To start a nonprofit in Louisiana, you file articles of incorporation with the Secretary of State for a $75 fee, adopt bylaws, get a federal Employer Identification Number, and then apply to the IRS for 501(c)(3) tax-exempt status. After that, the organization has to keep up with annual state and federal filings and follow the fiduciary rules that govern how directors and officers run it. Skipping or mistiming any of these steps can cost the organization its tax-exempt status or leave its leaders personally exposed.
File the Articles of Incorporation
The articles of incorporation are the document that legally creates the corporation. They have to include the corporation’s name, its purpose, the planned duration (perpetual is allowed), and the names, addresses, and terms of office for the initial board of directors.1Louisiana Secretary of State. Articles of Incorporation for Domestic Non-Profit Corporation The corporation must be organized on a non-stock basis, and the stated purpose has to fit within activities allowed under Louisiana’s Nonprofit Corporation Law.
The filing fee is $75, with an additional $5 state service charge if you file online through the Secretary of State’s Commercial Online Registration Application.2Louisiana Secretary of State. Louisiana Nonprofit Corporation Filing Instructions
You also have to designate a registered agent with a physical street address in Louisiana. That person or entity receives official legal and government documents for the corporation. A commercial registered agent service typically costs between $35 and $350 per year.
One structural decision belongs in the articles: whether the corporation will have members. In a membership corporation, members typically vote on major decisions like electing directors, amending the articles, and authorizing dissolution. In a non-member corporation, the board handles all of that. Either is allowed, but the choice shapes how every decision gets made afterward, so make it deliberately at formation.
Adopt Bylaws and Get an EIN
Bylaws are the internal rulebook: how many directors serve, how meetings are called, what officers do, and how members (if any) vote. Bylaws cannot conflict with the articles or with Louisiana law, but beyond that, the organization has wide latitude to design its own governance.
You will also need an Employer Identification Number from the IRS. It’s free, can be obtained online, and functions as the organization’s tax ID. You need it before opening a bank account, hiring employees, or applying for tax-exempt status.
Apply for 501(c)(3) Tax-Exempt Status
Filing with the state does not make the organization tax-exempt. To qualify under Section 501(c)(3), the nonprofit has to submit Form 1023 electronically through Pay.gov, along with a user fee that the IRS updates annually.3Internal Revenue Service. Instructions for Form 1023
Timing matters more than most founders realize. File Form 1023 within 27 months after the end of the month the corporation was formed, and if the IRS approves the application, your exempt status is retroactive to the formation date. Miss that window and exemption starts only on the date you actually filed.3Internal Revenue Service. Instructions for Form 1023 Donations made during the gap may not be tax-deductible to the donors who made them.
To qualify, the organizing documents have to limit the corporation’s purposes to exempt activities and permanently dedicate its assets to exempt purposes. The organization must be operated exclusively for exempt purposes, refrain from political campaign activity, and keep earnings from benefiting insiders.3Internal Revenue Service. Instructions for Form 1023 The IRS strongly recommends every 501(c)(3) also adopt a written conflict of interest policy, and most applications include one.4Internal Revenue Service. Form 1023 – Purpose of Conflict of Interest Policy
Keep Up With Annual Filings
Formation is the easy part. Staying in good standing means two separate annual filings.
Louisiana Annual Report
Every Louisiana nonprofit must file an annual report with the Secretary of State on or before the anniversary of its incorporation date. The report has to include the registered office address, the name and address of each registered agent, and the names, addresses, and term expiration dates for all directors and officers.5Louisiana State Legislature. Louisiana Revised Statutes RS 12-205.1 – Annual Report to Secretary of State The fee is $10 for most nonprofits; churches are exempt from the filing fee.6Louisiana Secretary of State. Get Forms and Fee Schedule Missing the deadline can trigger administrative revocation of the corporation’s standing with the state, and getting reinstated means filing the overdue reports and paying back fees.
IRS Form 990
Tax-exempt organizations file an annual information return with the IRS. Organizations with gross receipts of $50,000 or more generally file Form 990 or Form 990-EZ. Smaller organizations file Form 990-N, a short electronic notice sometimes called the e-Postcard.7Internal Revenue Service. Exempt Organization Annual Filing Requirements Overview The return is due by the 15th day of the 5th month after the end of the organization’s fiscal year.
Miss three years in a row and the organization automatically loses tax-exempt status. Getting it back requires a new application to the IRS and another user fee.
Public Disclosure
Every 501(c)(3) must make certain documents available for public inspection. The original Form 1023 must be available permanently. Each Form 990 must be available for at least three years from its due date. Organizations exempted after August 2006 must also make any Form 990-T available. If a member of the public requests these documents, the nonprofit has to provide copies.
