How to Start a Nonprofit in Connecticut

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:	Connecticut Secretary of State - Commercial Recording Division Name search
   Suffix:	Shall contain the word “corporation”, “incorporated” or “company”, or the abbreviation “corp.”, “inc.” or “co.”, or words or abbreviations of like import in another language. GSC §33-1045.

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.

   Connecticut director requirements:	Number: minimum 3 Qualifications: None. No residency requirement. No membership requirement. Term: until the next annual meeting Quorum: majority Committee: minimum 1 director
   Connecticut officer requirements:	Defined in articles or bylaws. 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.

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 Connecticut registered agent office is located in Glastonbury, CT. 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:	Connecticut Secretary of State - Commercial Recording Division
   Form:	Certificate of Incorporation
   Filing Method:	Mail, fax or online.
   Agency Fee:	$50 + optional $50 expedite fee
   Turnaround:	~3-5 business days. ~24 hours for $50 expedite fee.
   Law:	Connecticut Revised Nonstock Corporation Act Sec. 33-1026

5. File Initial Report

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

   Agency:	Connecticut Secretary of State - Commercial Recording Division
   Form:	Organization and First Report
   Filing Method:	Mail or online.
   Agency Fee:	$50
   Due:	Within 90 days of the filing date of the Certificate of Incorporation.

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 Connecticut State Tax Identification Numbers/Accounts

    Connecticut offers a consolidated state tax registration application. You will obtain a Connecticut Tax Registration Number. State business taxes include corporation business tax, business entity tax (BET), sales and use taxes, income tax withholding, and motor vehicle fuels tax.

    Submit to:	State of Connecticut - Department of Revenue Services http://www.ct.gov/drs
    Form:	Form REG-1: Business Tax Registration Application
    Instructions:	Instructions for Form REG-1
    Guidance:	IP 2006(11): Getting Started in Business - Understanding Connecticut Taxes
    Filing Method:	Mail, in-person, or online
    Fee:	See license and permit fee schedule. A sales tax license is $100.
    Turnaround:	~15-20 business days online. ~2-3 weeks by mail. Immediately in-person.
    Notes:	Nonprofit organizations that make sales of goods or services are generally required to obtain a Connecticut Sales and Use Tax Permit and to collect sales tax on those sales. However, a nonprofit organization may make sales at up to 5 fundraising events per year without collecting sales tax. See Guide SN 98(11).

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:	Connecticut Department of Revenue Services
    Notes:	Exemption from Connecticut income tax is obtained by submitting a copy of your IRS Determination Letter when submitting Form REG-1.

    To file to obtain exemption from state sales tax:

    Not required

    
    
    

    Upon receiving an IRS determination letter, Connecticut nonprofits are automatically exempt from state sales tax. Organizations must follow the guidelines in Guide SN 95(10). This includes providing sellers with a copy of CERT-119: Purchases of Tangible Personal Property and Services by Qualifying Exempt Organizations.

    For more information on other Connecticut tax exemptions and using your exemptions, see TSSN-38: State Tax Guide For Nonprofit Organizations.

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.

    Connecticut Charity Registration

    Agency:	Connecticut Department of Consumer Protection - Public Charities Unit
    Law:	Connecticut General Statutes § 21a-190a et seq.
    Foreign Qualification is Prerequisite:	No
    Registered Agent (Special Agency) Required?	No

    One-Time Exemption Registration

    More Details

    Exemption Eligible Organizations:	Religious organizations Educational institutions using curricula that are registered or approved by any state or the United States or that have been accepted by an accrediting body Parent-teacher associations Nonprofit hospitals Government organizations Charities that receive $50,000 or less in contributions annually provided such organizations do not compensate any person primarily to conduct solicitations Persons who solicit for exempt organizations
    Filing Method:	Online.
    Agency Fee:	$0
    Law:	Connecticut General Statutes § 21a-190d
    Notes:	Exemptions do not expire as long as the organization continues to qualify under the exemption criteria.

