Nonprofit Corporation

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If you are interested in forming an entity to engage in some type of nonprofit, social benefit, or public good, the options in Vermont include the creation of a standard nonprofit corporation, a low-profit LLC (L3C), or a benefit corporation.

STOP: Before you get started, we recommend that you consult with an attorney, accountant, or business advisor about which business structure is best for you.

A nonprofit corporation is a formal organization of people committed to a particular purpose. Purposes may vary, but their basis is some greater good, either for the society as a whole or for a defined community of interest, and not for the individual profit of those involved. Unlike for-profit corporations, a nonprofit corporation has no shareholders and does not distribute profits.

Types of Nonprofit Corporations

There are two types of nonprofit corporations under state law:

  1. Public Benefit

    Any nonprofit corporation that is either:

    • Recognized, or seeks to be recognized, as exempt under section 501(c)(3) of the Internal Revenue Code; or

    • Organized for a public or charitable purpose examples include religious, educational, scientific, literary, testing for public safety, fostering national or international amateur sports competition, or preventing cruelty to children or animals.

  2. Mutual Benefit

    Any nonprofit corporation that is NOT organized for a public or charitable purpose, such as political organizations and lobby groups; trade union; civic and business leagues; benefit and retirement funds; home owners associations; fraternal, veteran, employee, or child care organizations; cemeteries, etc.

Please note: Registration as a Vermont nonprofit does not confer IRS Code 501(c), (e), (f), or any other exempt organization status with the Internal Revenue Service (IRS). Please contact the IRS for more information on how a nonprofit can become tax exempt.

Charitable Organizations doing business in Vermont

If you are an existing out-of-state charitable organization and wish to solicit for membership in Vermont, you need to obtain a Certificate of Authority from the Office of the Secretary of State. For more information about registering as a foreign nonprofit, please see “Foreign Business Registration.”

Paid Fundraisers

Under Vermont law, all paid fundraisers and paid solicitors who directly or indirectly solicit donations for charitable organizations or charitable purposes are required to register annually with the Vermont Attorney General’s Office and to pay a registration fee. According to 9 V.S.A. § 2471(8):

“Paid fundraiser” means a person who, for financial consideration, solicits contributions from persons in this state, either directly or through employees, agents, or those with whom the paid fundraiser is in privity. A paid fundraiser does not include:

(A) Any person who, for compensation, plans, manages, advises or consults in connection with the solicitation of contributions in this state, but does not solicit contributions; except that if the compensation is in whole or in part dependent on the number or value of contributions received, the person shall be considered a paid fundraiser.

(B) Any person who for profit is regularly and primarily engaged in trade or commerce in this state other than in connection with the raising of funds for charitable purposes and who represents to the public that an amount per unit of goods or services purchased by the public will benefit a charitable purpose.

(C) A bona fide officer or employee of a charitable organization.

(D) A person who solicits for an educational institution at which he or she is a bona fide student, unless the person is paid compensation which is in whole or in part dependent upon the number or value of contributions received.

For more information, visit the Vermont Attorney General’s Office online, or contact them by email at paidfundranulliser@atg.snulltate.vt.usnull or by phone at 802-828-5507.
   

Business Name of a Nonprofit Corporation

The business name of a nonprofit corporation must contain 1 of the following words:

  • "corporation" (Corp)
  • "incorporated" (Inc)
  • "company" (Co)
  • "limited" (Ltd)

Business names may NOT contain the word "cooperative," nor the abbreviation "coop," unless duly registered with the Secretary of State as a cooperative corporation.    
   

Nonprofit Corporation Law

Please visit Title 11B of the Vermont Statutes Online for more information.

Registration Fees

Please see “Fees & Filings” for the costs of registration.

Duration of Registration

Once registered, you must renew your nonprofit every two years. For renewal information, please see “Annual/Biennial Reports.”

STOP: Before you get started, we recommend that you consult with an attorney, accountant, or business advisor about which business type is best for you.  

Registering a Nonprofit Corporation: Online or by Mail

Do not invest in websites, signs, business cards, or other marketing materials until you receive a certificate confirming the availability and your ownership of the requested name.

The state of Vermont operates under a “deceptively similar” standard. Under this standard, if the requested name is too similar to an already registered name, such that it would confuse the public as to whom they are dealing with, it will be rejected.

All registrations with the Office of the Secretary of State are subject to name availability rules. Please search our online database for your desired business name to avoid any obvious conflicts.

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Online Nonprofit Filings

Online filing is the preferred method. There is no extra fee and turnaround times are much faster. For information and instructions about online registration, please see our Online Registration Guide. To begin your online registration, please visit the Online Business Service Center:

Log In & Register Online

 

Registration by Mail

This page was last updated: 2014-12-09