This blog series is dedicated to the steps needed to set up a nonprofit corporation, including steps on applying for tax-exemption with the IRS. Some items are Texas-specific; please contact us to get help in your own state.
Step 7: Hold the Organizational Meeting of Directors to Adopt Bylaws & Transact Business
After the organization receives its certificate of formation, it must hold an organizational meeting, called by the incorporator or a majority of the directors.
At the initial meeting, the following actions should be taken:
• Adopt bylaws.
• Elect officers. In Texas, the nonprofit corporation must elect a president and secretary, who must be different individuals. An officer may serve unlimited terms, unless the certificate or bylaws include term limits. The corporation can elect other officers’ positions as well, in accordance with the certificate or bylaws.
• Application for 501(c)(3) status. If the nonprofit corporation will seek federal tax-exemption, the directors should vote to authorize the preparation and filing of the IRS Form 1023 (Application for Recognition of Exemption under Section 501(c)(3) of the Internal Revenue Code).
At the initial meeting or subsequent board meetings, the following actions may be taken, as appropriate:
• Appoint members of committees.
• Fix the location of the principal office.
• Select a bank or banks and authorize the opening of an account.
• Authorize check signers.
• Authorize payment or reimbursement of incorporation and filing expenses.
• Authorize the filing of state tax-exemption applications.
• Appoint a registered agent for service of process (if the agent named in the certificate of formation will not continue to serve in this capacity).
• Select an insurance broker and authorize the purchase of general liability and property insurance, bonding, director’s and officer’s liability insurance, and employee fringe benefits such as medical insurance and retirement plans.
• Select an accountant or auditor.
• Authorize obtaining a nonprofit mailing permit to use special bulk nonprofit rates.
• Authorize purchase of corporate record books.
This series of blog posts describe how to set up a nonprofit organization, including
This series of blog posts describes ten steps to set up a nonprofit organization:
1: Make a Plan
6: Draft Bylaws