A Guide To STARTING A BUSINESS IN MINNESOTA 42nd Ed 2024

NONPROFIT CORPORATIONS A Minnesota nonprofit corporation is defined by statute as a corporation which: • Is formed for a purpose not involving pecuniary gain to its members (other than members that are nonprofit organizations or governmental units), and • Pays no dividends or other pecuniary remuneration, directly or indirectly, to its members as such (other than to members that are nonprofit organizations or governmental units). Thus, a business corporation (regardless of whether it actually makes a profit) cannot be a nonprofit corporation because a primary purpose of every business corporation is to remunerate its shareholders. A nonprofit corporation may be formed under the Minnesota Nonprofit Corporation Act, Minn. Stat. Chapter 317A, for any lawful purpose, unless another statute requires incorporation for a different or specific purpose. The nonprofit corporation is managed by a board of directors, which must consist of at least three individuals. The nonprofit corporation must have at least two officers, a president and a treasurer. One person may perform both of these functions. The Minnesota Nonprofit Corporation Act does not apply to cooperative associations, public cemetery corporations and associations, and private cemeteries. Religious corporations may be formed under the Minnesota Nonprofit Corporation Act or under the Minnesota religious corporation statute, Minn. Stat. Chapter 315. Nonprofit corporations are required to file an annual registration with the Secretary of State once each calendar year, on a registration form mailed to the corporation’s registered office address. Failure to file in a calendar year will result in statutory dissolution, but nonprofit corporations may be reinstated at any time upon filing the annual registration. The registered office address may be updated without charge. Minnesota Nonprofit Corporation Articles of Incorporation and Minnesota Nonprofit Corporation Annual Renewal forms are available from the Secretary of State at Minnesota Non-Profit Corporation Forms. Also available by mail from that office. A nonprofit corporation may qualify for tax exempt status for some or all of its income, for federal or state tax purposes, or both. Donors to the tax exempt organization may qualify for a tax deduction on their contributions to the organization. Application for tax exempt status must be made with the Internal Revenue Service and the exemption must subsequently be established with the Minnesota Department of Revenue. Additional specific language may be required in the articles of incorporation by the Internal Revenue Service before an application will be granted. Annual federal and state informational filings also are required, and if the organization solicits funds in Minnesota, it also must register with the Charities Division of the Minnesota Attorney General’s office. The formation and tax treatment of nonprofit corporations are highly technical areas which should not be attempted without competent advice from qualified professionals. Review the IRS information: Charities and Nonprofits; Before Applying for Tax Exempt Status; Applying for Tax Exempt Status; Publication 557, Tax Exempt Status for Your Organization. IRS contact information for charities and non-profit organizations is available at About Us.

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