walk alongside you in the journey - from start to tax-exempt finish!

    Agency:	Internal Revenue Service (IRS)
    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.  Also see guidance IRS Pub 557: Tax-Exempt Status for Your Organization.
    Filing Method:	Mail
    Agency Fee:	$275 for organizations filing Form 1023-EZ and $600 for organizations filing Form 1023.
    Turnaround:	1023-EZ average: <1 month. 1023 average: 3-6 months.

    

12. Report Beneficial Ownership Information to FinCEN

    As of January 1, 2024, millions of entities in the US need to report beneficial ownership information (BOI) to the Financial Crimes Enforcement Network (FinCEN) as part of the Corporate Transparency Act (CTA). Nonprofits without 501(c) tax exemption formed before that date must submit BOI by December 31, 2024, while those formed after must submit it within 30 days of formation. Once 501(c) tax exemption is granted, the organization may claim an exemption from BOI reporting requirements via an update filing to FinCEN. Our BOI Reporting Service includes up to four initial, updated, and corrected reports per year, ensuring the data you report to FinCEN is updated.

13. Apply for State Tax Exemption(s)

    With your IRS Determination Letter in hand, make sure you familiarize yourself with your state’s requirements for recognizing your nonprofit’s tax-exempt status. This is an area where requirements vary state-by-state. Many states issue their own tax-exempt certificate that can be used for sales and use tax purposes, but it may require application and periodic renewal.

    To file to obtain exemption from state income tax:

    Not required

    
    
    

    Franchise and excise taxes are not applicable to nonprofit corporations as defined by law. The Application for Exemption - Franchise and Excise Taxes form is for other exemptions.

    More information: Tennessee Department of Revenue

    To file to obtain Sales Tax Exemption:

    Agency:	Tennessee Department of Revenue
    Form:	Form RV-F1306901: Application for Registration - Sales and Use Tax Exempt Entities
    Agency Fee:	$0
    Notes:	Exemption certificates are only issued to Tennessee nonprofits. Out-of-state nonprofits should instead present their IRS determination letter to vendors.

14. Register for Charitable Solicitation (Fundraising)

    This is another area where laws differ from state to state, but most states require any nonprofit soliciting donations to register to do so on an annual basis. This means registering in the state prior to soliciting any resident of that state. Registering in your home state is essential, but you may also need to register other states depending on the scope of your organization.

    Tennessee Charitable Organization Registration

    Agency:	Tennessee Secretary of State - Division of Charitable Solicitations and Gaming
    Law:	Tennessee Code Annotated §48-101-501 et seq.
    Foreign Qualification is Prerequisite:	No
    Registered Agent (Special Agency) Required?	No

    Automatic Exemption

    More Details

    Exemption Eligible Organizations:

    Bona fide religious institutions An organization organized and operated exclusively for educational purposes and which normally maintains a regular faculty and curriculum and normally has a regularly enrolled body of pupils or students in attendance at the place where its educational activities are regularly carried on, and which is accredited by a recognized accrediting agency. Included in such definition are organizations composed of parents of students and other persons connected with the institution, which are organized and operated for the purpose of conducting activities in support of the operations or extracurricular activities of such institutions. “Educational institution” also includes private foundations soliciting contributions exclusively for such organizations. Cooperative scholarship corporations regulated by title 49, chapter 4, part 1 Volunteer fire departments, rescue squads or local civil defense organizations Community fairs, county fairs, district fairs and division fairs, as defined in § 43-21-104, that have been qualified by the commissioner of agriculture to receive state aid grants, pursuant to title 43, chapter 21, part 1 Political parties, candidates for federal or state office, and political action committees required to file financial information with federal or state election commissions Hospitals and nursing homes that are subject to regulation by the Tennessee Department of Health Any corporation established by an act of congress of the United States that is required by federal law to submit annual reports of its activities to congress containing itemized accounts of all receipts and expenditures after being fully audited by the department of defense

    Law:

    Tenn. Code Ann. § 48-101-502

    Registration to Obtain Exemption

    More Details

    Exemption Eligible Organizations:	Charities with less than $50,000 in gross contributions during the preceding fiscal year & none of their fundraising activities were conducted by professional fundraisers, fundraising counsel, or commercial coventurers.
    Filing Method:	Online
    Agency Fee:	$0
    Notes:	Charities must register within 30 days if they exceed $50,000 in contributions OR if any portion of their fundraising activities are conducted by professional solicitors, fundraising counsel, or commercial coventurers.

    Renewal to Maintain Exemption

    More Details

    Exemption Eligible Organizations:	Charities with less than $50,000 in gross contributions during the preceding fiscal year
    Filing Method:	Online
    Agency Fee:	$0
    Due:	Annually by the end of the 6th month after the close of your fiscal year.

