Our law firm helps professional associations succeed. We work with professional societies, trade groups, chambers of commerce, real estate boards, and business leagues, handling legal issues from corporate governance to 501(c)(6) tax matters.

We guide you through every step to start your association the right way, so leadership and members can thrive.

What Is a 501(c)(6) Business Association?

Business leagues are nonprofit associations of individuals with a common business interest, formed to promote that interest and serve their members. Common examples:

  • trade associations
  • professional associations
  • chambers of commerce
  • real estate boards
  • boards of trade

Unlike other nonprofits, which focus on broader public causes, business leagues are member-focused, supporting professional growth, networking, advocacy, and education for an industry or profession.

Why Start a 501(c)(6) Business Association?

Forming a 501(c)(6) entity provides:

  • legal recognition as a nonprofit corporation
  • federal tax-exempt status for your association
  • ability to offer member benefits

Schedule a Meeting Today to start your professional association with confidence.

Step-by-Step Guide to  Forming a 501(c)(6) Business Association

Here’s how your professional membership-based association can get started.

Step 1. Plan Your Association

As you’re making plans for your association, it’s important to clearly define who the association will serve, what it will do, where it will operate, when it will conduct services, and how it will fill a community need.

Clearly Define: 

  • Who will the association serve?
  • What programs will the association provide to members?
  • How it will promote members’ common business interests?
  • Where and when activities will occur?

Common Association Activities:

  • conferences and seminars
  • trade shows
  • publications, such as journals, newsletters, and books
  • award programs
  • scholarship and fellowship programs
  • maintenance of a conventional library and/or a Web site
  • certification programs
  • research
  • community outreach programs
  • attempts to influence legislation
  • operation of a political action committee
  • 0ther member activities

Step 2. Select a Name

Pick a name that describes the association’s mission, that the public is likely to remember, and one that isn’t being used by another business or group as a trademark or domain name.

The legal name of your nonprofit corporation may not conflict with any other registered name. Check availability of your desired name by conducting a name search with your secretary of state.

3. Recruit a Board of Directors

Remember that no one owns a nonprofit — not the board or members.

Decide if your association will be

  • member-managed (with members to vote on certain matters)
  • director-managed
  • or a combination of member and director management.

Most IRS 501(c)(6) membership-based professional associations select a board of directors to manage the organization. This governing board of directors are usually accountable to the public, to supporters, and to members.

Each state has different requirements on the number of directors; check with the secretary of state

 

Step 4. Select a Business Structure & File Corporate Formation Documents 

Business structures are state law concepts. You may set up the business entity as (depending on your state laws):

  • a nonprofit corporation
  • B-corporation
  • nonprofit LLC
  • unincorporated nonprofit association

Draft and file documents to become a state nonprofit corporation (or other appropriate state entity). Check with your state’s secretary of state on business options.

Your formation documents (articles of incorporation or certificate of formation, depending on the state) will likely include:

    • Purpose of organization
    • Name of initial directors
    • Registered agent’s name and address (a registered agent is the person responsible for accepting lawsuits, certain government notices, and legal notices for the organization)
    • Statement on membership
    • Statement that the organization is organized for certain IRS tax-exempt purposes

Step 5. Prepare Association Bylaws

Bylaws are your organization’s operating manual. They set out the rules that govern the internal management of an organization.

The initial board of directors (and/or members) should prepare and adopt bylaws for the corporation simultaneously with the preparation of the articles of incorporation or soon thereafter. A copy of the bylaws, signed by a corporate officer, are submitted when applying for the federal tax-exemption.

Step 6. Hold an Organizational Meeting

Your new association will hold an organizational meeting to complete the formation of the entity. At this meeting, the organization will:

  • approve the bylaws
  • elect directors
  • appoint officers
  • approve initial resolutions such as opening a company bank account.

Keep detailed minutes of this meeting.

Step 7. Apply for a Federal Employer Identification Number – EIN

Your 501(c)(6) association will obtain an EIN regardless of whether it will hire employees. You will use this EIN number on federal tax returns and receipts. Additionally, your organization needs an EIN to open a bank account. To obtain an EIN, your organization should complete IRS Form SS-4, available on the IRS website.

Step 8. Apply for 501(c)(6) Tax-Exempt Status with the IRS

Tax-exempt status means that an organization is exempt from paying certain taxes.

Internal Revenue Code Section 501(c)(6) provides for the exemption of business leagues, chambers of commerce, real estate boards, boards of trade, and professional football leagues, which are not organized for profit.

To apply for federal 501(c)(6) tax-exempt status, a business association applies to the IRS using Form 1024.

Pay the current filing fee (2026 – $600).

Start your new association with our legal guidance.

Step 9. Apply for State Exemptions and Permits 

The state comptroller oversees collection of state and local taxes, fees, and assessments. Many state laws allow certain organizations to be exempt from paying sales tax, hotel occupancy tax, and franchise tax. You must apply for these state exemptions; it is not automatic.

Your organization may also need to obtain applicable licenses and permits.

Some may include:

  • State tax-exemption applications – sales tax, franchise tax
  • State or local business licenses

Get Assurance Your Association Is Set Up Correctly

Cullinane Law Group offers flat-rate packages for forming 501(c)(6) business leagues:

  • Drafting governing documents and bylaws
  • Federal tax-exemption filing
  • Compliance and ongoing legal support

Learn more about our services for professional associations and how we help organizations thrive.

Other helpful links:

 

Start Your Business Association Today – Let us handle the legal details so your organization can focus on growing your membership, serving your members, and achieving your mission.