How to Incorporate as a 501(c)(6)

By Elizabeth Rayne

Section 501(c)(6) of the Internal Revenue Code provides a federal tax exemption for business leagues, chambers of commerce and other professional leagues that are not organized for profit. In order to fall under this exemption, your organization's mission must be to promote the common interest of the organization, and not benefit any particular member. If this describes your organization, there are a number of steps that must be completed to acquire 501(c)(6) status.

Section 501(c)(6) of the Internal Revenue Code provides a federal tax exemption for business leagues, chambers of commerce and other professional leagues that are not organized for profit. In order to fall under this exemption, your organization's mission must be to promote the common interest of the organization, and not benefit any particular member. If this describes your organization, there are a number of steps that must be completed to acquire 501(c)(6) status.

Step 1

Draft Articles of Incorporation for the organization. Include the purpose of your organization, and specify how the assets of the organization will be distributed if the organization dissolves. In order to comply with Internal Revenue Service regulations, state that the assets will be distributed to another 501(c)(6) organization if your organization closes.

Ready to incorporate your business? Get Started Now

Step 2

File the Articles of Incorporation in the state where your organization is located. Visit the website for the Secretary of State and you will likely find the appropriate forms, filing fees and directions for filing. Articles of Incorporation may also be known as a "certificate of incorporation," "charter document" or "articles of organization." Keep a copy of the articles for your records.

Step 3

Download Form 1024 for recognition of exemption from the IRS website. Click on "Charities & Non-Profits," then "Other Non-Profits." From there, click on "Application for Recognition of Exemption," and then "Form 1024." Also download the instructions for the application from the same page.

Step 4

Prepare Form 1024. Select "501(c)(6)" on the first page, and then follow the IRS instructions that you downloaded. Provide as much information as possible about your organization's activities, board members and budget. Be as detailed and clear as possible. Check the "Procedural Checklist" to ensure that you have complied with all filing requirements and have included the appropriate attachments.

Step 5

Submit the application to the IRS. Download Form 8718, User Fee for Exempt Organization Determination Letter Request, to determine the fee and where to file the documents. On the IRS website, type "Form 8718" in the search box and click on the first result. Download the form, and mail Form 1024 to the address listed, along with the required fee.

Step 6

File Form 990 on an annual basis with the IRS. Failure to do so may result in fees or loss of exemption. Include financial information and updates to your organization's activities on the form. Further, check with your state treasurer to find out if there are any filings or taxes that must be made within your state.

Ready to incorporate your business? Get Started Now
California 501C Non Profit Organization Rules

References

Related articles

How to Incorporate & Establish a Club as a Non-Profit 501(c)(3)

To qualify for tax exemption under Section 501(c)(3) of the Internal Revenue Code, your club must have an "exempt purpose". If your club meets one of the required purposes, you may apply to be recognized as a non-profit, tax-exempt organization. To apply for this recognition, additional filings above and beyond initial incorporation filings may be required at the state level, and will be required with the IRS.

How to Start a Nonprofit Group for a Class Reunion

If you are responsible for organizing a class reunion, you have the option to set up the reunion as a nonprofit organization. Organizing as a nonprofit will allow the organizers to open a bank account and avoid personal liability. Further, local businesses may be more likely to donate goods or services to your reunion if it set up as a nonprofit. However, you should be aware of a number of restrictions and filing requirements for nonprofits before organizing as a nonprofit organization.

IRS Filing Rules for 501(c)(5)

Section 501(c)(5) of the Internal Revenue Code provides a tax exemption for labor, agricultural and horticultural organizations. This exemption is awarded to organizations whose primary purpose is to improve the conditions of those engaged in labor, agriculture or horticulture, or improve the products or efficiency in these areas. In order to be recognized by the IRS as a 501(c)(5), the organization must take a number of steps to demonstrate its exempt purpose.

LLCs, Corporations, Patents, Attorney Help

Related articles

How to Become a Non-Profit Group & Incorporate in Massachusetts

Nonprofit organizations receive a number of state and federal tax exemptions, and formalizing the organization at the ...

How to Open a 501(c)(3) Thrift Store in New Jersey

To open a 501(c)(3) thrift store in New Jersey, there are a number of state and federal obligations. Before any ...

How to Apply for Nonprofit Status in New York State

For an organization to be exempt from New York state taxes, it must incorporate as a nonprofit corporation by filing ...

How to Create a 501C3 in California

Although a somewhat cumbersome process, properly registering your organization as a 501(c)(3) nonprofit allows it to ...

Browse by category