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Filing Articles of Incorporation in Kentucky


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									  A Step-By-Step
Reference Guide To
Creating A 501(C)3

   Holly West, MS, MPM
   Rhonda Woolum, RN
       Erin Schaffner, BS
   What is a 501(C)3?
   And why do I need one?

A 501(C)3 is a type of corporation recognized by
the federal government as an organization whose
general purpose is educational, religious or

Local Health Departments operate as non-profit
organizations but are ineligible for IRS 501(C)3
status because they receive a substantial
portion of their operating funds from the state.

Local Health Departments who develop a separate non-
profit charity with 501(C)3 status will increase access to
to grant funding by as much as 90%.

For tax deduction purposes and legal processes, most
foundations require applicants to obtain 501(C)3 status
to be eligible for grant funding. This restriction on financial
support severely limits funding opportunities available to
public health departments.

In addition, 501(C)3 organizations have increased ability to
fundraise as a means to increase financial support.
    Things To Consider Before
     Beginning The Process…

The process of developing a ―501(C)3‖ is daunting.
Organizations can expect to spend countless hours, days,
weeks, months and possibly years completing all
necessary components before actually receiving IRS
501(C)3 determination.

The cost of developing a ―501(C)3‖ is also a concern. Most
applicants can expect to pay a one-time user fee of $750 to
the IRS for consideration of their application.
Organizations, however, who do not expect their gross
receipts to exceed $10,000 annually may pay a reduced fee
of $300.

Most importantly each individual health department
should evaluate their need before embarking on this
process. It is not always necessary to develop a 501(C)3 as
a means to increase funding. Health departments should
explore their financial options wisely, creating a separate
non-profit entity requires a lot of extra work both during
and after the filing process.
If 501(C)3 Status Is In
 Your Future….

If you are still set on developing a ―501(C)3‖ here are
some options to consider:

    Look within you community for help creating your
     charity. Financial and legal advice/assistance can
     speed up the filing process by months! If you decide
     the ―do it yourself‖ method you can refer to: or try purchasing
     Susan Deja’s book, ―Preparing Your Own 501(C)3

    Consider collaborating with other health departments
     or community health agencies to reduce the overall
     filing costs. Ten health departments partnered
     together to establish ―Eastern Kentucky Public Health
     Inc.‖and was able to reduce individual filing fees
     below $100.
     So I’ve Decided To Create A
     501(C)3…..Now What?

1)    The first step in establishing a ―501(C)3‖ is to gain
      community support for your organization and form an
      initial board of directors. For filing purposes at least 3
      individuals are required to begin the process.

2)    Next, you will need to choose a name for you
      corporation and contact the Kentucky Office of the
      Secretary of State to confirm name availability. You can
      conduct your own name availability search online at:

3)    Once you have confirmation that your business name is
      available you will need to complete the Kentucky
      Articles of Incorporation paperwork for a Non-Profit
      Corporation. This form can also be obtained online at
      the Kentucky Office of the Secretary of State website or
      can be found in the Appendices. An $8.00 filing fee is
      also required with the application. NOTE: A MORE
     So I’ve Decided To Create A

4.    All federally recognized businesses must obtain an
      Employer Identification Number (EIN) from the IRS.
      An EIN is required for all 501(C)3 applications
      regardless of whether your corporation has employees.
      To obtain an EIN contact the IRS Business & Specialty
      Tax Line at (800) 829-4933 or visit their webpage at,,id=9
      7860,00.html. Refer to Appendices for the formal
      document. (All previous steps must be completed prior
      to applying for an EIN).
Drafting Formal Articles of

Articles of Incorporation (AOI) are an official statement of
creation of an organization. AOI’s are important to protect
both the board and members of the organization from
legal liabilities incurred by the organization. AOI’s make
the corporation the holder of debts and liabilities, not the
individuals and officers affiliated with the organization.
A generic outline for the contents of the AOI for a non-
profit corporation is as follows:

ARTICLE 1: The name of the corporation
ARTICLE 2: The name and address of the registered agent
            of the corporation.
ARTICLE 3: The purpose(s) for which the corporation is
            being formed.
ARTICLE 4: A statement of the number of initial directors
           and their names and addresses.
ARTICLE 5: A statement defining the period of existence of
           the corporation. If it is indefinite– it would be
          defined perpetual.
ARTICLE 6: A statement detailing the provisions for
ARTICLE 7: A statement of the exemption requirements
ARTICLE 8: Contact information for all incorporators.
       Drafting Bylaws…

