West Virginia State Parks Foundation

 

This page provides general information about the steps to follow to create a new foundation to support a West Virginia state park.  It is assumed that the new foundation will be a West Virginia non-stock nonprofit corporation and will request 501(c)(3) nonprofit designation from the Internal Revenue Service.

Please Note: This page is still an early draft.  Please let Bob Hoke (bob@rhoke.net or 301-725-5877) know if you have any corrections or suggestions for improvements, or if you have questions.

There are some initial expenses to get a new foundation started ($25 filing fee for incorporating in West Virginia and $275 to apply for IRS tax-exempt status).  The Foundation has recently established a program to reimburse new foundations for the $300 startup cost.  Contact the WVSPF Treasurer for more information on this program.

1. FIND YOUR INITIAL PEOPLE:
Get a group of people who will form the initial leadership of the new corporation.  The directors and officers of the new foundation will be selected from these people.

2. PICK A FOUNDATION NAME:

Your corporation's name must contain one of the following words or an abbreviation of one of the following: “corporation,” “incorporated,” “limited,” or “company.”  The most common name for park foundations is "Parkname State Park Foundation, Inc.".

Your corporation's name must be distinguishable from the names of other business entities already on file with the West Virginia Secretary of State. Names may be checked for availability at the West Virginia Secretary of State business name database.

You may reserve a name for 120 days by filing an Application for Name Reservation with the West Virginia Secretary of State. The reservation must be filed by mail and the filing fee is $15.  However, this is probably not necessary since you have just checked to see that your proposed name is not already in use.

3. GET AN EMPLOYER IDENTIFICATION NUMBER FROM THE IRS:
You will need an Employer Identification Number (EIN).  Go to the IRS Web site here to apply online.  You should select the options for starting a new corporation.  You will need to enter the name and Social Security Number of the person filing the EIN application.  You will then have to enter the address of the corporation.  Once you submit the application you will receive the EIN.

4. SIGN UP FOR ON-LINE REGISTRATION AT THE WV SECRETARY OF STATE'S WEB SITE:
Go to https://www.business4wv.com/ and sign up.  You will need to pick a user name and password.  Most of the remaining steps in establishing your corporation will be done through the Web site.


5. APPOINT A REGISTERED AGENT:
Every West Virginia corporation must have an agent for service of process in the state. This is an individual or corporation that agrees to accept legal papers on the corporation's behalf if it is sued. A registered agent may be an individual who resides in West Virginia, or a corporation or limited liability company authorized to do business in West Virginia. The registered agent must have a physical street address in West Virginia. The agent should agree to accept service of process on your corporation's behalf prior to designation.

6. PREPARE AND FILE YOUR ARTICLES OF INCORPORATION:
Your corporation is legally created by filing Articles of Incorporation with the West Virginia Secretary of State. The articles must include:
a. The corporate name and address; the name and address of agent for service of process;
b. The nature of your business; the number of shares the corporation is authorized to issue;
c. The name and address of each incorporator;
d. The number of acres of land the corporation holds or expects to hold in West Virginia.
e. A required dissolution clause that insures that assets are disposed of correctly.

The articles may be filed online at the Business4wv.com Web site.  Be sure to use the form for a nonprofit corporation because it includes the required dissolution clause.  This clause must also be part of the Article of Incorporation when you apply for IRS tax-exempt status.

The filing fee is $25 for a nonprofit corporation.  Since you don't have a bank account someone will need to pay the fee with a credit card and later be reimbursed.

Here are some examples of Articles of Incorporation for some WV park foundations:
http://wvspf.org/aoi.pdf (West Virginia State Parks Foundation)

7. PREPARE YOUR BYLAWS:
Bylaws are an internal corporate document that set out the basic ground rules for operating your corporation. They are not filed with the state. Your corporation is not legally required to have corporate bylaws, but you should adopt them because they (1) establish your corporation's operating rules, and (2) help show banks, creditors, the IRS, and others that your corporation is legitimate.  Look at other organization's bylaws as examples:
http://www.wvspf.org/bylaws.pdf (West Virginia State Parks Foundation)
http://www.msrlha.org/documents/bylaws.pdf (Mountain State RR & Logging Hist. Assoc. - Cass)

Also, there are many Web sites that provide suggestions for creating bylaws.  Here are a few links:

http://nonprofitally.com/start-a-nonprofit/nonprofit-bylaws (click the topics for details)
http://form1023.org/how-to-draft-nonprofit-bylaws-with-examples (complete, complex, bylaws example)

http://ctb.ku.edu/en/table-of-contents/structure/organizational-structure/write-bylaws/main (scroll down to details).
 