    Initial Registration

    More Details

    Filing Method:	Online
    Agency Fee:	$10
    Turnaround:	1 month
    Original Ink:	Not Required
    Notarization Required?:	Not Required
    Notes:	The CFO and another officer must sign. Signatures need not be notarized. Remember to attach the Summary of Financial Activities form. If your nonprofit registers during its first year, it must file a quarterly financial report. Some Tennessee counties and municipalities may require charities that solicit in-person to register prior to fundraising.
    Before you Apply:	Domestic Applicants: Check the available exemptions to see if your charity is eligible for exemption from the full registration requirement. If your charity meets the audit threshold, obtain an audited financial report to submit with your registration application. Look through the list of required attachments and make sure that you have each required document in hand before starting the registration application. Foreign Applicants: Check the available exemptions to see if your charity is eligible for exemption from the full registration requirement. If your charity meets the audit threshold, obtain an audited financial report to submit with your registration application. Look through the list of required attachments and make sure that you have each required document in hand before starting the registration application. If you will foreign qualify in Tennessee, obtain a certificate of good standing from your home state to submit during the foreign qualification process. The certificate cannot be more than 2 months old when filing foreign qualification documents.
    How to Apply:	Domestic Applicants: File entity formation documents with the Tennessee Secretary of State - Division of Business Services. Submit an Application for Registration of a Charitable Organization, a quarterly or annual summary of financial activites form, and all required attachments to the Tennessee Secretary of State - Division of Charitable Solicitations and Gaming. Foreign Applicants: Determine whether or not your charity will need to foreign qualify based on your activity in Tennessee. If not required, skip to number 3. File foreign qualification documents with the Tennessee Secretary of State - Division of Business Services. Submit an Application for Registration of a Charitable Organization, a quarterly or annual summary of financial activites form, and all required attachments to the Tennessee Secretary of State - Division of Charitable Solicitations and Gaming.
    Required Attachments:	IRS form 990 Audited financials (if applicable) Articles of incorporation Bylaws IRS determination letter List of officers and directors Professional fundraising contracts Proof of DBA/Fictitious Name filing in domicile state, if applicable

    Registration Renewal

    More Details

    Filing Method:	Online
    Agency Fee:	$10
    Due:	Annually by the end of the 6th month after the close of your fiscal year. So if your fiscal year ends December 31, then file by June 30. Renewals can be filed up to 90 days prior to the due date.
    Due Date Extension:	Due dates can be extended for 90 days beyond the original due date by submitting a request for extension through the online portal. A second extension of 60 days is available, and charities must submit a copy of IRS form 8868 when requesting a second extension.
    Original Ink:	Not Required
    Notarization Required?:	Not Required
    Penalties:	There is a late fee of $10 for each month that passes after the due date. Charities with less than $50,000 in gross revenue will not be assessed late fees.
    Notes:	The CFO and another officer must sign. Signatures need not be notarized.
    Required Attachments:	IRS form 990 Audited financials (if applicable) List of officers and directors Professional fundraising contracts

    Contract Filing

    More Details

    Form:	Notice of Charitable Sales Promotion
    Filing Method:	Mail or Email
    Agency Fee:	$0
    Due:	Charities must submit a copy of the written contract between the organization and the commercial coventurer at least 5 days before the initiation of a charitable sales promotion

    Financial Reporting
    Quarterly Financial Report

    More Details

    Filing Method:	Online
    Agency Fee:	$0
    Due:	Within 30 days after the end of each quarter of the organization's current fiscal year.
    Notes:	During their first year of operation, newly registered charitable organizations must provide quarterly financial reports to the Secretary of State. Any charitable organization, other than a bona fide religious institution, that solicits and receives contributions exceeding $25,000 for a charitable purpose related to a disaster in this state shall file quarterly financial reports with the secretary of state, on forms prescribed by the secretary of state, detailing the money raised and expended by the organization as a result of the solicitation, until the funds are expended. The first quarterly report shall be filed on the last day of the third month following the commencement of solicitations.

    Financial Reporting
    State Disaster Excess Fund Placement Report

    More Details

    Filing Method:	Online
    Agency Fee:	$0
    Due:	Due by the last day of the 24th month following the commencement of solicitations
    Notes:	Any charitable organization, other than a bona fide religious institution, that solicits and receives contributions exceeding $25,000 for a charitable purpose related to a disaster in this state and that does not expend all contributions received within 2 years of the commencement of solicitations shall file a report with both the secretary of state and the attorney general and reporter detailing both the timing and anticipated placement for the expenditures of the remaining funds. This report must be filed by the last day of the twenty-fourth month following the commencement of solicitations. A charitable organization may request an exemption from the requirements of this subsection (c) from the secretary of state and the attorney general and reporter; however, both the secretary of state and the attorney general and reporter must first approve the request.

