The Benefits of Incorporating Your Organization

Posted by: Copenhaver, Ellet & Derrico

Incorporating your organization, club, or association in Virginia requires some basic paperwork and simple legal steps, but doing so provides significant benefits for years to come that can save your organization money and provide important protections.

When you choose to incorporate in Virginia, you’ll need to file documents with the state and keep up with yearly reporting. Clearly, some simple legal advice is essential as you begin the process and as your organization grows over the years. In Roanoke, the business lawyer with Copenhaver, Ellett & Derrico provides professional, experienced, and clear direction for new and growing organizations.

Whether you want to start a formal charity with tax-exempt status or your amateur soccer club needs to fundraise for a big trip, call us today to get started on incorporation at (540) 655-1854.

Liability Protection

One of the most important reasons to incorporate your organization is to protect the other members, directors, and those involved from personal liability. Once you incorporate, only the assets of the corporation are accessible for lawsuits, not the personal assets of the owners. Incorporation makes your organization a legal entity of its own, with its own liabilities.

Tax Exemption

An important option for your organization to consider is tax-exempt status. To qualify, your organization must be one that is for charitable, literary, religious, scientific, amateur sports, public safety, or prevention of cruelty purposes. Once you incorporate, your corporation can then file as a 501(c)3 organization with the IRS.

Obtaining 501(c)3 status exempts your organization from federal, state, and local taxes (which includes income tax and property tax). This can be a huge money saver and may greatly benefit your organization.

Benefits for Donors

Once you obtain tax-exempt status, any donations made to your organization are tax-deductible for the donors. This can encourage more and larger donations, helping you to grow your organization and increase your available funds.

Grant Eligibility

As a tax-exempt corporation, you will qualify for more public and private grants since many are only available to those with a 501(c)3 designation. Grants can provide important funding so that your organization can fulfill its mission and as well as continue to grow.

How to Incorporate a Tax-Exempt Organization

Incorporating an organization in Virginia requires these simple steps:

  • Choose a name.
  • Select a registered agent who is authorized to accept service of process for your organization. It’s common to hire an attorney company to handle this.
  • File Articles of Incorporation with the state and pay filing fees.
  • Obtain an Employer Identification Number (EIN) from the IRS.
  • Create your organization’s bylaws and adopt them at your first board of directors’ meeting.
  • Apply for 501(c)3 tax-exempt status with the IRS.

Making sure your organization checks each item off the list will ensure you are legally incorporated with tax-exempt status.

Comply with Ongoing Requirements

Once you file for incorporation and tax-exempt status, your corporation is required to maintain its status. This includes filing an annual report for the corporation with the Virginia State Corporation Committee. There are also annual informational tax reporting forms that must be filed.

Contact Us to Help with Incorporation

Creating a tax-exempt organization is simple and not cost preventative. And by working with an experienced lawyer, you can ensure that your organization gets every chance to grow, receiving all the protections under the law that it is entitled to.

At Copenhaver, Ellett & Derrico, we routinely help with all manner of incorporations and filing requirements in VA. Let us discuss the needs of your organization, and how we can help.

Call us at (540) 655-1854 to set up a convenient appointment.