Rules the Board Has to Follow From Day One
Directors and officers of Louisiana nonprofits are fiduciaries. They have to act in good faith and use the same diligence, care, judgment, and skill a reasonably prudent person would use in a similar role. Louisiana law protects directors who meet that standard: a director or officer cannot be held personally liable for monetary damages for a breach of the duty of care unless the conduct rises to willful misconduct or recklessness. Ordinary mistakes in good faith are not enough.
Conflicts of Interest and Excess Benefits
A conflict of interest arises when a director’s or officer’s personal financial interests compete with their duty to the organization. Voting on a contract with a business owned by a board member, or setting a director’s own compensation, are the classic examples. An effective policy requires the affected person to disclose the facts and recuse themselves from the vote.4Internal Revenue Service. Form 1023 – Purpose of Conflict of Interest Policy
When an insider (an officer, director, or anyone with substantial influence) receives compensation or benefits worth more than what they gave in return, the IRS treats it as an excess benefit transaction. The initial excise tax is 25% of the excess, and it falls on the individual, not the organization. If the transaction isn’t corrected within the allowed period by repaying the excess plus interest, an additional 200% tax applies.8Office of the Law Revision Counsel. 26 USC 4958 – Taxes on Excess Benefit Transactions Repeated or egregious violations can also cost the organization its exempt status. The best protection is documenting that compensation was approved by disinterested board members using comparable data.
Political Campaigns and Lobbying
501(c)(3) organizations are absolutely prohibited from participating in political campaigns. No endorsements, no opposition, no contributions to any candidate for public office. Even biased voter education activities can violate the rule. The IRS can revoke exempt status and impose excise taxes for a violation.9Internal Revenue Service. Restriction of Political Campaign Intervention by Section 501(c)(3) Tax-Exempt Organizations
Lobbying is treated differently. Nonprofits can lobby, but only within limits. Organizations that don’t make a specific election fall under a vague “no substantial part” test. Filing Form 5768 to elect the expenditure test under Section 501(h) gives most nonprofits a predictable dollar-based cap tied to overall exempt-purpose spending. Exceeding the cap in a year triggers a 25% excise tax on the excess; excessive lobbying averaged over four years can end the exemption.10Internal Revenue Service. Measuring Lobbying Activity – Expenditure Test Churches and private foundations cannot make the 501(h) election.
Taxes the Exemption Doesn’t Cover
Federal 501(c)(3) status exempts the organization from federal income tax on revenue related to its exempt purpose. Louisiana generally exempts nonprofits from state corporate income tax as well. But the exemption applies to income tax on the corporation, not to sales tax on the things the organization buys. That distinction trips up a lot of new nonprofits.11Louisiana Department of Revenue. How Do I Get a Sales Tax-Exempt Number for a Non-Profit Organization
Louisiana does offer a narrow sales tax exemption for qualifying nonprofit events. Sales of goods, admission charges, and parking fees at events sponsored by charitable, religious, educational, civic, or fraternal nonprofits are exempt from sales and use tax, provided the entire proceeds (minus necessary event expenses) go to the organization’s exempt purpose.12Louisiana State Legislature. Louisiana Revised Statutes RS 47-305.14 – Exemptions for Nonprofit Organizations This covers fundraising events, not everyday purchases of office supplies or equipment.
Revenue from activities unrelated to the exempt purpose can trigger federal unrelated business income tax. Income is taxable only if all three of these are true: it comes from a trade or business, that business is regularly carried on, and the activity is not substantially related to the exempt purpose. Miss any one and it isn’t taxable. Deductions for expenses directly connected to the activity are allowed.
Section 501(c)(3) organizations are exempt from the Federal Unemployment Tax Act, so they don’t pay FUTA on employee wages.13Internal Revenue Service. Section 501(c)(3) Organizations – FUTA Exemption State unemployment insurance is a separate question. Nonprofits with employees should check with the Louisiana Workforce Commission on whether they owe state unemployment contributions or can elect to reimburse the state for benefits paid instead.
If the Organization Later Dissolves
One rule is worth knowing at formation because it constrains everything the organization does with its money: if a 501(c)(3) ever dissolves, remaining assets have to go to another exempt-purpose organization or to a government entity. Distributing them to individuals would violate both state law and federal tax-exempt requirements.14Justia Law. Louisiana Code 12-250 – Voluntary Proceedings for Dissolution, Authorization, Appointment of Liquidators The articles and bylaws should reflect that from the start.