 
8. APPOINT DIRECTORS:
The incorporator—the person who signed the articles—must appoint the initial corporate directors who will serve on the board until the first annual meeting of shareholders (when the board members who will serve for the next term are elected by the shareholders).

9. HOLD YOUR FIRST DIRECTORS MEETING:
The first meeting of the corporation's board of directors should be held at which the directors can appoint corporate officers, adopt bylaws, select a corporate bank, and set the corporation's fiscal year. The directors' actions must be recorded in corporate minutes prepared by the incorporator or any of the directors. It is usually necessary to prepare the minutes over one or two weeks, and then send them to all the directors for their signature.

10. REGISTER AND GET A BUSINESS REGISTRATION CERTIFICATE
:
Every business in West Virginia must register with the West Virginia State Tax Department before commencing business activities in the state. There is normally a $30 fee, but the fee is waived for nonprofit corporations.   To register with the West Virginia State Tax Department, you must complete the Application for Registration Certificate (Form WV/BUS-APP) on the West Virginia business4wv website.

11. BUSINESS LICENSES:
As long as you don't have employees, don't sell things, and don't use gambling to get money, you probably don't need any additional West Virginia business licenses.  Check with your local county to make sure they don't have any local requirements.


12. OPEN A BANK ACCOUNT
:
Once you are a real cor
poration you can open a bank account.  You should have at least two people on the account.  One should obviously be the Treasurer, and any others should be folks who are stable and are likely to remain involved with the foundation for an extended time.  Caution: Be sure to use the foundation's EIN for the bank account and not someone's Social Security Number. 

13. APPLY FOR IRS TAX-EXEMPT STATUS
:
You need to fill out an IRS Form 1023 to request exempt status.  There is an on-line version that can probably be used.  Go to https://www.irs.gov/uac/About-Form-1023EZ to get started.  You will need to go through a long checklist of questions to see if you are eligible to use the short 1023-EZ form.  Assuming you are, register with pay.gov, and complete the Form 1023 form.  You will have to pay a $275 fee using a credit card through the Pay.gov Web site.  (The fee was reduced from $400 to $275 on July 1, 2016).  The 1023 instructions explain the process.

Line 1 of the Form 1023 asks for the 3-character NTEE code that best describes your foundation's purpose.  The full list of codes is in the 1023 instructions, but any of the following codes seem to be appropriate:
C11 - Single Organization Support for Environmental Quality, Protection, and Beautification
N11 - Single Organization Support for Recreation, Sports, Leisure, Athletics
T11 - Single Organization Support for Philanthropy, Voluntarism, and Grantmaking Foundations
W11 - Single Organization Support for Public, Society Benefit - Multipurpose and Other

Another note: Although your corporate name says "Foundation", you are going to be a public charity, not a private foundation as the IRS defines it.  Don't let the wording on the Form 1023 confuse you.

IRS publication 557 "Tax-Exempt Status for Your Organization" gives much more detail about tax exempt status.  It's at https://www.irs.gov/pub/irs-pdf/p557.pdf and is worth reading.

14. ANNUAL REPORT REQUIREMENTS
:
Each year the corporation must file two reports:

1. West Virginia requires a very simple report and a $25 fee.  Go to business4wv.com, log in and select "Annual Report" in the "File Annual Reports" list in the "Business Filings" tab on the left side of the main screen.  The hardest part of the form is listing the addresses for the foundation's officers and up to two of its directors.  There is a $25 annual fee for filing the report. 

One thing the Annual Report form asks for is your 4-digit "Business Purpose" code. 
This is the NIACS code and none seem to really fit a foundation's purpose.  Codes commonly used by foundations include 7139 (Other Amusement and Recreation Industries Including Golf Courses and Fitness Centers, Marinas and Skiing Facilities) and 8132 (Grantmaking and Giving Services). 

2. Until your foundation has over $50,000 in gross annual income, you must electronically file a Form 990-N report with the IRS each year.  Go to www.irs.gov/990n for instructions and a link to the form.  It takes about 10 minutes to complete the form and there is no fee.  If you have over $50,000 in gross income you will have to file a more complex Form 990-EZ or Form 990.


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This page last modified or verified on December 9, 2017