How to Form a Nonprofit in Georgia

Choose a name for your nonprofit

One of the most essential steps new business owners must take is choosing a name for their nonprofit. The chosen name must be unique to your organization while reflecting its mission and goals. Be sure to pick something memorable and appropriate since this name will be the public’s first impression of your business.

Nonprofits in Georgia can reserve their name for a maximum of 30 days for a fee of $25. This reservation is optional but highly recommended to prevent the name from being taken during incorporation.

Appoint a board of directors

Nonprofits operating in Georgia must have a board of directors who oversee business activities. This board must have at least one member, though it is recommended to have more than one. Having more people on the board of directors gives the business access to more ideas and perspectives, allowing for better decision-making opportunities.

Filing the Articles of Incorporation

Business owners who incorporate in Georgia are required to file the Articles of Incorporation. The Articles of Incorporation tell the government about your organization and establish it as a separate entity. Information that you should provide should include your organization’s name, corporate mission, address, and registered agent information. 

Completing and filing this document costs $110 through mail and $100 online. 

Create policies and bylaws

Nonprofit businesses in Georgia must create corporate bylaws that describe how the nonprofit will operate. These bylaws aim to make business operations more precise and consistent.

Once you draft your bylaws, you must meet with the company’s board of directors to approve and adopt them. The directors will also vote on the nonprofit’s officers during this meeting. This gathering will play an essential role in shaping how the nonprofit operates.

Receive your Employer Identification Number (EIN)

Like owners of other business entities, nonprofit owners need to apply for an Employer Identification Number before operating. The IRS gives this number to businesses, which you will need for specific business activities, such as applying for tax-exempt status.

Apply for federal tax-exempt status

Nonprofit organizations are not tax-exempt by default. Before receiving this status, you must file Form 1023-EZ or Form 1023 with the IRS. Form 1023-EZ is cheaper to file and designed for smaller-scale nonprofit organizations. To determine if you fit the qualifications to file Form 1023-EZ, view the Eligibility Worksheet at the end of the form.

The application for Form 1023 costs $600, while 1023-EZ is $275 as of 2024. It will be tax-exempt once you complete the application and the IRS approves your nonprofit.

Nonprofits should also apply to be exempt from state sales and use taxes. To apply for this status in Georgia, nonprofit owners must file Form ST-5 with the Georgia Department of Revenue.

Apply for business licenses

Nonprofits in Georgia may be required to apply for specific business licenses depending on their fundraising activities. For example, a nonprofit that sells alcohol during an event will need a Special Event Non-Profit License. Check with Georgia’s Secretary of State for more information on necessary licensing and permits.

Submit annual registration document

Nonprofits in Georgia must file an annual report to update the government on any changes in the business. This report includes the company control number or name, address, current registered agent information, name of the person filing the report, information on each business officer, and the business’s mailing address. You can file the annual registration online for $30 or by mail for $40.

• Credibility: The government officially recognizes incorporated nonprofits, making them more trustworthy. These nonprofits have more access to support since donors are more likely to donate to a credible nonprofit.
• Access to funding: Nonprofits often gain access to a broader range of grant and funding opportunities. Additionally, as mentioned earlier, incorporation enhances a nonprofit’s credibility. This increased trust can encourage individuals, businesses, and institutions to contribute more significantly since they know the company will use their donations responsibly.

• Tax-exempt status: Tax-exempt nonprofits don’t pay federal income taxes, allowing more funds for their mission. Donors benefit, too, as contributions are often tax-deductible, reducing taxable income. This system boosts nonprofit funding and rewards donor generosity, fostering community support.
• Limited liability protection: Nonprofits, like other incorporated businesses, protect owners’ assets by making the company a separate entity. This protection prevents the owner’s assets from being taken to pay off organizational debts or legal issues.