Hawaii Nonprofit Corporation
Tax-exempt 501c3 status for your organization
When submitting your Articles of Incorporation, there are two types of corporations
you can form in Hawaii: nonprofit corporation and for-profit corporation.
While profits of a for-profit corporation are passed on to shareholders, a nonprofit
corporation in Hawaii reinvests its profits—either back into the organization
to improve services, or into the community.
However, there are a few important issues to be aware of with regard to tax-exemption.
Registering a Hawaii Nonprofit Corporation
Filing Articles of Incorporation (using Form DNP-1) with the BREG office in Honolulu
will form a nonprofit corporation in Hawaii. However, this filing on its own will
not give your organization tax exemption, which it would need in order to collect
tax-deductible donations, enjoy discounted postal rates, and other benefits tax-exempt
organizations might enjoy. (For information about tax exempt organizations, see
the below section on 501c3 filings.)
In addition to the
Articles of Incorporation, there are a few other requirements to register
your nonprofit corporation in Hawaii:
Any corporation, nonprofit or not, must keep a Registered Agent on file with the
BREG offices in Honolulu. The registered agent can be an individual or a business
entity (other than the nonprofit corporation being formed); an individual agent
must have a physical address in Hawaii, and a business agent must be registered
as a Hawaii business.
Registered Agents can be changed at any time, but it is your responsibility to update
your organization's records with the state.
A nonprofit corporation is required to have very specific bylaws. Rather than being
filed in a state office, such as the Department of Commerce and Consumer Affairs,
your nonprofit bylaws will be adopted by the board of directors and should be kept
on file internally.
The bylaws will lay out information that goes beyond that contained in the nonprofit
Articles of Incorporation, laying out contingencies for replacing or removing directors
or corporate officers, dissolving the corporation and dealing with remaining assets,
and so on.
Hawaii nonprofit corporations (as well as for-profit corporations and LLCs) must
file an annual report each year following the year of incorporation. Prolonged failure
to do so may result in involuntary dissolution.
501c3 Tax Exemption
If you'd like to accept tax-deductible donations under IRS Code 501c3, registering
as a nonprofit corporation in Hawaii isn't enough. You'll also need to apply for
with the IRS.
501c3 tax-exempt status is only eligible for nonprofit organization registered with
one of the following purposes:
- Prevention of animal or child abuse
- Fostering amateur sports competitions
After you are fully registered as a Hawaii nonprofit corporation, you will send
IRS Form 1023 to the IRS. They may take up to 9 months or longer to process the
application, so it's important to do this well ahead of scheduling any fundraisers
or other activities for which you must officially hold tax-exempt status.
Other Businesses in Hawaii
If a nonprofit corporation isn't right for your situation, take a look at the links
below to learn more about other for-profit entity types available in the state: