You should already have the articles of incorporation papers you need from the appropriate state office for your nonprofit. (If not, use the list of state offices at the IRS website for contact information.) That office may even have provided sample articles of incorporation and instructions about how to prepare your own.
Pay close attention to the instructions. The whole process may be as simple as filling in the blanks. Although you can amend articles of incorporation, it requires filing additional forms and paying more fees, so you may as well spend time getting them right the first time.
IRS Publication 557 contains information about the language needed in the articles of incorporation, along with some sample articles. You can download this publication from the IRS website.
Craft a heading
You must put a heading on your articles so people can identify them. The heading should be something like this:
Articles of Incorporation of the XYZ Theater Company, Inc.
Sometimes you're required to add a short paragraph after the heading, stating that the incorporators adopt the following articles under the [cite the state code number under which you're filing] of [give the state name].
Article I
You insert the name you worked so hard to choose here in Article I. Simply write a sentence like this one:
The name of the corporation is the XYZ Theater Company, Inc.
Could it be any easier than that?
Article II
Some states require that you affirm that your corporation is perpetual (meaning it's intended to exist forever). If your state requires that affirmation, put it in Article II. You can include something like this:
This corporation shall exist in perpetuity unless dissolved.
However, chances are that the state will give you the language to use if it's needed.
Article III
Article III is a good place to state the organization's purpose. This article is probably the most important because state authorities and the IRS review it to determine whether your organization qualifies as a charitable entity.
Remember that 501(c)(3) organizations must be organized for a charitable, religious, educational, literary, or scientific purpose. You've already created your mission statement, right? If so, stating your purpose shouldn't be too difficult. Using the XYZ Theater Company as an example, your purpose may look like this:
This corporation is established to provide theatrical productions of new and classic plays. It also will work to strengthen the theater arts, support emerging playwrights, and encourage persons to enter the acting profession by providing scholarships and grants to theater arts students and by promoting the benefits of dramatic entertainment to the general public.
This article also must include a statement of exempt purpose under the IRS code, as in this example:
This corporation is organized exclusively for charitable, literary, and educational purposes, including for such purposes the making of distributions to organizations that qualify under section 501(c)(3) of the Internal Revenue Code or any corresponding section of any future federal tax code.
You must state that no proceeds of the corporation will enrich any individual, except that reasonable compensation may be paid in exchange for services to the corporation. Finally, you must note that if the corporation is dissolved, any assets remaining will be distributed to another corporation that serves a similar purpose and qualifies as a tax-exempt, charitable organization under the provisions of 501(c)(3) of the Internal Revenue Code.
You don't need to identify a particular nonprofit corporation; you just need to affirm that assets will be distributed to one serving a purpose similar to yours.
Article III may be the most critical for getting your nonprofit corporation established and, ultimately, approved for tax exemption by the IRS. If your state doesn't provide good examples of the language required in this article, ask a lawyer about the requirements in your state.
Article IV
All articles of incorporation identify the name and address of an agent of the corporation, someone to whom mail can be addressed. This address is considered the address of the corporation until changed. Include the person's name and street address. Post office boxes aren't allowed to be used as addresses.
The agent of the corporation doesn't need to be a director or incorporator of the corporation. This person can even be your attorney.
Article V
Put the initial directors' names and addresses in Article V. Most nonprofits start with three initial directors. If you're incorporating in a state that requires only one director, consider still having three. Because nonprofit organizations are formed to provide public benefit, demonstrating that several people are involved as volunteers may strengthen your application to the IRS for tax-exempt status.
Article VI
In Article VI, you list the incorporators' names and addresses. Incorporator simply refers to the person or people who are creating the corporation. Often, the incorporators and the initial directors are one and the same. Again, whether you need one or more depends on your state requirements.
Article VII
If you want your corporation to have members, you define the qualifications for membership in Article VII. You can define classes of membership. If you don't want members, all you have to say is, "This corporation has no members." Better yet, refer the question to your bylaws, which are easier to amend if you change your mind. If that's what you decide to do, you can use this language:
Membership provisions of this corporation are defined in the bylaws.
Members of a corporation have the right to participate in governing the organization.
Article VIII
You may not need an Article VIII in your articles of incorporation. Some forms have a blank space here to add additional provisions. Don't add any unless you're sure you know what you're doing. Maybe your group is adamant that all future directors must be elected by 85 percent of the membership. Such a provision probably would ensure that you'd never elect new directors. Use this blank space cautiously.
