How to Incorporate a Youth Sports Team
The procedure for incorporating a youth sports team depends upon whether the team is a for-profit or nonprofit endeavor. Theoretically, any sports team can be a for-profit corporation (such as the New York Yankees) but it is much more common for a youth team to operate as a nonprofit so it can accept donations. Incorporating the team as a nonprofit is the first step in gaining IRS recognition as an entity that can offer a tax-deduction for donations. The process is similar to the process of incorporating a for-profit. Both require articles of incorporation, however, nonprofit articles must include some additional information to obtain tax-exempt status.
Visit the U.S. Small Business Administration’s “Business Incorporation” page at the Business.gov website. At the bottom of the page is a “State Business Entity Registration” chart which links to the agency that handles incorporation in each state (usually the secretary of state’s office). Every state has its own procedure for registering businesses and maintains an Internet portal for new registrations that contains step-by-step instructions, fill-in-the-blank templates and, in many states, an electronic filing system for submitting documents. Select the state where your sports team is operating to access the state’s business division.
Check to make sure that the team name you will be using is not in use by another business entity. States require every business to have a unique name that will enable the public to properly identify the business. The state incorporation website will provide a link to a state business entity database that will allow you to conduct a search to make sure your team’s name is not in use.
Navigate to the section of the website that enables you to file nonprofit articles of incorporation. The state website will either have an electronic system with a main login that will enable you to select the type of entity (nonprofit corporation) you would like to form or it will have a “forms and fees” section separated by for-profit corporation and nonprofit corporation. Follow the links to file articles of incorporation for a nonprofit. The website will provide a PDF fill-in-the-blank template for articles of incorporation for a nonprofit to download.
Prepare the articles of incorporation for a nonprofit according to the instructions included with the state form. Depending on the state, the articles will require only basic information, including the names and addresses of the corporation, the registered agent and the person filing out the paperwork (the incorporator). This information is the same whether you are preparing for-profit or nonprofit articles. Nonprofit articles, however, will require additional information so that the corporation will qualify as a state nonprofit and should contain language that will satisfy IRS requirements when the corporation applies for tax-exempt status, including the names and addresses of the initial board of directors, a statement of nonprofit purpose and disclaimers that the corporation will not conduct prohibited activities and will distribute assets to another nonprofit upon dissolution.
File the articles of incorporation with the state and pay the filing fee. States allow filing either by mail, fax, electronically or in-person, depending upon their system. Your team is incorporated as of the date the articles of incorporation are accepted by the state agency.
Many states have nonprofit support organizations or pro-bono legal services that will help a new nonprofit prepare its articles of incorporation and tax-exempt application.
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