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A nonprofit is an entity or association created to promote and maintain the well-being and greater good of a community, in which profits (or surplus) are directed towards the business and mission rather than divided among the owners and shareholders. Nonprofits are often tax exempt. There are several different types of nonprofits, each with its own purpose, structure, regulations and limitations, and tax implications.

Advantages:

• Only your corporation's assets or property are vulnerable to your nonprofit's lawsuits or creditor claims. The personal property of trustees, officers, and managers is not at risk.
• Nonprofits may qualify for tax exemption.

Disadvantages:

• Planning a nonprofit requires significant time and effort.
• If control, autonomy, and independence in running your organization are important to you, nonprofit status may not be right for you.

Starting your nonprofit in Virginia doesn’t have to be a complicated process. Here are a few simple steps:

1. Doing research. Is your nonprofit serving a mission in the community? And do you have the means to maintain it?
2. Making your case. Write your mission statement, think about a name, select your directors carefully.
3. Filing. Rocket Lawyer can help you with this step!

Although they’re used interchangeably, a 501(c)(3) and a nonprofit are not the same thing. 

A nonprofit is an organization that meets the requirements of its state law. While most people think of nonprofits as charitable organizations, states recognize many types of nonprofits, including many that do not perform charitable activities. Insurance companies, industry-specific professional societies, homeowners' associations, and social clubs are just a few examples of nonprofits that are not necessarily 501(c)(3) organizations. 

A 501(c)(3) organization, on the other hand, is an additional application on a federal level. It’s a nonprofit organization that is exempt from most state and federal income tax because it applied for recognition as exempt from tax under section 501(c)(3) of the Internal Revenue Code. A 501(c)(3) organization must operate for exempt purposes. The exempt purpose must be charitable, scientific, educational, religious, literary, public safety, amateur sports competition, or the prevention of cruelty to children or animals.

In addition to 501(c)(3), the IRS recognizes 26 other types of nonprofit organizations. The most familiar type is charitable organizations. Others include:

• 501(c)(4) Civic League, Social Welfare Organization, or Local Employee Association.
• 501(c)(5) Labor, Agricultural and Horticultural.
• 501(c)(6) Trade or Professional Association.
• 501(c)(7) Social or Recreational Club.
• 501(c)(8) Fraternal Societies.
• 501(c)(9) Employee Beneficiary Association.
• 501(c)(12) Local Benevolent Life Insurance Associations, Mutual Irrigation and Telephone Companies, and Like Organizations.
• 501(c)(14) State Chartered Credit Union and Mutual Reserve Fund.
• 501(c)(19) Veterans Organizations.
• 501(c)(29) CO-OP Health Insurance Issuers.

• File Articles of Incorporation with the State Corporation Commission, using Form SCC 819.
• File an Application for Certificate of Authority to Transact Business in Virginia with the State Corporation Commission, using Form SCC 921. This is only necessary if yours is a foreign nonstock corporation intending to conduct business in Virginia.
• File an Application for Reservation of Corporate Name, Form SCC 631, with the State Corporation Commission.
• File annual reports with the State Corporation Commission. Nonprofits are required to file these reports with the Office of the Clerk on or before the last day of the twelfth month after registration, and by the same date in all future years.

Fees for registering a nonprofit can differ from county to county and even specific times of the year. Some fees may also be dependent on how much the nonprofit is expected to earn or has earned in previous years. 

There are a few fees that you may be charged when you register a Virginia nonprofit. They include the following:

Virginia state filing fees and processing times: 

• State fee: $76.95.
  • Fee to expedite your filing: $100.
• State processing time: 5-10 business days.
  • Expedited state processing time: 3-5 business days.
• Rocket Lawyer state filing fee: $0 $99.99.
  • First filing FREE* for Rocket Legal+ members.
  • Get additional filings HALF OFF with Rocket Legal+.

501C IRS filing fees and processing times

• IRS exemption-status fee: $275 for shorter applications or $600 for applications requiring more detailed information (including LLCs, organizations with higher income or value, foreign organizations, churches, schools, some healthcare organizations, and some research organizations).
• IRS processing time: typically 6-12 months.
  • Simple applications may be processed more quickly.
• Rocket Lawyer IRS filing fee: $599 $1,199.
  • Rocket Legal+ members get HALF OFF.

The Business Services team at Rocket Lawyer are pros when it comes to the requirements for registering a nonprofit and the steps and processes required to file in Virginia. They can help you gather and file the necessary information quickly and at an affordable price. Rocket Legal+ members get their first business registration filing for free, paying only the state filing fees, and also get access to professional services for up to half off, including registered agent services, tax prep and filing, trademark registration, and more.

If your nonprofit does not have a physical address in Virginia (P.O. boxes are not acceptable substitutions), you may be required to have a registered agent. Registered agents accept official and legal correspondence on behalf of your organization. While you are setting up your nonprofit, why not set up Rocket Lawyer as your registered agent at the same time? Better yet, if you have a Rocket Legal+ membership, you can save on your business registration and your registered agent services with the membership that pays for itself.

Businesses can save up to $2,500 per year with a Rocket Legal+™ membership. This calculation is based on total savings on an initial business registration and registered agent, trademark, and business tax filing services for Rocket Legal+ members (a total cost of $924.97) compared to Rocket Legal members (a total cost of $1,949.96). This is in addition to savings on the average cost of 5 hours for document preparation by a non-Rocket Lawyer network attorney at the average attorney hourly rate in the U.S. of $300 (an estimated cost of $1,500 when purchased without any form of Rocket Lawyer membership) compared to unlimited use of customizable business documents for both Rocket Legal+ and Rocket Legal members at no extra cost.

Yes. Grants can be used for general purposes, or to help your organization meet its operating expenses. If a grant is awarded for a specific project, you should take steps to restrict the funds to that project.

A mission statement clarifies your goals and explains how you plan to meet them. As a guideline, describe what, where, when, and how your nonprofit's purpose will be met, as well as who is going to help your nonprofit meet it. It may take a few tries to narrow your ambitions down into a workable plan.

Although you're creating a nonprofit because you want to give back to your community, you still have to meet certain requirements to protect yourself and to ensure that you achieve your organization's goals. When you create a mission statement, you can explain your organization's purpose. Consider what problem or issue your organization wants to address, then focus your statement on including the efforts and values that will guide your nonprofit to these goals.

After you achieve nonprofit status in Virginia, you must turn your attention to keeping it. This involves filing your Articles of Incorporation and Certificate of Authority to Transact Business in Virginia, and keeping current with your annual reports and annual registration fees.

• Virginia Conservation Network: VCN's Nonprofit Management page is geared toward conservation and environmental nonprofits. It offers tools and training to help make all organizations more effective and efficient.
• Hampton Roads Community Foundation: This site promotes goals of philanthropy and improving southeastern Virginia's quality of life with resources in grant applications, skills enhancement through the Academy for Nonprofit Excellence, a monthly e-letter, "drop-in days" for nonprofits each month, and endowment management assistance.

If you are planning to operate in another state, you may need to register a nonprofit in that state. Rocket Lawyer can help you determine which states you should register in.

Other states may have their own rules for foreign nonprofits that originate in Virginia or domestic nonprofits that also operate in Virginia. Talk to an attorney to understand the legal and tax requirements for the state(s) in which you plan to operate.