How to Form a Louisiana Nonprofit Corporation in 2023

What is a Nonprofit Corporation?

A nonprofit and for-profit corporation both have similar “nuts and bolts,” so to speak. Both businesses have a board of directors, CEOs, bylaws, annual board meetings, and the like.

But what makes a nonprofit stand out is its purpose. A business corporation typically organizes for financial gain; a nonprofit exists not to make money but to further a cause or reach a goal. Additionally, a business corporation gains investors by offering stock, which has the incentive of dividends and financial gain. Nonprofit corporations solicit contributions that don’t generate any income for those investors.

Well-known nonprofits include groups like Doctors Without Borders, Alcoholics Anonymous, and even your local YMCA.

It’s important not to confuse “nonprofit” with “no income.” Most nonprofits generate income from donations or day-to-day services. The distinction is that nonprofits use 100% of their income to pay expenses and reinvest in their cause. For example, the YMCA uses member dues and community donations for exercise programs, youth sport development, and maintaining their equipment and facilities. They also pay their employees.

Because of this, nonprofit corporations may apply for and receive a tax-exempt status (typically a 501(c)(3) designation), eliminating the corporation’s responsibility for income taxes at the federal and state levels.

Should you form one?

Before you dive into the rest of this guide, you should do a little soul-searching: should you even form a nonprofit in Louisiana? The goal is a noble one, but it certainly isn’t for everyone. And some concepts simply aren’t right for the nonprofit sector.

Here are some questions to ask:

• Will I be able to convince others to buy into this cause? How hard will it be to attract donors?
• Are there other existing nonprofits with the same goal?
  • If so, do they operate in Louisiana? Nationwide? Should I form a local chapter of their nonprofit instead?
  • Can I further this cause better or differently than they are?
• Can I hire employees for this cause, or will I rely on volunteers? How will I successfully recruit their help?

If you find yourself stumped by any of those questions, you may want to step back and get some help…or simply do some more thinking before diving in. But if you have answers to most of those questions, then you’re well on your way to starting a Louisiana nonprofit organization.

Starting a Louisiana Nonprofit: Step by Step

Technically, the process for creating a Louisiana nonprofit entity is pretty simple. It’s really just a matter of picking a few people and filing some paperwork (it’s the requirements immediately after forming the nonprofit that get complicated).

1. Pick & Claim a Name

Choosing a name is one of the most crucial decisions for starting your business. You want to pick a name that’s memorable, likable, and most importantly, compliant with Louisiana state law.

Louisiana has pretty simple laws for nonprofit names:

• Your name may be any language as long as it is expressed in English characters
• A name may not include immoral, deceptive, or scandalous language
• Your name may not imply that you are (or are affiliated with) an administrative or political agency
• Some words, such as “banker,” “trust,” “credit union,” and so on are prohibited for nonprofit corporation names
• Your name must be “distinguishable upon the records” of the Secretary of State, or distinct from the names of other entities in the state

If you want more information on Louisiana nonprofit names, check out the Corporate Name Section of the Louisiana Revised Statutes.

As a result, you have a lot of leeway to pick a name that will resonate with your target audience, potential donors, and of course, with you. The ideal Louisiana nonprofit name describes what the organization does, sounds good when said out loud, and just “sticks” in the minds of people who see it.

Whenever you pick a potential name, you should check whether it’s available with an Entity Name Search. Typically if you type in your desired name and no exact matches show up, your name is available to use. This seems like a very basic step, but it’s crucial to streamlining your filings.

Once you nail down an available name that you like, you can reserve it using the Reservation of Corporate/Limited Liability Company/L3C/Partnership Name form. This optional filing costs $25 to submit, but once it’s approved, your name will be protected for 120 days. That gives you plenty of time to prepare other business documents without losing your name to another business or nonprofit.

You can learn more through our guide on how to reserve a Louisiana business name.

2. Assemble your initial board

A nonprofit corporation is only as impactful as the people leading it. That’s why your initial board of directors is extremely important; you’ll want to pick a team of people that are just as passionate about your cause as you are.

More importantly, it’s helpful to choose a group with complementary strengths. For example, a medical outreach group might have a board of directors with three doctors, a nurse, a financial expert, a creative visionary, and a lawyer. The right board of directors will help your nonprofit thrive.

Louisiana doesn’t have a bunch of rules about who can serve on the board. The only explicit requirement is that your board must have at least three directors (the only exception to this is if you have fewer than three directors, but your number of directors is the same as your number of members). As long as you meet the minimum requirements, your bylaws can set all other terms for how many directors you’ll have, who they’ll be, their qualifications, how long they’ll serve, and more.

3. Appoint a registered agent

Every Louisiana entity—nonprofits, corporations, and LLCs alike—must appoint a registered agent. This individual accepts “service of process” from the state on your behalf. Basically, if the state ever needs to notify you regarding a lawsuit or an upcoming annual report due date, they’ll contact your registered agent. The agent forwards that notice to you.