―An organization’s success depends in large part on how well
        it goes about establishing its structures and methods
                       for making decisions…‖

                         (A generic outline)

I.          What is the name of the organization?
II.         What is the purpose or mission of the organization?
III.        What kind of corporate structure will be established?
IV.         Membership
V.          Officers
VI.         Board of Directors
VII.        Meetings
VIII.       Contracts, loans, checks and deposits
IX.         Miscellaneous Provisions

       A sample draft of Eastern Kentucky Public Health Inc’s
             Bylaws can be found in the Appendices.
Completing Tax Form 1023

Form 1023 is the official Application for Recognition of
Exemption Under Section 501(C)3 of the Internal Revenue
Code. Form 1023 is complex and frightens many potential
applicants away with one glance. Many self-help manuals,
however, like the one by Susan Deja, are available and
should be utilized by those who are unfamiliar with the

For additional information you can call the IRS Exempt
Organizations Customer Account Services toll-free at

 Both form 1023 and instructions can be found in the
Almost There…

Once you have chosen an available name for your
organization, received confirmation of your EIN from the
IRS, filed AOI paperwork with the state, drafted formal
AOI and Bylaws and completed form 1023 you can
relax…for awhile. The waiting process for 501(c)3
determination can be lengthy. You can expect to wait
anywhere from 6 weeks to 12 months depending on the
accuracy of your application and the number of
applications waiting to be reviewed.

In the meantime you can begin more formal strategic
planning for your organization. Some foundations will
even allow you to apply for grants once you have
submitted your 501(C)3 application.

Finally, give yourself a pat on the back. You deserve it and
you know it!!! Good luck with your application. Statistics
show that the majority of all applicants are approved!
                           EASTERN KENTUCKY PUBLIC HEALTH INC.

Article 1. NAME
1.1   Name. The name of the organization shall be Eastern Kentucky Public Health, Inc.
      (“CORPORATION”) and shall operate as a non-profit, non-stock Corporation.

2.1   Purpose. To operate as a charitable organization organized exclusively for charitable,
      educational, and scientific purpose, including, for such purposes, the making of distributions to
      organizations that qualify as exempt organizations under 501(c)3 of the Internal Revenue
      Code, and to solicit, receive, and manage contributions from individuals, businesses, and
      organizations made for the above purposes.

2.2   Propaganda. The CORPORATION shall not carry on propaganda or otherwise attempt to
      influence legislation and shall not participate in any political campaign on behalf or in
      opposition to any candidate for public office.

3.1    No Capital Shares. The CORPORATION shall have no capital shares or shareholders, and
       its business and affairs shall not be conducted for private pecuniary gain or profit, nor shall
       any of the CORPORATION’s gain profit or property inure to incorporators thereof, nor any
       officer or director thereof, but the CORPORATION’s entire gain, profit, net earnings and
       property shall be devoted exclusively to the charitable and other uses and purposes set out in
      Article II of these Bylaws.

3.2   Compensation. The CORPORATION shall be authorized to pay reasonable compensation for
       services rendered to any third-party individual and/or Corporation.

3.3    Loans. No loans shall be made by the CORPORATION to its officer or Directors
4.1 Qualification of Members. Membership will be open to all interested parties residing in the
      Eastern Kentucky counties of: Boyd, Carter, Elliot, Floyd, Greenup, Johnson, Lawrence,
      Lewis, Magoffin and Pike.

Article V.   OFFICERS
5.1   Number. The officers of the CORPORATION shall be a President, a Vice-President, a
      Secretary and a Treasurer. Additional officers and assistant officers may be deemed
      necessary, may be elected or appointed by a majority vote of the current directors.

5.2   Appointment. The President, Vice-President, Secretary, and Treasurer will be approved by
      the general membership after being selected by the current Board of Directors at the first
      annual meeting of the calendar year.

5.3   Term. The officers of the CORPORATION shall be elected annually. Each officer shall hold
      office until his successor has been duly elected and shall have qualified or until his death,
      resignation, or removal in a manner provided within these bylaws.

