How to Incorporate a Nonprofit in Connecticut

Choose a name for your nonprofit

The name you choose for your nonprofit organization should be unique and reflect your organization’s mission. It is essential to pick a good name since it will be your first impression on the public.

Like other business types in Connecticut, nonprofits can reserve their name for up to 120 days. This reservation gives them ample time to complete the incorporation process without risking losing the name.

Appoint a board of directors

Nonprofits will need a board of directors who will be responsible for overseeing the organization. In Connecticut, you need at least three directors who care about your mission and want to help guide your nonprofit.

Filing the Nonstock Certificate of Incorporation

The next step in the incorporation of your business is filing the Nonstock Certificate of Incorporation. This document tells the government about your organization’s name, address, and mission. As of 2024, filing this document has a filing fee of $50.

Create and adopt bylaws for your nonprofit

Bylaws are the rules that govern how to make decisions for your nonprofit. Connecticut does not require businesses to have these laws, but creating them helps regulate business functions.

Hold your first board meeting

Once you draft the company’s corporate bylaws, its board of directors must accept them. Holding a meeting with the board will need to be done to adopt the bylaws and elect officers. This meeting and the decisions made during it establish the framework for the future operations of your nonprofit.

Receive your Employer Identification Number (EIN)

All businesses need an Employer Identification Number from the IRS. This number allows nonprofits to open business bank accounts, file taxes, or apply for tax-exempt status. These functions are necessary if a nonprofit wishes to save money and remain in good legal standing.

Apply for Federal Tax-Exempt Status

The IRS often gives nonprofit organizations a tax-exempt status. However, they must apply for the status rather than being granted it upon creation. Companies must file Form 1023-EZ or Form 1023 to apply for tax-exempt status. Form 1023-EZ has more strict qualifications than Form 1023. Review the Eligibility Worksheet at the end of Form 1023-EZ to check eligibility.

As of 2024, the application fee ranges from $275 for Form 1023-EZ to $600 for Form 1023. If approved, your nonprofit will be exempt from federal taxes and can accept tax-deductible donations.

Register as a charity and for state taxes

You may be required to register for state taxes to operate in Connecticut. Nonprofits must register with the Connecticut Department of Revenue Services and make payments using their myconneCT portal. 

Registering as a charitable organization with the Connecticut Department of Consumer Protection as a charitable organization can also be beneficial to nonprofits who wish to hold fundraisers.

• Credibility and trust: Government-recognised nonprofits are often considered more professional and trustworthy. People are more willing to donate to a nonprofit’s cause if they know the company will use the money for its intended purpose.
• Limited liability protection: Incorporated nonprofits offer the owner’s assets more protection. If the business encounters legal trouble, the business owner’s possessions will be safe from collection.

• Tax-exempt status: If the IRS recognizes your nonprofit as tax-exempt, your business doesn’t need to pay federal income taxes. Your donors also benefit from this, as their donations will be deductible from their taxes.
• More access to grants and funding: Incorporated nonprofits have more grants and funding opportunities.