Louisiana has pretty lenient criteria for a nonprofit’s registered agent, as found in the Office and Agent Section of the Louisiana Revised Statutes:

• Every entity that files with the Secretary of State (both domestic and foreign) must appoint a registered agent
• The agent may be an individual resident of Louisiana OR a business that has authority to operate in the state
• An agent must be continuously maintained

So you might ask, “Can I serve as my nonprofit’s registered agent?” Technically, you can. But we don’t recommend it. That puts your personal details (and often private details like your address and primary email) on the public record. You’ll also be busy running your nonprofit and pursuing your goals; you won’t want to tie yourself down to a registered address (especially for a tedious thing like service of process). We recommend appointing an individual you trust.

Or, if you prefer, you can hire a registered agent service instead. For a small annual fee, these services will act as your agent. That frees you up to focus on running your nonprofit.

4. File your Articles of Incorporation

Up until now, your nonprofit has just been an idea; it’s not recognized by the state government. Technically, businesses don’t “exist” until they file the appropriate paperwork. For Louisiana nonprofits, that means filing the Articles of Incorporation.

This two-page document requires some foundational information about your nonprofit. Here’s the data you’ll need to have on hand:

• The parish where your nonprofit is formed
• The name of your nonprofit
• The stated purpose of your nonprofit
• The duration of the business (usually perpetual)
• Address of your registered office
• Name and address of your registered agent
• Name and address of each incorporator
• Name, address, and term of office for each initial director
• Other provisions you wish to include
• Signature of each incorporator
• A notary signature
• Signature of your registered agent, designating the consent to appointment

All told, this process is pretty simple, but there are a few steps to keep in mind as you proceed. The first step is ensuring that you have your registered agent’s signature. You’ll also need to have your Articles notarized; it’s an easy step, and you can use this tool to find a notary in your postal code.

Aside from that, just be sure to fill out the requested information, and you’re pretty much set to go. If you prefer, you can file this form online through GeauxBiz. No matter how you file, you’ll need to pay the $75 filing fee.

Processing speed: 1-2 business days for online filings, 5-7 for paper filings

Expedited processing: $30 for 24-hour turnaround, $50 for same-day processing

Congratulations! Your nonprofit is now a recognized entity in Louisiana!

Prepare for & Hold Your First Board Meeting

After your Articles of Incorporation form is complete, it’s time to truly get your nonprofit’s activities underway. And that means it’s time for the first board meeting.

No two board meetings will look exactly the same; after all, every nonprofit has different tasks to accomplish. Louisiana does recommend that you have regular meetings, and you’ll need to provide ample notice to your directors if you arrange for a special meeting. But other than that, your bylaws can dictate the ins and outs of your meetings.

For example, your bylaws might require your president and CFO to report on the recent accomplishments and financial standing of the nonprofit. But as long as you’re meeting state requirements and your bylaws’ guidelines, your meetings are up to you.

Your very first board meeting, however, will look a bit different. Here’s what you’ll need to accomplish:

• Draft and approve the nonprofit’s bylaws: The bylaws dictate exactly how your nonprofit will be run. This includes a detailed rundown of your corporate purpose, how your board will be selected and replaced, how you’ll raise funds, how you’ll hire employees or solicit volunteers, and much more (including a provision for how to amend the bylaws). To save time, you may choose to write a draft before the meeting and revise it when your full board is present. The important thing is that the board approves the final bylaws, making them the governing document for your nonprofit.
• Draft and approve a conflict of interest policy: Occasionally, one of your nonprofit’s contributors will have personal affairs that intersect with the activities of your nonprofit. A conflict of interest policy dictates exactly what happens in those situations, protecting both the nonprofit and the individual contributor.
• Appoint someone to take minutes at each meeting: Every Louisiana nonprofit corporation must establish and maintain a corporate record. That’s why every board should appoint someone to take minutes, or a summary of every board meeting, documenting what was said and what decisions were made.
• Finalize responsibilities for each board member: If one board member will be responsible for fundraising while another raises awareness for the cause, you should assign those roles at the initial board meeting.
• Appoint officers for the nonprofit (if needed): Some corporations choose to have their officers, such as the CEO or CFO, be members of the board. Others appoint non-board members to fill these roles, creating a division between the governance and day-to-day operations. Either choice is fine, but these vital roles should be filled.

This initial meeting will be a very full, technical day (or even series of days!), but nailing down these aspects will help you establish a nonprofit that’s compliant with Louisiana state law and efficiently run.

Take Care of Taxes

Taxes as a nonprofit are a tricky beast; frankly, we recommend getting advice from a tax lawyer, accountant, or similar consultant to make sure you cover all your bases! But let’s take a quick look at the basics for nonprofit taxes.

