A nonprofit organization is a type of corporation that exists to serve a public good. To form a Delaware Nonprofit, you’ll have to file formation paperwork with the Delaware Division of Corporations and pay the associated fee of $109.
You can follow D.I.Y. Guide to Forming a Nonprofit in Delaware below.
Or, we can form your Delaware Nonprofit for you! For $45 (plus state fees), we’ll submit your formation paperwork and provide a year of our $29 Delaware registered agent service. Plus, you’ll get a secure online account and attorney-drafted corporate bylaws for FREE.
Eager to learn more? This page covers:
- What is a Delaware Nonprofit?
- Reasons to Form a Nonprofit Organization
- Benefits of Incorporating a Nonprofit in Delaware
- D.I.Y. Guide to Forming a Nonprofit in Delaware
- FAQ: Delaware Nonprofit
- Why Form a DE Nonprofit with a Registered Agent
What is a Delaware Nonprofit?
Nonprofit organizations, also known as charitable organizations, are businesses that exist for a collective, social, or public good. Unlike traditional corporations, which typically grow profits to benefit the business, nonprofits don’t seek profits for self-gain. Instead, any profits that come through the organization (usually through grants or donations) are distributed to a cause that benefits a public good. In exchange, qualifying nonprofit organizations receive tax exemptions.
Reasons to Form a Nonprofit Organization
You might consider forming a nonprofit organization if:
1. Your business exists to benefit a public good.
According to IRS (Exempt Purposes – Internal Revenue Code § 501(c)(3)), the various reasons why a company could qualify as tax exempt with 501(c)(3) status includes:
- Charitable
- Religious
- Educational
- Scientific
- Literary
- Testing for public safety
- Fostering national or international amateur sports competition
- Preventing cruelty to children or animals
While the vast majority of nonprofits operating in the U.S. fall under IRS code 501(c)(3), there are several other types of nonprofits that also qualify for tax exemptions. These include: social welfare organizations, social clubs, fraternal societies, employee benefit associations, and veterans’ organizations.
For more information, see: Types of Tax-Exempt Organizations.
2. You want to benefit from tax-exempt status.
From a business perspective, this is the number-one reason to register your business as a nonprofit. Why pay taxes if you don’t have to? As long as your company qualifies, you can avoid paying federal and state income tax in Delaware by applying for tax-exempt status with the IRS.
Benefits of Incorporating a Nonprofit in Delaware
In Delaware, a nonprofit organization is granted some of the same privileges as a traditional Delaware Corporation. These include:
1. Simplicity and Security
Because of their tax-exempt status, nonprofit corporations are required to report more information each year than Delaware LLCs and even traditional Delaware Corporations. However, the state of Delaware makes forming a nonprofit as easy as possible, requiring minimal personal information on state filings.
2. Corporate Laws and the Court of Chancery
Businesses flock to Delaware in large part because of our business-friendly laws. We’re the only state in the nation that has an entire court system dedicated to hearing business cases. It’s called the Court of Chancery. One of the major benefits of a business court is ease and efficiency when it comes to legal matters.
- Long Case History. The court has a long history of case files strictly pertaining to business decisions, which makes it easy for a judge to reference the state’s legal history and quickly decide cases.
- Quick Decisions. Trials are ruled by a judge, not a jury, which helps speed things up.
- Favorable to Business. The court often rules in favor of businesses, which doesn’t always happen in traditional court systems in other states.
3. Easy Maintenance
Annual reports for DE nonprofit corporations are due the same day year after year (March 1), which make it easy to track when yours is due. Plus, because our state requires a minimal amount of information, your report can be filed quickly and easily.
Form Your Delaware Nonprofit Today!
D.I.Y. Guide to Forming a Nonprofit in Delaware
To get your Delaware Nonprofit, you’ll have to file what’s known as a Certificate of Incorporation. There are a few extra steps along the way:
- Secure Your Business Name
- Get a Delaware Registered Agent
- Complete a Certificate of Incorporation
- Apply for Tax-Exempt Status with the IRS
1. Secure Your Business Name
You might already have the perfect name picked out for your business, but if that name is already being used by a company registered with the Delaware Division of Corporations (DDC), the you won’t be able to use it. According to 8 DE Code § 102, your business name must be distinguishable on the public record. If you submit a Certificate of Incorporation with a business name that’s already in use, your application will be rejected.
