How to Relocate a Nonprofit to Another State

By Cindy DeRuyter, J.D.

How to Relocate a Nonprofit to Another State

By Cindy DeRuyter, J.D.

When you establish a nonprofit organization in one state, you can register to do business in others as a foreign business entity. This can be helpful if your company simply intends to expand its reach or organizational footprint to attract donors elsewhere.

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However, to move your entire operation to a new geographical location, you may need to take additional action to dissolve, or close, the business in the original state of incorporation and establish it elsewhere. Follow these steps when relocating your nonprofit.

1. Review any alternatives your business has to relocate the company completely.

Relocating requires a significant amount of work. Before deciding to take that step, it is a worthwhile effort to evaluate other potential options, such as maintaining your corporate registration and status in the first state and simply expanding to a second one. If you take this approach, you need to file as a nonprofit corporation in each jurisdiction where you conduct business or raise funds for the company.

If your company plans to operate entirely in another geographical location and it no longer makes sense to maintain the organization where it originally incorporated, plan your move in advance so you have the time needed to notify the appropriate authorities, make logistical decisions, and notify donors, among other necessary actions.

2. Identify what rules and regulations must be met.

If you decide it makes sense to dissolve your entity and establish a new one in a second state, determine what else is required of you before moving forward. Laws governing the creation, maintenance, and dissolution of corporate entities, including both for-profit and not-for-profit organizations, are state-specific.

Find out what your company's current jurisdictional laws say about how to dissolve or relocate your corporation. Dissolving any business generally involves following specific notice and filing requirements, which can vary greatly depending on where the organization is operating. It could also depend upon what corporate documents you have in place, as most companies have an operating agreement that specifies how certain processes will be followed.

Next, educate yourself about your new requirements. In a few states, you may be able to complete a simplified filing process. In others, you must essentially start from scratch. In those cases, determine what is required to establish nonprofit corporations. For example, you might need to file the articles of incorporation, corporate charters, bylaws, and other documents with the Secretary of State or other business authority and pay required fees to establish the new legal entity.

3. Determine and follow tax requirements and other filing procedures.

You may also need to obtain a new employer identification number (EIN) from the Internal Revenue Service (IRS) and a new tax identification number from your new state. Last but not least, you may also need to file again with the IRS to request 501(c)(3) tax recognition, especially if your business activities change with the move to a new jurisdiction.

If you need to relocate an organization or another business, ensure you've met all of the requirements in the jurisdiction where your business is currently registered as well as in the new state.

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