Non-Profit Entity Formation in Illinois
Forming any new business or not-for-profit entity requires its founders to complete what is often complex and confusing paperwork. Those forming a not-for-profit entity in Illinois have the added challenge of ensuring that the organization meets demanding legal standards for not-for-profit organizations under both Illinois and federal law. After the initial formation, directors and board members will also need to be prepared to make annual filings with the Illinois Secretary of State, the Illinois Attorney General, and the Internal Revenue Service.
Running afoul of these filing requirements, or completing these filings incorrectly, can have serious and costly consequences. Not everyone who has the passion and entrepreneurial spirit to start an Illinois nonprofit organization has the legal or business acumen to confidently complete these filings. Fortunately, we can help.
At the Hoffman Estates offices of MacDonald, Lee & Senechalle, we understand the unique needs of Chicagoland nonprofit and not-for-profit organizations. We’ve been helping founders of new not-for-profit organizations to start with a solid legal foundation, as well as existing Illinois religious, educational, charitable and scientific organizations and associations complete their not-for-profit registrations and annual compliance matters for decades, while also assisting with other legal questions that arise during the course of forming and operating a nonprofit. Contact us today to receive a consultation on starting or maintaining a not-for-profit corporation, association or other entity in Des Plaines, Hoffman Estates, or elsewhere in the Chicago area.
Basic steps in forming an Illinois not-for-profit organization
There are some basic steps involved in starting a not-for-profit entity in Illinois. These include:
- Selecting a board of directors, composed of at least three people, as well as a registered agent;
- Choosing a unique name for the organization;
- Filing articles of incorporation (or articles of organization) with the Secretary of State of Illinois. If you plan to seek federal tax-exempt status, these articles will need to comply with federal requirements;
- Creating bylaws for the organization; and
- Holding the first meeting of the board of directors.
Seeking nonprofit tax-exempt status in Illinois
Not-for-profit organizations are not always tax-exempt. They must meet certain standards under federal tax law to qualify as tax-exempt 501(c)(3) organizations. After registering with the State of Illinois as a not-for-profit organization, they must also make a separate filing with the IRS to obtain tax-exempt status with certain limited exceptions such as churches. Illinois entities determined by the IRS to be exempt from federal income tax under the Internal Revenue Code will automatically be exempt from paying Illinois income taxes. However, if the organization wishes to be exempt from paying state sales tax on purchases, then the organization must seek a sales tax exemption from the Illinois Department of Revenue. These critical exemptions can save an organization thousands of dollars or more over its lifespan, and seeking an attorney’s help in obtaining these exemptions can help ensure success. Contact the professional and capable Chicagoland nonprofit organization attorneys at MacDonald, Lee & Senechalle to discuss your options in seeking nonprofit status for your Illinois organization.
Attorneys Helping Not-for-Profit Formation in Hoffman Estates, Des Plaines and Chicagoland
For assistance with forming an Illinois not-for-profit organization in the Chicago area, contact the knowledgeable, effective, and seasoned Hoffman Estates not-for-profit formation lawyers at MacDonald, Lee & Senechalle at 847-310-0025, or in Des Plaines at 847-298-5030.