    Reinstatement

    Not required

    
    
    

    Charities do not need to complete a formal reinstatement. To renew a lapsed registration, a single renewal filing must be submitted, along with financial reports for each year the charity was not registered and payment of all applicable renewal and late fees. Also attach copies of organizing documents, bylaws, IRS determination letter(s), etc. that have changed since the last filing.

    Change of Fiscal Year

    More Details

    Agency Fee:	$0
    Turnaround:	1-2 business days
    Notes:	Send the state a copy of the short IRS 990 once it is available.

    Supplemental Reporting
    Collection Receptacle Annual Report

    More Details

    Form:	Collection Receptacle Annual Report Amended Collection Receptacle Annual Report
    Instructions:	A list of all the collection receptacles maintained by the organization to collect donated clothing, household items, or similar goods must be provided to the Secretary of State. Organizations must provide copies of the written, notarized permissions from property owners and/or all leaseholders of the said property where the receptacle is maintained.
    Filing Method:	Mail
    Agency Fee:	$0
    Due:	Annually by July 1 A fully updated list must be provided within 14 days of the placement of a new bin or the change/removal of a bin's location
    Notarization Required?:	Required
    Notes:	Disclosure Requirements "1. Any charitable organization that places or maintains a collection receptacle in public view for the purpose of collecting donated clothing, household items, or similar goods shall clearly and conspicuously display on two (2) sides, including the front, of each collection receptacle a permanent sign or label with the charitable organization's name, address, phone number, electronic mail address, and a statement expressing the charitable purpose for which the charitable organization exists. 2. Any person who is not a charitable organization and who places or maintains a collection receptacle in public view for the purpose of collecting donated clothing, household items, or similar goods, for resale for the purpose of retaining the proceeds of the sale of the items, shall clearly and conspicuously display on two (2) sides, including the front, of each collection receptacle a permanent sign or label with the person's name, address, phone number, electronic mail address, and the following statement: THIS IS NOT A CHARITY. DONATIONS MADE HERE WILL BE SOLD BY A FOR-PROFIT BUSINESS AND ARE NOT TAX-DEDUCTIBLE. 3. (A) Any person who is not a charitable organization and who places or maintains a collection receptacle in public view for the purpose of collecting donated clothing, household items, or similar goods, for resale for the purpose of paying over all or a portion of the proceeds from the sales to a charitable organization, shall display on two (2) sides, including the front, of each collection receptacle a permanent sign or label with the following statement: DONATIONS MADE HERE WILL BE SOLD BY A FOR-PROFIT BUSINESS, AND A PORTION OF THE PROCEEDS WILL BE PAID TO [NAME OF CHARITABLE ORGANIZATION]. FURTHER INFORMATION ABOUT THESE PAYMENTS CAN BE OBTAINED FROM [NAME OF PERSON OPERATING COLLECTION RECEPTACLE] AT [PHONE NUMBER AND ELECTRONIC MAIL ADDRESS] AND FROM [NAME OF CHARITABLE ORGANIZATION] AT [PHONE NUMBER AND ELECTRONIC MAIL ADDRESS]. 4. The sign or labels required by this subsection (l) shall be placed on two (2) sides of the collection receptacle, including the front, with the required information printed in letters that are at least two inches (2") in height, and in a color that contrasts with the color of the collection receptacle so that the sign or label is clearly visible."
    Required Attachments:	Notarized, written permissions with property owners and/or all leaseholders of the said property where the collection receptacle is located

    Cancelation

    More Details

    Filing Method:	Online
    Agency Fee:	$0
    Notes:	To close out your registration, submit a Notice of Intent to Cease Solicitations, the most recently filed IRS form 990, and a brief letter of explanation.
    Required Attachments:	Most recent IRS Form 990 or financial documentation

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

15. Obtain Other Business Licenses & Permits

    Running your nonprofit corporation legally also means securing all applicable licenses and permits. The range of local, state, and federal requirements is wide. Access resources like the Small Business Administration Business License & Permit look-up tool and search by your business type and locality.

Frequently Asked Questions

You’ve made it! You turned your passion into a legitimate nonprofit corporation exempt under IRS 501(c) and are benefiting your community. That solid foundation on which you built your organization requires ongoing maintenance. Investing in maintaining compliance with all of the government agencies is an ongoing responsibility and commitment needed to ensure your vision continues long into the future. Check out our compliance guide to learn more!

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 Tennessee nonprofit compliance guide to learn more!

Continue reading "Tennessee Nonprofit Compliance"

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