First, apply for tax-exempt status on the federal level

If you don’t file for tax-exempt status, you’ll technically be liable for corporate income taxes. And that’s the last thing a non-profit wants. That’s why you’ll need to start out by filing Form 1023 or Form 1024, which are the applications for charitable, religious, or educational groups and other nonprofits respectively. After that application is completed, you’ll play the waiting game. The IRS can take up to 180 days to approve or reject your application, so we highly recommend completing the application correctly the first time.

Once your application is approved, you’ll receive a letter of tax-exempt status from the IRS. This exemption covers you for both federal and state taxes. In most states, you could also use that exemption letter to apply for an exemption from the state sales tax. However, nonprofits in Louisiana are generally not exempted from sales taxes. For more information on these exemptions, check out the Louisiana Department of Revenue.

Obtain an EIN

An EIN, or an Employer Identification Number, is an important identifier to get; it acts a bit like a Social Security Number, but for a business entity. Unfortunately, you aren’t assigned one automatically.

Thankfully, it’s free to apply for an EIN online with the IRS. Even if you don’t plan to have employees right away, it’s a good idea to have this number from the get-go. Miscellaneous forms, such as license applications or even bank accounts, may request this number.

Account for employment & miscellaneous taxes

No two businesses are alike, so each nonprofit will have slightly different taxes. That said, Louisiana nonprofits with employees will need to account for withholding taxes and unemployment insurance taxes on the federal and state levels, among other things.

There are also miscellaneous industry-specific taxes in Louisiana, such as fees for motor fuel, school readiness, and other areas. In most cases, these taxes won’t apply to your nonprofit, but it’s still a good idea to double-check with the Louisiana Department of Revenue just to be sure you’ve covered all your responsibilities.

That’s the basic gist of nonprofit taxes in Louisiana. We still recommend consulting with a tax professional, as they’ll be able to give you specialized advice for your unique situation.

Register for Licenses and Permits

Licenses and permits are especially important for nonprofits. And there are three major categories of potential permits and licenses: fundraising, lobbying, and licensing. Let’s walk through Louisiana’s requirements for each of those three areas.

1. Fundraising

A lot of states require you to register in order to solicit charitable contributions, and Louisiana is no exception. You’ll need to register with the Louisiana Attorney General. To complete this registration, you’ll need to have a few documents on hand, such as your Articles of Incorporation, your bylaws, your IRS exemption designation letter, and a few other items. The registration fee is $25; keep in mind that you’ll renew this registration every year. As long as you maintain this registration, you can fundraise for your cause.

2. Lobbying

If your nonprofit will be lobbying for its cause in a formal capacity, then you’ll need to ensure that each person lobbying has the appropriate registration. Every lobbyist has to register with the Louisiana Ethics Administration within five days of beginning lobbying or being hired as a lobbyist (whichever comes first). The registration fee is $110.

Lobbyists are also required to submit regular reports of their expenditures. For more information, please check out the Louisiana Ethics Administration Program.

3. General licensing

Nonprofits are tax-exempt, but they aren’t exempt from licensure requirements, whether that’s for an industry-specific license or a state general business license. So you’ll need to get the licenses that apply to your unique organization.

Louisiana, unlike some states, doesn’t have a general business license that every entity in the state needs to get. So most license requirements come at the industry level instead. Louisiana upholds all federally regulated industry licenses, and geauxBIZ is a great place to check out the state-level license requirements. It’s up to you to learn if there are any licenses for your industry, so be sure to complete this step!

Whenever you apply for a license or permit, we recommend inquiring about the requirements for renewing your licenses. That way you’ll know exactly how often you’ll need to renew your licenses (if applicable).

Meet Insurance Requirements

We highly recommend that every business entity maintain at least some sort of general liability policy — even nonprofit entities. There’s always a chance that something can go wrong (no matter how careful you are).

A natural disaster can happen, a break-in might cost you some important equipment, or an accident during day-to-day operations might cause a broken bone and damaged property. A general liability policy will protect your business if something like that happens.

Louisiana state law also requires you to get a workers’ compensation insurance policy if you have one or more employees working for your nonprofit (a few entities are allowed to self-insure). You can learn more about this requirement with the Louisiana Workforce Commission.

Top Resources for Louisiana Nonprofits

Nonprofit work isn’t always easy, but you never have to go it alone! There are dozens, if not hundreds of nonprofit resources available to Louisiana organizations.

On the national level, there’s the National Council of Nonprofits. They exist to advocate for and strengthen nonprofits throughout the country by providing nearly comprehensive resources, teaming up with each state’s nonprofit network, and keeping you aware of the trends in policy and public opinion. It’s also a great place to peruse the latest reports and data about charitable giving and advocacy in the U.S.

On the state level, you can always turn to the Louisiana Alliance for Nonprofits. In their own works, the Alliance promises to “practice and model principles and practices for nonprofit excellence and believe that adherence to such principles and practices lead an organization to a higher level of accomplishment, accountability, and sustainability.” Membership is required, but their inclusive network and resources make joining worth your while.