How to Form a Nonprofit in California

Choose a Corporate Form and Check Your Name

Most charitable organizations incorporate as a nonprofit public benefit corporation, using the Secretary of State's own Form ARTS-PB-501(c)(3); a mutual benefit or religious corporation form exists for organizations with a different purpose. Before filing, search the Secretary of State's business name database to confirm your name is distinguishable from other entities already on file, since California does not accept a name that is too similar to an existing one.

File Articles of Incorporation With the Secretary of State

File your Articles of Incorporation with the California Secretary of State for a $30 filing fee, the same amount for a public benefit, mutual benefit or religious nonprofit corporation, per the Secretary of State's business-entities fee schedule. The articles need a specific statement of purpose and a dissolution clause if you plan to seek 501(c)(3) status; see our guide on required language for 501(c)(3) articles of incorporation for the exact wording the IRS expects. Filing in person at the Sacramento or Los Angeles office adds a separate $15 counter drop-off fee.

Register With the Attorney General's Registry of Charitable Trusts

Incorporating with the Secretary of State does not register your organization to hold or solicit charitable assets. Separately, within 30 days of first receiving money or property in or from California, a charitable corporation must file Form CT-1 with the Attorney General's Registry of Charitable Trusts, along with a $50 registration fee paid to the Department of Justice. The CT-1 form asks for your founding documents, your directors and officers, and, if you've already applied, a copy of your Form 1023 or 1024 and any IRS determination letter.

File Your First Statement of Information

California nonprofit, credit union and consumer cooperative corporations file a Statement of Information on Form SI-100, listing current officers and a registered agent for service of process, for a $20 fee. The first one is due within 90 days of filing your Articles of Incorporation, and you refile it every two years after that, during the anniversary month of your original registration, per the Secretary of State.

Draft Bylaws and Hold an Organizational Meeting

Once the state has filed your articles, the initial directors hold an organizational meeting to adopt bylaws, adopt a conflict-of-interest policy, elect officers, and authorize opening a bank account. California's Corporations Code leaves the number of directors to the bylaws, with no fixed statutory minimum; see our guide on how many board members a nonprofit needs for why most organizations still choose at least three.

Get an EIN and Apply for 501(c)(3) Status

Apply for a federal EIN directly through the IRS at no cost; see our guide on getting an EIN for a nonprofit. Then apply to the IRS for 501(c)(3) status using Form 1023-EZ ($275 user fee, for smaller organizations under the IRS's size limits) or the full Form 1023 ($600 user fee), per the IRS. Neither the Secretary of State filing nor the Attorney General registration makes an organization federally tax-exempt; that determination comes from the IRS alone.

Keep the Registry of Charitable Trusts Registration Current Every Year

After initial registration, every charitable corporation registered with the Attorney General files Form RRF-1 annually, no later than four months and fifteen days after the end of its accounting period (May 15 for a calendar-year organization). The renewal fee is tiered by the organization's total revenue for the preceding fiscal year: $25 under $50,000, up to $1,200 over $500 million, per the Attorney General's current fee schedule. A copy of the IRS Form 990, 990-EZ or 990-PF (or, for smaller organizations, Form CT-TR-1) is filed along with it.

Audited Financials Once Revenue Passes $2 Million

If a registered charity's total revenue, as reported to the IRS, exceeds $2 million in a reporting period, the RRF-1 instructions require independent audited financial statements prepared under generally accepted accounting principles. Smaller organizations can skip this cost, but it's worth budgeting for once growth brings an organization close to that threshold.

How California's Nonprofit Filing Compares to Its LLC Filing

A California LLC's Articles of Organization cost $70 to file, more than double the nonprofit's $30 Articles of Incorporation fee, and an LLC owes an $800 annual franchise tax to the Franchise Tax Board every year regardless of income. A California nonprofit corporation that holds 501(c)(3) status owes no equivalent state income or franchise tax on its exempt activities, though it still owes the Statement of Information and Registry of Charitable Trusts fees described above.

Three Separate Agencies, Three Separate Deadlines

A new California nonprofit deals with the Secretary of State (incorporation and the Statement of Information), the Attorney General (charitable registration and its annual RRF-1 renewal), and the IRS (501(c)(3) status and Form 990), each on its own schedule and with its own fee. Missing one doesn't satisfy, or get noticed by, the other two, so calendar all three separately from the start.

No Statutory Board Minimum Doesn't Mean No Governance Expectations

Because California's Corporations Code lets the bylaws set board size, it's tempting to start with a single director. In practice, the IRS looks for enough unrelated directors to show independent oversight when it reviews a 501(c)(3) application, and a one- or two-person board struggles to maintain quorum or handle a conflict-of-interest recusal. Most California nonprofits choose at least three directors even though the state doesn't require it.

Missing the Statement of Information Has Real Consequences

Failing to file the SI-100 on time can draw a $250 penalty and, in continued cases, suspension by the Secretary of State or revocation of tax-exempt status by the Franchise Tax Board. Because the filing is only required every two years, it's easy to lose track of between other, more frequent obligations; put the next due date on your calendar the day you file.

Budget for an Audit as You Approach $2 Million in Revenue

The independent-audit requirement applies at $2 million in total revenue, not net assets, so a growing organization with significant pass-through grants can cross that line faster than its program budget alone might suggest. Build the cost of an audit into your financial planning well before you expect to hit the threshold.

This Is Not Legal Advice

California's specific requirements for articles content, registered agent and officer information on the Statement of Information, and Registry of Charitable Trusts exemptions can change and depend on your organization's specific activities. Confirm current requirements directly with the Secretary of State and the Attorney General, and talk to a nonprofit attorney for anything beyond a straightforward, single-state formation.