represents many for-profit...
480 Cedar StreetSt. Paul, MN 55101Tel: 651-290-1500Fax: 651-290-1188E-mail: apmg@mpr.orgWeb site: www.americanpublicmediag...
the states.)   * The name cannot contain certain words prohibited by the state, such asBank, Cooperative, Federal, Nationa...
After the corporate filing office returns a copy of your filed articles, you cansubmit your federal 501(c)(3) tax exemptio...
Appoint DirectorsDirectors, who meet and make decisions collectively as the board of directors,have the authority (and res...
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  1. 1. represents many for-profit and not-for-profit organizations and assists themin acquiring real estate with tax-exempt bonds, EZ Bonds, construction loans,bridge loans, SWAPS, and New Market Tax Credits. Olivia is experienced inassisting nonprofits with establishing 501(c)(3) status and for-profit subsidiariesand guides her clients through the process by filing their articles of incorporation,drafting Bylaws, filing for 501(c)(3) status and completing 1023 application, andfiling for state and local tax exemption.------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Urban Projects Innitiative is the parent nonprofit organization responsible forproviding multi-level support for its subsidiary for-profit corporations.for-profit subsidiary operates independently and helps offset the costs of runningthe nonprofit entities. The structure of American Public Media Group is furtherdescribed below.American Public Media GroupAPMG is a tax-exempt nonprofit parent support organization that providesadministrative, financial, and human resources services to its supportedorganizations and divisions, American Public Media, Minnesota Public Radio,The Fitzgerald Theater Company, Southern California Public Radio and ClassicalSouth Florida, and provides financial and human resources services to its whollyowned for-profit subsidiary, Greenspring Company. APMG operates Public RadioMarket, the Pretty Good Goods Catalog and The Lake Wobegon USA Storeunder license from American Public Media. APMG is a significant shareholder, a for-profit company that provides community and commerceservices to the public radio audience. Gather also has content licenseagreements with MPR, APM and SCPR.The mission of American Public Media Group is to provide significant long-termfinancial strength to its supported organizations.Board of trustees 11Chair Randall J. HoganPresident William H. KlingNumber of employees on 9/5/07 31Number of American Public Media affiliates on 9/5/07 788FY08 budgeted operating revenue $8.3 million Earned revenue activities $4.9 million Support services activities $3.4 millionFY08 budgeted operating revenue of the APMG group $104.09 millionAPMG consolidated workforce on 9/5/07 717
  2. 2. 480 Cedar StreetSt. Paul, MN 55101Tel: 651-290-1500Fax: 651-290-1188E-mail: apmg@mpr.orgWeb site:;jsessionid=28378981DA96956CB70E6484A964488DHow to Form a 501(c)(3) Nonprofit CorporationHeres how to form a nonprofit corporation and receive a 501(c)(3)tax exemption.Bookmark and ShareForming a nonprofit corporation is much like creating a regular corporation,except that nonprofits have to take the extra steps of applying for tax-exemptstatus with the IRS and their state tax division. Here is what you need to do: 1. Choose an available business name that meets the requirements of statelaw. 2. File formal paperwork, usually called articles of incorporation, and pay asmall filing fee (typically under $125). 3. Apply for your federal and state tax exemptions. 4. Create corporate bylaws, which set out the operating rules for your nonprofitcorporation. 5. Appoint the initial directors. (In some states you must choose your initialdirectors before you file your articles, because you must list their names in thedocument.) 6. Hold the first meeting of the board of directors. 7. Obtain licenses and permits that may be required for your corporation.Choose a Business NameBefore you form your nonprofit corporation, you need to decide on a name thatcomplies with the rules of your states corporate filing office. Check your statesfiling office website for your states rules, but the following guidelines commonlyapply: * The name of your nonprofit cannot be the same as the name of anothercorporation on file with the corporations division. * The name must end with a corporate designator, such as Corporation,Incorporated, Limited, or Corp., Inc., or Ltd. (This is required in only about half of
  3. 3. the states.) * The name cannot contain certain words prohibited by the state, such asBank, Cooperative, Federal, National, United States, or Reserve.In many states, you can check corporate name availability online by going to thestates filing office website. Or you can call your states corporations division andask whether your proposed name is available for your use. Often, for a small fee,you can reserve the name for a short period of time until you file your articles ofincorporation.Check Your States Corporations Division WebsiteYour states corporate filing division, usually part of the secretary or departmentof states office, should have a website with nonprofit materials that will beimmensely helpful to you in forming your nonprofit. You will most likely findsample or fill-in-the blank articles of incorporation, your states nonprofitcorporation laws, a filing fee schedule, and forms and instructions for checkingthe availability of your proposed business name.In addition to confirming that another corporation in your state isnt already usingyour proposed name, you must make sure your name wont violate a trademarkowned by another company (in your state or out of state). To do this, youll needto conduct a trademark search. For information about trademark law and nameconflicts, see the Your Business Name area of Nolos website.Once youve found a legal and available name, you arent usually required to fileor reserve the name with your state -- when you file your articles of incorporation,your nonprofits name will be automatically registered.Prepare and File Your Articles of IncorporationAfter youve decided