5.4 Duties of the President.
         a. The President shall be the chief executive officer of the organization; he/she shall
             preside at all meetings of the members of the Board of Directors, he/she shall have
             general and active management of the affairs of the CORPORATION, shall see that all
             orders and resolutions of the Board of Directors are carried into effect, subject,
             however, to the right of the Directors to delegate any specific powers, except such as
             may be by statute exclusively conferred on the President, to any other officers of the

        b. The President shall be responsible for calling all regular and special meetings of the

        c. The President shall be responsible for giving guidance to all activities of the
       d. The name of the President shall be one of the names on the signature card at the bank
          and shall have the authority to sign checks for the CORPORATION. The President may
          appoint committees as needed and membership of said committees shall be ratified by
          the Board of Directors.

5.5 Duties of the Vice President.
       a. The Vice-President shall act in all cases for and as the President in the latter’s absence,
          incapacity, or at the President’s request, and shall perform such other duties as he may
          be required to do from time to time.

       b. The Vice-President shall be responsible for call all regular and special meetings of the

       c. Should an elected office be vacated, the Vice-President shall assume the corresponding
          duties until a new officer is elected.

5.6 Duties of the Secretary.
        a. Keep the minutes of the meetings of the Board in one or more books provided for that
           purpose, see that all notices are duly given in accordance with the provisions of these
           Bylaws or as required by law, accept notification of proxies from Board.

        b. Be custodian of the corporate records and of the seal, if any, of CORPORATION, be
           responsible for authenticating records of CORPORATION, keep a register of the
           contact information for each member of the Board; and in general, perform all duties
           incident to the office of Secretary and such other duties as from time to time may be
           assigned to the Secretary by the Chairman of the Board, the President or the Board.

5.7 Duties of the Treasurer.
        a. The Treasurer will have custody of the corporate funds and securities and shall keep
           full and accurate account of receipts and disbursements in books belonging to the
           CORPORATION, and shall keep the monies of the CORPORATION in a separate
           account to the credit of the CORPORATION.
      b. The Treasurer shall disburse funds of the CORPORATION as may be ordered by the
         Board of Directors, taking proper vouchers for such disbursement, and shall render to
          the President and Directors, at the regular meetings of the Board, or whenever they may
          require it, an account of all transactions as Treasurer and of the financial condition of the

6.1    Number and Composition of Board of Directors. The number of directors of the
       CORPORATION shall not be less than one nor more than twelve. Each director shall hold
       office until the next annual election and until his successor has been elected and qualified.
       The composition of the Board of Directors shall initially consist of the elected officers
       including the President, Vice-President, Secretary, Treasurer and four members at large, for
       a total of eight members.

6.2 Organization Management. The business and affairs of the CORPORATION shall be
       managed by its Board of Directors, as may be chosen from time to time. The Directors must
       meet the eligible membership requirements of the organization.

6.3 Two-Thirds Majority Rule. A two-thirds majority of Directors in office shall be necessary to
      constitute a quorum for the transaction of business and the acts of a majority of the Directors
      present at the meeting at which a quorum is present shall be acts of the Board of Directors.

6.4 Voting Rights. Each Director shall have one vote.

6.5 Vacant Director Seat. Should the seat of director be vacated for any reason, the Board may
      name a replacement by the vote of majority of directors then in office.

6.6 Succession of Power. The line of responsibility shall be defined as President, Vice-President,
      Secretary, Treasurer, and general Directors.
6.7 Emergency Quorum. The quorum shall be suspended in case of an emergency, as
    deemed such by at least two officers and at least one other Director. The Directors so
     acting shall make a good faith attempt to give notice to all other Directors. Any vote
     taken under such circumstances shall require the unanimity of those members of the
     board present at the time.

6.8 Committees. The board, by resolution, may designate from among its members an
     executive committee and any other committees, each consisting of at least one director
     and/or member and additional member of the CORPORATION.

6.9 Attendance Requirement and Proxy. Board members are expected to attend each
    regular Board meeting. If a Board member anticipates having to miss a regular meeting,
    he or she shall have another Board member, serve as Proxy at the Board meeting. Notice
    of Proxy shall be given prior to the meeting to the Secretary.

6.10 Removal and Resignation. Any member of the Board may be removed, with or
      without cause, by an affirmative vote of 2/3 of the Board or by operation of these
      bylaws. Any member of the board may resign from the Board at any time by giving
      thirty (30) days written notice to the Board.

