Delaware Nonprofit, Charity, and Legal Entity Setup

Who is this article for?

Anyone wanting to start a nonprofit or charity in the state of Delaware.

Delaware Nonprofit and Charity Overview

Nonprofit organizations in Delaware are under the Delaware Division of Corporations and are governed by the Delaware General Corporation Law.

Delaware is one of the most accessible states to incorporate and start a nonprofit or charity, as there are fewer registration requirements than in other states.

You don't need to apply for state income tax exemption in Delaware. All exempt corporations do not pay corporate income, sales, and use taxes as long as you have your IRS determination letter. No need to register to fundraise in the state as well.

However, you are still required to file an annual report with the Delaware Division of Corporations. Filing an annual report has a $25 fee for exempt domestic corporations.

Items Needed During This Process

Steps to Forming a Nonprofit in Delaware

Choose a nonprofit corporation structure. In Delaware, there are two kinds.
1. Exempt Corporations are not subject to annual franchise tax, not authorized to issue capital, and exempt from taxation under § 501(c) of the United States Internal Revenue Code or any similar provisions of the Internal Revenue Code.
2. Qualifications:
  1. Qualify as a civic organization under § 8110(c)(1) of Title 9 or §6840(4) of Title 16
  2. Qualify as a charitable/fraternal organization under § 2593(1) of Title 6
  3. Listed in § 8106(a) of Title 9
  4. You are organized primarily or exclusively for religious or charitable purposes
  5. Are not organized for profit
  6. No part of its net earnings inures to the benefit of any member or individual
3. If your organization does not meet any of these qualifications, file as a Nonstock Nonprofit Corporation.

Choose the directors of your nonprofit. Delaware requires that you have at least one member on your board. But note that the IRS requires three for charity 501(3)c status; therefore, you may need three board members.

Appoint a registered agent. You can refer to this list of registered agents in Delaware.

Check whether your nonprofit name has a duplicate in the database of the Delaware Division of Corporations.
1. You can also reserve your name online for a $75 fee.

Prepare Articles of Incorporation. The articles must contain the following:
1. Name of nonprofit
2. Name and street address of the organization's registered office
3. Name and street address of your registered agent
4. Name and mailing address of the incorporator
5. Corporation's purpose, including the following statement: "This Corporation shall be a nonprofit corporation." Also, include a statement of purpose that meets IRS requirements.
6. A statement that the corporation will not have any capital stock
7. Statements that have tax-exempt language required by the IRS (not engaging in prohibited political or legislative activity, etc.)
8. Conditions for membership
9. Dissolution provision that assets will be given to another 501(c)(3) organization or the government upon dissolution
10. You can use the following templates provided by the Delaware government.
  1. Exempt Corporation
  2. Nonstock Corporation

File the Articles of Incorporation. Upload all the documents here.
1. The fee is $89. A same-day fee is $100, while a $24-hour fee is $50
2. Tip: You can order a Certificate of Status or Certificate of Good Standing at the time of filing. Put the request in the comment section of the document filing Sheet.
  1. $50 for a Short Form Certificate; $175 for a Long Form Certificate

Prepare your bylaws

Hold your first board meeting.Remember to create minutes that record the actions taken during the meeting.

Obtain an EIN

Apply for tax-exempt status with the IRS

If you’re planning to hire employees, register with the Delaware Department of Labor.