Does a Nonprofit Organization in Pennsylvania Require a Business License?

By Elizabeth Rayne

A business license is simply an issuance of permission to operate in the state. Although nonprofits do not transact business in the traditional sense, they must still obtain various permissions from the state of Pennsylvania to conduct their affairs. Depending on the type of nonprofit organization, required permits may include general licensing, occupational licensing, charity registration, local licensing, and foreign business licensing.

A business license is simply an issuance of permission to operate in the state. Although nonprofits do not transact business in the traditional sense, they must still obtain various permissions from the state of Pennsylvania to conduct their affairs. Depending on the type of nonprofit organization, required permits may include general licensing, occupational licensing, charity registration, local licensing, and foreign business licensing.

General Licensing

A nonprofit organization's "license," or authority, to operate in the state of Pennsylvania is its properly filed articles of incorporation. The articles of incorporation must include the names of the incorporators, the name of the nonprofit, and state its charitable purpose. The articles may also list the directors of the nonprofit and the duration of the business. Organizations are required to advertise their intention to incorporate in two local newspapers. The articles are filed with the Pennsylvania Department of State with the appropriate fee. Once the state accepts and approves the articles, the nonprofit has the authority to operate in the state of Pennsylvania.

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Occupational Licensing

Depending on the type of business you are operating, you may be required to obtain a professional license. Occupations that require licensing include legal services, accounting and most health-related professions. You must contact the specific state board that pertains to your profession to determine the licensing requirements. For general information about professional occupations, or to determine if a profession requires a license, you can contact the Pennsylvania Bureau of Professional and Occupational Affairs.

Charity Registration

The nonprofit must file a charitable organization registration statement with the Pennsylvania Bureau of Charitable Organizations for permission to solicit donations from Pennsylvania residents. Religious institutions and public charities that receive contributions of less than $25,000 per year are excluded from this requirement; they do not need permission to solicit donations. Additionally, professional solicitors and professional fundraising counsels who are paid to raise funds for organizations must register with the Pennsylvania Bureau of Charitable Organizations before they are allowed to raise funds.

Local Licensing

If a nonprofit has a physical location in a particular Pennsylvania town or county, it may need a local business license or permit. Some counties require that all businesses, including nonprofits, apply for a business permit. Certain businesses may require additional permits, such as child care facilities, food vending businesses, or tobacco-related companies. Further, permits are required whenever new construction takes place.

Foreign Business Licensing

If your nonprofit organization is registered in another state, you must obtain a certificate of authority from the Secretary of the Commonwealth to have permission to conduct business in Pennsylvania. The application for a certificate of authority must be filed with the Secretary, accompanied by a docketing statement. Nonprofit organizations must publicize their intent to apply for a certificate of authority in two Pennsylvania newspapers.

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The Process of a Nonprofit Incorporation in Pennsylvania

References

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