6.11 Vacancies. In the event a vacancy in the Board caused by the resignation of a current
      Board member or the normal rotation of directors into an officer’s role, the current
      Board will review potential candidates for membership on the board and present a
      recommendation to the board for approval.

6.12 Contract Rights of the Board. Election or appointment of a director, officer or agent
      shall not affect that individual’s contract rights, if any, with CORPORATION. The
      resignation of a director, officer or agent shall not affect CORPORATION’s contract
      rights, if any, with the officer.
6.13 Manner of Acting. The act of the majority of the directors present at a meeting at
      which a quorum is present shall be the act of the directors.

6.14 Compensation. No compensation shall be paid to directors, as such, for their services
      as a director. Nothing herein contained shall be construed to preclude any director
      from serving the CORPORATION in any other capacity and receiving compensation

7.1 Meetings of the Board. Regular meetings of the board shall be held at least two times \
    per year and shall be set by the Board for the purpose of transacting such business as
    may come before the meeting. The date, time and place of all meetings of the Board
    shall be designed by the President, at the first meeting following election of the officers
    each year. Such date, time and place may be changed upon at least 48 hours written
    notice by personal delivery, mail, fax, or electronic mail to each of the Directors. The
    first meeting of the Board shall occur in January of each calendar year for the purpose
    of electing officers. The second meeting shall occur approximately six months

7.2 Special Meetings. Special meetings of the Board may be called, by or at the request of,
    the President or any five directors of the CORPORATION. Notice of the date, time and
   manner of any special meeting shall be given at least 48 hours prior thereto by written
   notice faxed, electronically mailed, or delivered personally to each Board Member.
   Special meetings of the Board may be held at any such place as many be specified in the
   notice of the meeting, via telephone conference call, or via other electronic means,
   provided that all Board members are given the opportunity to participate, and shall not
   be excluded for any reason if such desire to participate is expressed. If such meeting is
   conducted via electronic means, the meeting shall be considered to commence at the time
   of transmittal by the party initiating the special meeting, and shall be considered
   adjourned by the end of business two days following commencement of such meeting.
   Business that is conducted at a special meeting via conference call or electronic means is
   only valid if each and every Board member has cast an affirmative or negative vote, or
    proactively enters an abstention to the record, in written form, as set forth in these
7.3 Quorum and Voting. Unless the Articles require a greater or lesser number, a two-thirds
    majority of the number of directors elected shall constitute a quorum of the Board; provided,
     however, that if less than a two-thirds majority of the directors are present at said meeting, a
     majority of the directors present may adjourn the meeting from time to time without further

7.4 Action Without a Meeting. Any action required or permitted to be taken at any meeting of the
    Board may be taken without a meeting if the text of the resolution of matter agreed upon is sent
    to all of the Directors in office all the Directors in office consent to such action in writing
    setting forth the action taken. Consent will be deemed granted upon receipt of written notice to
    such to the President or Executive Director by the date and time specified in the request for
    action. Email and faxed consents shall also fit the definition of “written notice.” Such consent
    in writing shall have the same force and effect as a vote of the Board at a meeting and may be
    described as such in any document executed by CORPORATION.

8.1 Contracts. The Board may authorize any officer or agent to enter into any contact
      negotiations and deliver any instruments in the name of and on behalf of CORPORATION.
      Such authority may be general or confined to specific instances. In any case, all contracts
      over the amount of $500.00 much be executed only upon Board approval. No Board Member
     can enter any contract individually.

8.2 Corporate Loans. No loans shall be contracted on behalf of CORPORATION, and no
    evidences of indebtedness shall be issued in CORPORATION’s name, unless authorized by a
    resolution of the Board. Such authority may be general or confined to specific instances. Only
    officers with official financial signatory authority as set forth in these Bylaws, or by resolution
    of the Board may execute these documents on behalf of CORPORATION. Such agreements
    shall only be entered into upon Board approval.

8.3 Checks, Drafts, Etc. All checks, drafts or other orders for the payment of money, notes or
    other evidences or indebtedness issued in the name of CORPORATION shall be signed by
    such officer or agent of CORPORATION and in such manner as shall, from time to time, be
    determined by resolution of the Board, and in accordance with these bylaws.
8.4 Deposits. All funds of CORPORATION not otherwise employed shall be deposited, from time
     to time, to the credit of CORPORATION in such banks, trust companies and other
    depositories as the Board may select.