    Initial Registration

    More Details

    Form:	Initial Charitable Organization Registration Application
    Filing Method:	Mail or online.
    Agency Fee:	$50
    Turnaround:	2-3 weeks
    Original Ink:	Not required
    Notarization Required?:	Not required
    Notes:	One authorized representative must sign. Notarized signatures are not required. Some Connecticut 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 or reviewed financial report (audited and reviewed financials need not be submitted when registering).  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 or reviewed financial report (audited and reviewed financials need not be submitted when registering). 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 Connecticut, obtain a certificate of good standing from your home state to submit during the foreign qualification process. The certificate cannot be more than 90 days old when filing foreign qualification documents.
    How to Apply:	Domestic Applicants: File entity formation documents with the Connecticut Secretary of State. Submit a Charitable Organization Registration Application and all required attachments to the Connecticut Department of Consumer Protection. Foreign Applicants: Determine whether or not your charity will need to foreign qualify based on your activity in Connecticut. If not required, skip to number 3. File foreign qualification documents with the Connecticut Secretary of State. Submit a Charitable Organization Registration Application and all required attachments to the Connecticut Department of Consumer Protection.
    Required Attachments:	IRS form 990 Either IRS determination letter or IRS form 1023/1024

    Registration Renewal

    More Details

    Form:	Charitable Organization Renewal Notice
    Filing Method:	Mail or online.
    Agency Fee:	$50
    Due:	Annually by the last day of the 11th month after the organization’s fiscal year ends. For example, organizations with December fiscal year-ends are due by November 30. 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:	No extensions are available for charitable registration due dates.
    Original Ink:	Not required
    Notarization Required?:	Not required
    Penalties:	$25/month late fee Charities that do not renew their registration within 6 months of its expiration will need to go through the reinstatement process
    Notes:	Renewal notices (forms) are sent in the mail approximately 30-45 days prior to the expiration date. The renewal notice will include a Fast Track Renewal PIN and License Number. The "Fast Track" renewal is a simplified form for licenses that are in good standing.

    Contract Filing

    More Details

    Filing Method:	Email to dcp.publiccharities@ct.gov
    Agency Fee:	$0
    Turnaround:	1-2 business days
    Due:	Every charitable organization which agrees to permit a charitable sales promotion to be conducted in its behalf, shall obtain a written agreement from the commercial coventurer and submit a copy of such agreement to the Department of Consumer Protection not less than ten days prior to the commencement of the charitable sales promotion within this state.
    Law:	Connecticut General Statutes § 21a-190g
    Notes:	Contracts, at a minimum, must include: The goods or services to be offered to the public; The geographic area where, and the starting and final date when, such 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 per cent per unit of goods or services purchased or used that is to benefit the charitable organization; A provision for a final accounting on a per unit basis to be given by the commercial coventurer to the charitable organization and the date when 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

    More Details

    Filing Method:	Online
    Agency Fee:	$50 re-registration fee If an organization has not been soliciting since the registrations expiration then no late fees or penalties will be applicable
    Penalties:	Charities suspected of violating the Connecticut Solicitation of Charitable Funds Act are subject to an investigation by the Department of Consumer Protection who may deny, suspend, or revoke an organization's registration. Upon application from the Attorney General, the Superior Court may issue one of the following judgments:  civil penalty of up to $2,500 per violation (for wilful violations) temporary or permanent injunction appoint receiver restitution accounting to ensure the due application of funds Charities who solicit without a valid registration will pay a penalty fee of $25/month (maximum $300). Knowingly violating this section is punishable by a fine of up to $5,000 and/or imprisonment for up to 1 year.
    Notes:	Charities can renew a late registration for up to 6 months past its expiration date and then they must go through the reinstatement process.
    Required Attachments:	All IRS Form(s) 990, 990EZ, 990N, or 990PF for all years since the expiration date in which solicitation took place Audit reports if the IRS Form 990 reports more than $500,000 in gross revenue for the year being reported (only years in which solicitations took place)

    Change of Fiscal Year

    More Details

    Notes:

    Fiscal year can be changed during the standard renewal process. Submit the last 990 prior to change and include the short year 990 as well.

    Cancelation

    More Details

    Agency Fee:	$0
    Notes:	Closing a charity registration is optional in Connecticut. The state will accept a letter stating intent to withdraw, but charities can also simply allow their registration to expire. You may also request immediate inactivation on the state's portal.

    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.

    You can also obtain Connecticut licenses by starting at Connecticut’s License Info Center (CLIC), and use their "Starting a Business Checklist" to identify licensing requirements.

    In Connecticut, obtaining a bingo permit is overseen by the Department of Consumer Protection - Charitable Game - Bingo section. If your organization has never conducted bingo in the past, it must complete a CGB-1, CGB-4 and CGB-4B application, a Bingo Price Sheet and a Bingo Prize sheet.

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 Connecticut nonprofit compliance guide to learn more!

Continue reading "Connecticut Nonprofit Compliance"

Harbor Compliance® proudly partners with The Alliance: The Voice of Community Nonprofits to provide insightful resources and compliance solutions to nonprofits in Connecticut.

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