How to Start a Nonprofit in Arkansas

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:	Arkansas Secretary of State - Business and Commercial Services Division (BCS) Name search
   Suffix:	Not required.  AC §4-33-401

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.

   Arkansas director requirements:	Number: minimum 3 Qualifications: An individual. No residency requirement. No membership requirement. Term: default is 1 year, 6 year maximum Quorum: majority Committee: minimum 2 directors
   Arkansas officer requirements:	A president, a secretary, a treasurer and such other officers as are appointed by the board. Two or more offices may be held by the same individual. Term: 3 year maximum

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 Arkansas registered agent office is located in Mountain Home, AR. 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:	Arkansas Secretary of State - Business and Commercial Services Division (BCS)
   Form:	NPD-1: Articles of Incorporation for Domestic Nonprofit Corporation or NPD-1-501-c-3: Articles of Incorporation for Domestic Nonprofit Corporation - 501(c)(3)
   Filing Method:	Mail or online.
   Agency 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

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 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.

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:

    Agency:	Arkansas Department of Finance and Administration
    Form:	Form AR1023CT: Application for Income Tax Exempt Status
    Instructions:	http://www.dfa.arkansas.gov/offices/incomeTax/corporation/Documents/2012_AR1023CTInstructions.pdf
    Agency Fee:	$0
    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:	Arkansas does not offer a general exemption application for nonprofits, but charitable sales are exempted under certain conditions. The certificate of exemption can be used to exempt an organization from sales tax in a specific purchase.

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.

    Arkansas Charitable Organization Registration

    Agency:	Arkansas Secretary of State - Business and Commercial Services Division (BCS) - Charities Bureau
    Law:	Arkansas Code Ann. § 4-28-402
    Foreign Qualification is Prerequisite:	No
    Registered Agent (Special Agency) Required?	No

    One-Time Exemption Registration

    More Details

    Exemption Eligible Organizations:	Bona fide, duly constituted, religious entities that are exempt from taxation pursuant to the Internal Revenue Code and no part of the entity’s income inures to the direct benefit of any individual Educational institutions approved by any state or the United States or by an accrediting body and parent teacher organizations Political candidates and organizations Governmental organizations Nonprofit hospitals Charities that do not intent to solicit and receive and do not actually receive more than $50,000 in contributions during a fiscal year and do not use professional fundraisers Persons or entities that solicit for exempt organizations
    Form:	Form EX-01: Exempt Organization Verification
    Filing Method:	Email to charities@sos.arkansas.gov
    Agency Fee:	$0
    Law:	Arkansas Code Ann. § 4-28-404
    Notarization Required?:	Required
    Notes:	Exemptions do not expire as long as the organization continues to qualify under the exemption criteria. Educational institutions must submit a letter of accreditation with their exemption application.
    Required Attachments:	A copy of the appropriate Internal Revenue Service tax-exempt status form, if applicable A copy of the organization’s filed Articles of Incorporation Satisfactory proof the organization is in good standing

    Initial Registration

    More Details

    Form:	Form CR-01: Charitable Organization Registration Form
    Instructions:	Charitable Registration in Arkansas
    Filing Method:	File by mail or email to charities@sos.arkansas.gov.
    Agency Fee:	$0
    Turnaround:	1-2 weeks
    Original Ink:	Not required
    Notarization Required?:	Required
    Notes:	One signature of officer, director, or incorporator required. Some Arkansas 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 Arkansas, obtain a certificate of good standing from your home state to submit during the foreign qualification process.
    How to Apply:	Domestic Applicants: File entity formation documents with the Arkansas Secretary of State. Mail or email a completed Charitable Organization Registration Form and all required attachments to the Arkansas Secretary of State - Business and Commercial Services Division - Charities Section. Foreign Applicants: Determine whether or not your charity will need to foreign qualify based on your activity in Arkansas. If not required, skip to number 3. File foreign qualification documents with the Arkansas Secretary of State. Mail or email a completed Charitable Organization Registration Form and all required attachments to the Arkansas Secretary of State - Business and Commercial Services Division - Charities Section.
    Required Attachments:	Form CR-02: Charitable Organization Consent for Service (if applicable) Either IRS determination letter or IRS form 1023 Articles of incorporation Form CR-03: Annual Financial Report Form (if applicable) IRS form 990 Audited financials (if applicable) Relationships or contracts with fund-raising counsel, paid solicitors, or commercial coventurers

    Registration Renewal

    More Details

    Form:	Form CR-03: Annual Financial Report Form
    Filing Method:	Mail or email to charities@sos.arkansas.gov.
    Agency Fee:	$0
    Due:	Annually within 180 days (6 months) of the organization's fiscal year end. There is no official start to the renewal period, so renewals may be submitted as soon as financials become available for the most recently completed fiscal year.
    Due Date Extension:	Due dates can be extended for 6 months beyond the original due date by emailing the secretary of state at charities@sos.arkansas.gov and including the words “Annual Financial Report Extension” in the subject line of the email.
    Original Ink:	Not required
    Notarization Required?:	Required
    Required Attachments:	IRS form 990 Audited financials (if the total contributions of the organization were in excess of $1,000,000 in any fiscal year) New or updated relationships or contracts with fund-raising counsel, paid solicitors, or commercial coventurers Only if amended: IRS determination letter, articles of incorporation, and bylaws

    Contract Filing

    More Details

    Form:	Form CR-04: Notice of Sales Promotion with Coventurer
    Filing Method:	Email to charities@sos.arkansas.gov
    Agency Fee:	$0
    Turnaround:	1-2 business days
    Due:	Every charitable organization subject to the registration requirements of A.C.A. § 4-28-402 that agrees to permit a charitable sales promotion to be conducted in its behalf shall obtain a written agreement from the commercial coventurer and file a copy of the agreement with the Secretary of State before the commencement of the charitable sales promotion within this state.
    Original Ink:	Not required
    Notarization Required?:	Not required
    Notes:	An authorized representative of the charitable organization and the commercial coventurer must sign the agreement, and the terms of the agreement shall include at a minimum the following: The goods or services to be offered to the public; The geographic area where, and the starting and final date when, the offering is to be made; The manner in which the name of the charitable organization is to be used, including any representation to be made to the public as to the amount or percent per unit of goods or service purchased or used that is to benefit the charitable organization; A provision for an accounting on a per unit basis to be given by the commercial coventurer to the charitable organization and the date on which it is to be made; and The date when and the manner in which the benefit is to be conferred on the charitable organization.
    How to Apply:	The charity must be registered to solicit charitable contributions or otherwise exempt for the contract to be accepted.

    Reinstatement

    Not required

    
    
    

    Formal reinstatement is not required. Charities wishing to renew a lapsed registration should submit renewal filings and required financials for every year not registered since the last filing. If a charity has been out of compliance for over 5 years, it must also submit a new initial filing with updated copies of all the required documents.

    Change of Fiscal Year

    More Details

    Form:	Form CR-03: Annual Financial Report Form
    Agency Fee:	$0
    Turnaround:	1-2 business days
    Notes:	File the short year form with the updated fiscal year information.

    Cancelation

    More Details

    Filing Method:	Email to charities@sos.arkansas.gov
    Agency Fee:	$0
    Notes:	To close out your registration, send a signed and dated letter stating that you would like to withdraw. The request must list the last date of solicitation in Arkansas and all financial reports on file must be current to that date.

    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 Arkansas nonprofit compliance guide to learn more!

Continue reading "Arkansas Nonprofit Compliance"

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