State Requirements and Forms
Articles of Incorporation – Your nonprofit corporation must establish Articles of Incorporation and file them with the Secretary of State. Among other items, the Articles of Incorporation must include the following information (see 13-B MRSA § 403 for a complete list of requirements):
- Name of Organization – You must choose a name that is not identical or deceptively similar to an already existing nonprofit or for-profit corporation in Maine. The names of already existing nonprofit corporations can be found online at www.informe.org/icrs/ICRS (click on “Corporate Search”.
- Purposes of the Organization – The purposes may be similar to the mission statement, or may be a broader statement of charitable purposes.
- Registered Agent (aka Clerk) – All nonprofit corporations must appoint a registered agent. Any change of the registered agent must be filed with the Secretary of State within 30 days of the change.
- Whether the Organization Will Have Members – An organization may or may not have members. That is a decision the incorporators need to make from the outset, and can depend on several different factors.
Bylaws – Your non-profit corporation must establish a set of Bylaws. For more on the purpose of the Bylaws, see Ten Tips for Forming a Maine 501(c)(3) Corporation.
Organizational Meeting – After the incorporators have filed the Articles of Corporation, it is time to hold the Organizational Meeting. Minutes should be taken at this meeting and at all future meetings. At this meeting, the following key measures should be taken:
- Adopt bylaws.
- Elect Directors and Officers.
- Authorize the application for Federal IRS tax exempt status.
- Adopt a conflict of interest policy
- Authorize a corporate bank account.
- Authorize the payment of organizing expenses and filing fees.
Annual Report – All non-profit corporations must file an Annual Report by June 1 of each year (although the Secretary of State requests filings by April 1). There is a $35 filing fee, as well as a $25 late fee for filings received after June 1. You may file the Annual Report online at www.informe.org/aro/index_on.html.
Board of Directors – The Annual Report is where you list the corporation’s current board of directors. The board must be comprised of at least three individuals, two of whom are not “financially interested” in the corporation (i.e., receiving compensation).
Workers Compensation – A corporation with one or more employees generally must obtain workers compensation insurance.
State Unemployment Tax – Most 501(c)(3) corporations that employ four (4) or more persons in one day in twenty (20) different weeks in a calendar year must pay a State Unemployment Tax. 26 M.R.S.A. § 1043(11)(A-1)(3). When your corporation reaches this size, go to the Maine Department of Labor’s unemployment tax website (https://reemployme.maine.gov/accessme/faces/login/login.xhtml) to download the appropriate registration form.
Requirements, Forms and Fees for Incorporating a Nonprofit Corporation in Maine
STATE FUNDRAISING REQUIREMENTS
Charitable Solicitation License
Overview – Most Maine nonprofit corporations must file either an Application for Exemption or a Registration Statement with the Department of Professional and Financial Regulation. 9 M.R.S.A. § 5001 et seq. Unless the corporation falls within any of the exemption listed below, it must file registration statement needs to obtain a license from the Department of Professional and Financial Regulation. There is an annual registration fee of $20 and a one-time application fee of $20. The registration applications may be downloaded from the Department’s website at https://www.maine.gov/pfr/professionallicensing/professions/charitable/organization.html. The application must include a Form 990, 990-EZ or 990-N and an audited financial report, if one exists, or a balance sheet identifying assets and liabilities and an income statement identifying revenues and expenditures. For further assistance you may call the Department’s Licensure Division at 207-624-8603.
Exceptions – Under 5 M.R.S.A. § 5006, the following corporations are exempt from the registration requirement and do not need to file anything in Maine:
- Under $35,000 or 35 Persons Corporations – This exception can be a bit complicated, so I quote the statute directly: “Charitable corporations that do not intend to solicit and receive and do not actually solicit or receive contributions from the public in excess of $35,000 during a calendar year or do not receive contributions from more than 35 persons during a calendar year, if all fund-raising activities are carried on by persons who are unpaid for their services and if no part of the assets or income inures to the benefit of or is paid to any officer or member. If a charitable organization that does not intend to solicit or receive contributions from the public in excess of $35,000 during a calendar year does actually solicit or receive contributions in excess of that amount, whether or not all such contributions are received during a calendar year, the charitable organization shall, within 30 days after the date contributions reach $35,000, register with and report to the Office of Licensing and Registration as required by this Act.”
