A nonprofit's leaders file for incorporation with the government in the state it is located. The incorporation process requires nonprofits to provide information on how and for what purpose they are organized. After a nonprofit files its articles of incorporation, it becomes a legal entity, separate from the individuals who run the nonprofit. Incorporation gives them limited personal liability from lawsuits and allows the nonprofit to apply to the Internal Revenue Service for tax-exempt status.
A department within a secretary of state's office usually handles incorporation filings. Although requirements vary among states, there are some basic requirements for incorporation. Among them are that the nonprofit name an individual as its registered agent in the state in which it is incorporating. The purpose of the registered agent is to provide a legal, physical address where a lawsuit can be served, if necessary, and to receive official communications from the state on the nonprofit's behalf, such as tax notices.
Although a registered agent is the person who can be served with lawsuit papers, that does not mean the registered agent himself is being sued. The agent's responsibility is to tell the nonprofit's board of directors that the nonprofit is being sued and to keep the board informed of communications from the state.
Physical Street Address
Requirements for who can be a registered agent varies somewhat among states. Depending on the state, the registered agent may be a director or officer of the nonprofit or may just be someone who resides in the state. Some nonprofits use the attorney that helps them with the incorporating process as their registered agent. In any case, the registered agent must provide a street address where he is physically located, not a post office box. The nonprofit can not act as its own registered agent.
Doing Business in Another State
The registered agent must reside in the state in which the nonprofit is incorporating. If a nonprofit has its headquarters in one state, but does business in another state and decides to incorporate there, it must name a registered agent in the state in which it is incorporating. To fulfill this requirement, nonprofits sometimes purchase the services of a registered agent from a registered-agent service.
Nonprofits must keep the state government informed of whether their registered agent or her address has changed. Failing to meet this requirement can potentially cause the nonprofit to have its incorporation status revoked. States have different guidelines on this. For example, the state of Vermont gives nonprofits 120 days to notify the secretary of state's office that the registered agent or his address has changed.
Registered agents can resign. How this is handled varies by state. In Vermont, for example, a registered agent resigns at any time by informing the Secretary of State's Corporations Division in writing.
Located in the mid-Atlantic United States, Elizabeth Layne has covered nonprofits and philanthropy since 1997, and has written articles on an array of topics for small businesses and career-seekers. An award-winning writer, her work has appeared in "The Chronicle of Philanthropy" newspaper and "Worth" magazine. Layne holds a Bachelor of Arts in journalism from The George Washington University.