on your business name, you must prepare and file articlesof incorporation with the corporate filing office. This document goes by a differentname in a handful of states; your state may instead use the term articles oforganization, certificate of incorporation, certificate of formation, or charter.Your states corporate filing office website should have nonprofit articles ofincorporation -- either a fill-in-the-blank form or a sample on which you can baseyour articles. Although preparing this document isnt difficult, you do need toinclude specific language to ensure that youll receive tax-exempt status. Yourstates nonprofit formation packet, if available, may include the requiredinformation. If not, or if you need help understanding the requirements, consult agood legal self-help guide such as How to Form a Nonprofit Corporation, byAnthony Mancuso (Nolo), to make sure your articles comply with your statesnonprofit law.Bookmark and Share
  4. 4. After the corporate filing office returns a copy of your filed articles, you cansubmit your federal 501(c)(3) tax exemption application to the IRS. (The IRSrequires you to submit a copy of your filed articles with your application.) This is acritical step in the formation of your nonprofit organization since most of the realbenefits of being a nonprofit flow from 501(c)(3) tax-exempt status.To apply for your exemption, you must complete IRS Package 1023, Applicationfor Recognition of Exemption. For instructions on filling out this form, read IRSPublication 557, Tax-Exempt Status for Your Organization. (You can obtain all ofthese items for free by calling 800-TAX-FORM, or you can download them fromthe IRS website at If you need a bit of help deciphering the IRS-speak, consider downloading Nolos plain-English eGuide, NonprofitCorporations: Tax Exemption.Read the Tax Exemption Application Before Filing Your ArticlesWhile you cant actually file your exemption application until the corporate filingoffice has approved your articles of incorporation, before you file your articles,take a couple of hours to learn what it takes to qualify for the tax exemption. Ifyou file your articles and then discover a problem as you begin working throughthe tax exemption application, you could be stuck paying taxes while you workthrough these issues -- or even learn too late that your group isnt eligible for anexemption.After the IRS reviews your application, it will send you a letter indicating that ithas approved your nonprofit status, or it might ask you for more informationabout your organization. The IRS can also deny your application outright. If thishappens, see a lawyer who specializes in nonprofits. Nolos Lawyer Directoryprovides comprehensive profiles of the lawyers who advertise there, includingeach lawyer’s education, background, areas of expertise, fees, and practicephilosophy.Apply for a State Tax Exemption (If Necessary)In a few states, you must complete a separate application to get a state taxexemption. In other states, as long as you file nonprofit articles of incorporationand obtain your federal 501(c)(3) tax-exempt status, your state tax exemption willbe automatically granted. In still others, to get your state exemption you mustsend in a copy of the IRS determination letter that granted your federalexemption. Contact your state tax agency to find out what steps you must take.Draft Corporate BylawsNext you must create bylaws, the internal rules that govern your nonprofitcorporation. Bylaws contain rules and procedures for holding meetings, voting onissues, and electing directors and officers. To create bylaws, you can eitherfollow the instructions in a self-help resource or hire a lawyer in your state to draftthem for you. Typically, the bylaws are adopted by the corporations directors attheir first board meeting.
  5. 5. Appoint DirectorsDirectors, who meet and make decisions collectively as the board of directors,have the authority (and responsibility) to manage and run the nonprofitcorporation. Many states allow nonprofits to have just one director, but otherstates require at least three.Hold a Directors MeetingThe purpose of the first meeting of the board of directors is to conduct the initialbusiness of the corporation and take care of other formalities, such as recordingthe receipt of federal and state tax exemptions.The directors should first adopt the bylaws and elect officers -- state law usuallyrequires a president, secretary, and treasurer, and sometimes a vice president aswell. Then, the directors should authorize the newly elected officers to takeactions necessary to start the business of the nonprofit -- for example, setting upbank accounts and admitting members.After the meeting is completed, minutes of the meeting should be created andfiled in your corporate records book. For more information, see Nolos articleProtecting Your Nonprofit Corporations Tax-Exempt Status.Obtain Licenses and PermitsMany businesses, whether operating as for-profit or nonprofit corporations,partnerships, or sole proprietorships, are required to obtain state or local licensesand permits before commencing business. So, while you may not be subject tothe kind of red tape that entangles profit-making enterprises, you should checkwith your state department of consumer affairs (or similar state licensing agency)for information concerning state licensing requirements for your type oforganization. For instance, a local business license (sometimes called your taxregistration certificate) may be required for your activities, and if you sell anythingto consumers, youll need a sales tax permit.Getting StartedFor practical advice and detailed instructions on starting a nonprofit, see Starting& Building a Nonprofit: A Practical Guide, by Peri Pakroo (Nolo).Learn how to avoid IRS hassles with Nonprofit Meetings, Minutes & Records:How to Run Your Nonprofit Corporation So You Dont Run Into Trouble, byAnthony Mancuso (Nolo).See Nolos Effective Fundraising for Nonprofits: Real-World Strategies ThatWork, by Ilona Bray, for advice and stories from experienced fundraisers whohave found financial support for their missions.