- Corporations that solicit funds primarily from members and the solicitation is conducted by the members.
- Religious corporations.
- Educational institutions that have Maine Department of Education-approved curricula.
- Nonprofit hospitals.
Professional Fundraising Requirements Licensing – A variety of requirements apply to the work of professional fundraisers. First off, professional fundraisers must be licensed with the Maine Department of Professional and Financial Regulation, Office of Licensing and Registration. Make sure that any fundraiser your corporation is considering hiring has obtained this license.
In addition, a charity’s agreement to hire a professional fundraiser must be executed in writing and retained in the charity’s office for a period of at least three years. Although additional requirements, such as an annual report, pertain to the professional fundraiser, it is useful for the charity to have a basic understanding of these requirements, so as to avoid any problems if a donation is challenged down the road.
Requirements, Forms and Fees for Incorporating a Nonprofit Corporation in Maine
FEDERAL REQUIREMENTS AND FORMS
Obtain an EIN – Every nonprofit corporation must obtain a federal Employer Identification Number (EIN). This is simply a means of identifying the organization for tax and other purposes. Corporations may apply online for an EIN. Go to http://www.irs.gov/businesses/small/article/0,,id=102767,00.html. You can also request an EIN by calling (800) 829-4933. The call may take anywhere from 15 minutes during off-peak times to over an hour during peak times.
IRS Form 1023 or 1023-EZ – To apply for recognition of tax-exempt status, the corporation must file Form 1023 or 1023-EZ application for a determination letter. The 1023-EZ is a streamlined version that is available to certain smaller organizations generally having less than $50,000 per year in revenue, along with other requirements. The fee for submitting Form 1023 is $600, and the fee for the 1023-EZ is $275. Even if your corporation is not required to apply for 501(c)(3) status (e.g., if its annual gross receipts are below $5,000), it is nevertheless recommended, as many funding sources will only contribute to recognized 501(c)(3) organizations.
IRS Form 990 – Annual information return for exempt organizations. If your organization has more than $50,000 in revenue during your tax year, it must file Form 990. You might also qualify to file Form 990-EZ, which is a simplified version generally used by organizations with gross receipts normally less than $200,000 and assets under $500,000. If your organization is a private foundation, it should file Form 990-PF. The forms are generally due by May 15 if the organization’s fiscal year ends on December 31, although two three-month extensions are generally available if requested on time. All of these forms can be downloaded from www.irs.gov. If the organization averages below $50,000 in revenue, it must file the online Form 990-N.
IRS Form 5768 – Election to Make Expenditures to Influence Legislation. Although not a requirement, it is often a good idea for your organization to file Form 5768, especially if you intend to engage in lobbying of federal, state, or local government officials.
USPS Forms 3624 — Federal Nonprofit Mailing Permit. This permit qualifies your organization for lower rates on bulk mailings. Note that it will be worthwhile only if your organization expects to make regular mailings to more than 200 recipients. Forms are available at most big post offices or online at http://pe.usps.gov/cpim/ftp/pubs/Pub417/Pub417.pdf.
IRS Form 1099-MISC – An organization must file an IRS 1099-MISC whenever it pays a person $600 or more in a fiscal year for: (1) rents; (2) royalties; (3) commissions and fees; (4) prizes and awards (nonemployees); and (5) other income. If an organization pays a nonemployee more than $600 in a fiscal year, it must file an IRS Form 1099-NEC.
Federal Payroll Tax Documents – A corporation with one or more employees must pay certain federal payroll taxes and make federal and state withholdings on employees’ wages. Among the necessary forms are the W-2/W-3 and the quarterly IRS Form 941.
Please Note: This information is provided for educational purposes only and is not intended to be legal advice. Individuals and groups are encouraged to retain the services of a licensed attorney to help them with specific issues.