To make sure your name is available before you apply, plug it into the state’s Entity Name Search and see if it (or something similar) pops up. If not, the name is all yours!
2. Get a Delaware Registered Agent
Every company registered with the DDC needs a Delaware Registered Agent—including Nonprofit Corporations. Your registered agent is the person or entity that accepts important legal documents on your behalf, then forwards them to you in a timely manner. It’s an important job, so best not to leave it to just anyone.
As professional registered agents, it’s our job to serve you these documents, and we take it seriously. We provide fast service and give you an online account so you can access your documents right away, and even return to them whenever you need to.
3. Complete a Certificate of Incorporation
Delaware is a little different than most states in that you won’t submit formation paperwork for a “Delaware Nonprofit,” instead you’ll want to file as an Exempt Corporation. (Note that Delaware also recognizes Non-Stock Corporations, but this is NOT the same as an Exempt Corporation and is NOT recognized as a non-exempt entity.) Here’s what you’ll need to include:
- Name of corporation
- Name and address of your DE registered agent
- Language that specifies your organization’s activities*
- Specify that your corporation shall not have any capital stock.
- List the conditions of membership, or specify that they will be listed in your corporation’s bylaws.
- Name and mailing address for your Incorporator (the person filing this paperwork)
*The activities listed must be limited to those activities accepted by IRS code 501(c)(3)—or whatever tax-exempt status you’re seeking. This step is important since the IRS will reject your tax-exempt status if you do not include this language in your Certificate of Incorporation.
4. Apply for Tax-Exempt Status with the IRS
Once your Nonprofit Corporation is formed in the state of Delaware, you can apply for tax-exempt status with the IRS. Just make sure your formation documents include language that restricts your business activities to those that qualify for an IRS exemption status. (See above.) You can submit your application to the IRS directly, online, using Form 1023. If you own a small business and don’t expect to take in more that $50,000 in annual gross receipts, you can use Form 1023-EZ.
Note that these forms are for those applying for 501(c)(3) status. If your organization qualifies for a different type of tax-exempt status, you may need to use another form. (See: Applying for Tax-Exempt Status.)
FAQ: Delaware Nonprofit
- How much does it cost to register a nonprofit in Delaware?
- Do I have to file a BOI report for my Delaware Nonprofit?
- What are the requirements for a nonprofit organization in Delaware?
- How many board members does a 501(c)(3) need in Delaware?
How much does it cost to register a non-profit in Delaware?
The state charges a filing fee of $109 for nonprofit formation. There’s also a $9 per page fee if additional pages are needed. (When we file your Delaware Nonprofit, we add an extra page to include 501 language, so state fees total $118.) If you form your nonprofit yourself, keep in mind you’ll also have an ongoing filing fee of $25 per year for your annual report, plus any potential registered agent fees.
With our low $45 filing fee and best-price-in-the-state $29/year registered agent service, you’ll pay just $192 out the door when you hire us to form your Delaware Nonprofit!
Do I have to file a BOI report for my Delaware Nonprofit?
Nonprofit organizations with 501(c)(3) status are not required to file a Beneficial Ownership Information (BOI) report.
However, if you form your Delaware Nonprofit and don’t receive your tax-exempt status from the IRS within 30 days*, technically you must submit a BOI report for your business. Once you obtain tax-exempt status, you can file an updated BOI report online, indicating your new status.
*90 days, if you form your company anytime in 2024
What are the requirements for a nonprofit organization in Delaware?
The state of Delaware doesn’t provide specific statutes for nonprofit organizations. That means Delaware Nonprofits must follow the same rules as corporations (see: 8 DE Code). That said, you’ll need to form an “Exempt Corporation” in order to officially operate as a nonprofit, rather than a standard corporation.
How many board members does a 501(c)(3) need in Delaware?
The state of Delaware only requires corporations to have one board member. However, the IRS requirements for non-exempt status are a little different. In general, the IRS looks down on nonprofits that have either too few or too many board members. Although this isn’t precise, it’s a good idea to have at least three people on your nonprofit board (see: Governance and Related Topics – 501(c)(3) Organizations).
Why Form a DE Nonprofit with a Registered Agent
As professional registered agents located right here in Delaware, we not only have knowledge of business processes, we’re also experts when it comes to our state. We’ll make sure your business is registered with the Delaware Division of Corporations quickly, AND we’ll provide you with registered agent service and a ongoing support.
Plus, we’ll be with you for the lifetime of your business and can provide additional services as your business expands: