You are starting a new nonprofit organization, and you are anxious to put some money in the bank and get up and running as soon as possible. Whether you are funding the organization in the beginning or raising funds from others, the organization will need its own bank account. Below are answers to some frequently asked questions about setting up your organization’s bank account.
When can I open a bank account for my organization?
You can open a bank account for your organization once you have an EIN and your organization’s approved incorporating documents from the Secretary of State’s office.
What paperwork will I need to provide to the bank when opening a bank account for my organization?
In our experience, this will depend on the bank. You will certainly need to have a copy of the organization’s EIN letter and approved incorporating documents.
The incorporating documents have different titles depending on the state in which your organization is incorporated. This document is most often referred to as the Articles of Incorporation, though in some states it might have a different name, such as but not limited to Certification of Formation.
When you go to the bank to open an account for your organization, it might also be wise to take a copy of the signed and approved Bylaws of your organization and meeting minutes documenting that the organization’s Board of Directors authorized you to open a bank account on the organization’s behalf.
What type of account do I need to open?
This is an excellent question that often comes up when organizations are wishing to open a bank account. Many banks do not have a specific designation for a nonprofit organization and typically only offer account options such as small businesses: LLC, C-Corp, S-Corp, etc., all of which are types of for-profit companies.
So, it will be best to sit down with your banking officer and ask them if they have an option for a nonprofit corporation. If not, you can ask them to select the option for C-Corp, as many banks list nonprofit organizations under the C-Corp designation, though it is technically incorrect. Then ask to examine the subsections of that C-Corp option. There may be a choice for nonprofit corporation as a subsection of C-Corp. Another possibility is to open a bank account as a small business without a specific type of corporate designation.
If the bank officer cannot recommend a good option for your nonprofit corporation, it would be best to speak with the branch manager to make sure that your bank account is set up properly.
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