Selecting the Name
Selecting the name of your organization seems simple enough but it is an important preliminary step to creating the organization. The initial Board should approve the name and so indicate in the minutes. (There will be more about the minutes of the first meetings in a future blog).
Most if not all State laws address several issues:
- The name cannot indicate a word, phrase or abbreviation or a word derivative from the abbreviation which indicates or implies you are organized for some purpose other than permitted by your Certificate/Articles of Incorporation;
- The name cannot be the same as or confusingly similar to an organization in the State;
- The name cannot contain a word or phrase that is prohibited or restricted by laws of the State;
- Your organization must conduct its business under its name and cannot use an alternate name, an abbreviation or an acronym, unless you register that other name, abbreviation or acronym also. There are rules about renewing the use of an alternative name.
- Many States requires that nonprofits use the words "(Name of State) Nonprofit Corporation", "Incorporated", "Inc.", "Corporation" or "Corp." with the name of the organization, such as "XYZ, Inc.". Some States do not permit those titles.
What name will the organization use? When you have decided on a name, check the State web site for business development. Most State web sites have a subsection for charities or for nonprofit groups. You may be able to check at the web site whether the name you have selected is available in your State.
You can also download or order a package of registration forms that you will need to file for your nonprofit organization incorporation including registering the name. The web site may provide the addresses and telephone numbers you will need to register the name and to file for incorporation.
Reserving the Name
Your organization should consider reserving the name early in the process of preparing to incorporate. You can usually reserve the name for 120 days by contacting the requisite State office. You may be able to reserve several names listing them in priority order; there may be a fee for each name reserved.
The fee schedule for your State may have a cost to reserve a name by telephone with a credit card. You can reserve the name by sending a cover letter and a different fee may apply. If the State permits there may be an expedited service for reserving the name that may have an additional fee. You may also be able to reserve the name at the appropriate office over the counter.
Reserving a business name does not register the business entity. You will still need to register your nonprofit business either online or by submitting all the required paper forms.
A word of caution about suggested wording from the State for the incorporation papers. The State may have language it wants in the Articles or Certification of incorporation. That's fine. But also be aware when you prepare the papers for the IRS, Form 1023, the IRS also has language it wants in the incorporation papers filed with the State. Be certain to include the sections both the State and the IRS require when you first incorporate. It will save you money and time to do it right the first time.