Forming a Nonprofit Organization in the Commonwealth of Pennsylvania
After obtaining an EIN for your group, your next step is to form a corporation with nonprofit status. Nonprofit corporations are defined by the Pennsylvania Department of Revenue as those whose members or shareholders may not receive any of the pecuniary (i.e., financial) profits of the organization. The procedure to form a corporation with nonprofit status in the Commonwealth of Pennsylvania requires two forms to be filed with the state Bureau of Corporations and Charitable Organizations: an Articles of Incorporation document and a docketing statement (PA form.
The Articles of Incorporation form (link to PA form DCSB 15-5306-7102B) requires the following information (items 1 to 10 labeled as such on the form):
- 1.The name of the corporation. The name chosen for the organization must be available for use, meaning that it has not already been taken by another business or nonprofit in the Commonwealth. To determine if the name you want to use for your AVO is already taken and therefore not available, you can enter it into Pennsylvania's database of names that have already been reserved at: https://www.corporations.pa.gov/Search/CorpSearch
- 2.The address of the corporation. The initial registered address requires the street and number. A post office box alone is not acceptable. Of course, many AVOs do not have a physical location with a mailing address. There are two options in this case: 1) use the home or business address of one of the organizers; or 2) use a Commercial Registered Office Provider's (CROP). A CROP can be used by an AVO to provide a registered address in any document filed in the Department of State in lieu of providing a registered office address. Info on obtaining a CROP can be found at: http://www.portal.state.pa.us/portal/server.pt/community/corporations/12457/xxx_-_commercial_registered_office_provider/571862
- 3.The purpose of the non-profit corporation. You will need to provide a stated purpose of the nonprofit corporation that is one of the approved purposes allowed by the state. Section 5301 of the Pennsylvania Code lists the following or similar lawful purposes: Athletic; A lawful business purpose to be conducted on a not-for-profit basis: Beneficial; Benevolent; Cemetery; Charitable; Civic; Control of fire; Cultural; Educational; Encouragement of agriculture or horticulture; Fraternal; Health; Literary; Missionary; Musical; Mutual improvement; Patriotic; Political; Prevention of cruelty to persons or animals; Professional, commercial, industrial, trade, service or business associations; Promotion of the arts; Protection of natural resources; Religious; Research; Scientific; and Social. Note: In Pennsylvania, an AVO corporation must be able to fulfill its purpose without any financial benefit to the members except for reimbursement of reasonable expenses incurred in the performance of approved AVO activities.
- 4.A statement is included on the PA form indicating that the corporation is one that does not contemplate a pecuniary gain or profit, incidental or otherwise. Signing the form acknowledges the applicant agrees to this requirement.
- 5.The AVOs will be organized on a non-stock basis and there is a place on the form to check that this is so.
- 6.There is a place on the form to strike out one of the following statements that will not apply to the AVO: "The corporation shall have no members." or "The incorporators constitute a majority of the members of the committee authorized to incorporate by the requisite vote required by the organic law of the association for the amendment of such organic law." The AVO must decide whether there will be members or not. If not the AVO is governed solely by the board of directors. Most AVOs do not decide to have members but this is a complex issue and you should consult an attorney if there is any doubt.
- 7.Item 7 on the form does not typically apply to AVOs. It is for coops.
- 8.The names and addresses of the incorporator(s) must be listed. Note: These individuals do not have to be on the board of the AVO but must be authorized to file the articles of incorporation by the AVO. You can determine the first directors before the application or defer to a future election at the initial organizational meeting of the AVO after incorporation.
- 9.The date that the AVO wants the incorporation to be effective needs to be specified.
- 10.In addition to the preceding 9 items required by the Commonwealth of Pennsylvania, the AVO can include additional provisions of the articles of incorporation. At minimum, the following three provisions must be included, per the IRS, for the AVO to be considered for tax-exempt status:
- "Said corporation is organized exclusively for charitable, religious, educational, and scientific purposes, including, for such purposes, the making of distributions to organizations that qualify as exempt organizations under section 501(c)(3) of the Internal Revenue Code, or the corresponding section of any future federal tax code.
- No part of the net earnings of the corporation shall inure to the benefit of, or be distributable to its members, trustees, officers, or other private persons, except that the corporation shall be authorized and empowered to pay reasonable compensation for services rendered and to make payments and distributions in furtherance of the purposes set forth in Article Third hereof. No substantial part of the activities of the corporation shall be the carrying on of propaganda, or otherwise attempting to influence legislation, and the corporation shall not participate in, or intervene in (including the publishing or distribution of statements) any political campaign on behalf of or in opposition to any candidate for public office. Notwithstanding any other provision of these articles, the corporation shall not carry on any other activities not permitted to be carried on (a) by a corporation exempt from federal income tax under section 501(c)(3) of the Internal Revenue Code, or the corresponding section of any future federal tax code, or (b) by a corporation, contributions to which are deductible under section 170(c)(2) of the Internal Revenue Code, or the corresponding section of any future federal tax code.
- Upon the dissolution of the corporation, assets shall be distributed for one or more exempt purposes within the meaning of section 501(c)(3) of the Internal Revenue Code, or the corresponding section of any future federal tax code, or shall be distributed to the federal government, or to a state or local government, for a public purpose. Any such assets not so disposed of shall be disposed of by a Court of Competent Jurisdiction of the county in which the principal office of the corporation is then located, exclusively for such purposes or to such organization or organizations, as said Court shall determine, which are organized and operated exclusively for such purposes."
To complete the Pennsylvania Articles of Incorporation-Nonprofit form DCSB 15-5306-7102B, the incorporators must sign their names. Finally, publication of either the intent to file or the actual filing of the Articles of Incorporation must be made in two newspapers of general circulation, one a legal journal if possible. You need to advertise your corporation's name, statement that the corporation will be or already has been incorporated, a summary of your corporation's purpose, and a date that you either did file or intend to file for incorporation. If there is only one local paper, that will be sufficient. To determine publications that are legal journals, consult the geographic listing of legal journals found on the Pennsylvania Department of State's website that can be found at: http://www.portal.state.pa.us/portal/server.pt/community/corporations/12457/x_geographical_listing_of_legal_publications/571893 Proofs of publication must be filed with the meeting minutes of the corporation.
The completed Articles of Incorporation should be accompanied by one copy of form DSCB: 15-134A, Docketing Statement. Form DSCB: 15-134A requires a replication of some of the information provided in the Articles of Incorporation form: the entity name, the name and mailing address of the individual responsible for initial tax reports, a description of business activity, a specified effective date, the EIN, and the date of the entity's fiscal year end. The link to form DSCB: 15-134A is: https://www.portal.state.pa.us/portal/server.pt/document/488546/134a_pdf
Once the Articles of Incorporation and Docketing Statement have been completed, they are submitted with the filing fee of $125 payable to the Commonwealth of Pennsylvania. The address to which to submit the documents is:
- Department of State
- Bureau of Corporations and Charitable Organizations
- P.O. Box 8722
- Harrisburg, PA 17105-8722