9.1 Construction. Unless the context specifically requires otherwise, any reference in these
    Bylaws to any gender shall include all other genders, any reference to the singular shall include
    the plural and any reference to the plural shall include the singular.

9.2 Limitations. Notwithstanding any other provision hereof, including, but not limited to, any
    provision of its Bylaws, CORPORATION shall take no action contrary to the provisions of any
    laws or regulations governing the entity.

9.3 Severability or Provisions. If any provision of these Bylaws, or its application to any person or
    circumstances, is held invalid or unenforceable by a court of competent jurisdiction the
    remainder of these Bylaws, or the application of such provisions to persons or circumstances
    other than those to which it was held to be invalid or unenforceable, shall not be affected
    thereby, and to this extent, the provisions of these Bylaws are severable

9.4 Amendments to these Bylaws. These Bylaws may only be amended by affirmative vote of 2/3
    of the Board, at a regular meeting, after having at least thirty (30) days to review the
    amendments. Any and all amendments shall be made in accordance with all federal, state and
    local laws and regulations, and provisions set forth in the CORPORATION Bylaws.

9.5 Indemnity. To the full extent permitted by the laws of the Commonwealth of Kentucky, the
    CORPORATION shall indemnify its Directors, Officers, and Members for, and hold the same
    harmless from, any loss or damage incurred by them by reason of any act or omission so
    performed or omitted by them (and not involving fraud, bad faith or gross negligence). To the
    full extent authorized or permitted by the Act, the CORPORATION shall pay or reimburse
    reasonable expenses (including reasonable attorneys' fees) incurred by them in a proceeding in
    advance of final disposition of such proceeding, provided they agree, in such form as the other
    Directors, Officers, and/or Members, respectively shall request, to reimburse the
   CORPORATION if it is ultimately determined that the Directors, Officers, and/or Members did
    not meet the standard for indemnification set forth in this section. The CORPORATION may
    purchase and maintain insurance on behalf of the Directors, Officers, and/or Members against
   any liability asserted against or incurred by a Directors, Officers, and/or Members as a result of
    being a Directors, Officers, and/or Members, whether or not the CORPORATION would have
    the power to indemnify such person against the same liability under the provisions of this
    section or the laws of the Commonwealth of Kentucky.

9.6 Notifications. All Notices required or permitted under this Agreement must be in writing and
    delivered personally against a written receipt, sent by reputable messenger service (such as
    Federal Express, UPS, etc.) for overnight delivery, transmitted by confirmed telephonic
   facsimile (fax), sent by certified, express, or registered mail, postage prepaid, return receipt
    requested, or sent via electronic mail. A Notice to the Company must be addressed to the
   Company at the Company's principal office. Any party may designate, by notice to all of the
   others, substitute addresses or addressees for Notices, and thereafter Notices are to be directed
    to those substitute addresses or addressees.

9.7 Complete Agreement. This Agreement constitutes the complete and exclusive statement of
    the agreement among the Directors, Officers, and Members. It supersedes all prior written and
   oral statements, including any prior representation, statement, condition, or warranty.

9.8 Applicable Law. All questions concerning the construction, validity, and interpretation of this
    Agreement and the performance of the obligations imposed by this Agreement shall be
    governed by the internal law, not the law of conflicts, of the Commonwealth of Kentucky.

9.9 Section Titles; Section References. The headings herein are inserted as a matter of
    convenience only, and do not define, limit, or describe the scope of this Agreement or the
    intent of the provisions hereof. All references herein to Sections shall refer to Sections of this
    Agreement unless the context clearly requires otherwise.

9.10 Binding Provisions. This Agreement is binding upon, and inures to the benefit of, the parties
      hereto and their respective executors, administrators, heirs, successors, and permitted
9.11 Counterparts. This Agreement may be executed simultaneously in two or more
     counterparts each of which shall be deemed an original, and all of which, when taken
      together, constitute one and the same document. The signature of any party to any
     counterpart shall be deemed a signature to, and may be appended to, any other counterpart.

The above Bylaws were adopted by the Eastern Kentucky Public Health, Inc. Board of Directors
effective as of ________________, 2009









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