Starting a nonprofit is exciting—but missing one critical detail in your formation documents can cost you time, money, and potentially your federal tax-exempt status.
If your goal is to operate as a 501(c)(3) charitable organization, your Articles of Incorporation must include specific IRS-mandated language—and the standard form provided by the Arizona Corporation Commission (ACC) doesn’t include it.
Filing in Arizona Is Only Step One
To legally form a nonprofit in Arizona, you must file Articles of Incorporation with the ACC. But to be recognized by the IRS as a 501(c)(3) tax-exempt entity, your Articles must go further. The IRS requires that your Articles of Incorporation include:
- A specific charitable purpose clause
- A clause limiting political and legislative activity
- A dissolution clause stating that your assets will go to another 501(c)(3) or government entity if the organization shuts down
Without this language, your application for tax-exempt status will be denied or delayed—regardless of whether your mission qualifies.
Even the ACC Cautions Against Using Its Own Form
The ACC’s own instructions state:
“The form provided by the Arizona Corporation Commission complies only with the minimal requirements of Arizona law and does not include any language required by the IRS . . . It is advisable to seek the advice of your tax or legal professional”
That means if you use the ACC’s form without modification, you will have to amend your Articles later, causing unnecessary delays and potentially jeopardizing your nonprofit’s ability to receive grants or tax-deductible donations.
Setting Your Nonprofit Up for Success:
Too many well-meaning founders attempt a do-it-yourself approach, only to encounter preventable roadblocks when applying for 501(c)(3) status. Drafting your Articles of Incorporation correctly the first time is far more efficient and less expensive than fixing them later.
Working with an experienced Arizona attorney ensures:
- Your Articles meet both Arizona legal requirements and IRS standards
- You avoid costly amendments and processing delays
- You are advised on important early decisions (such as bylaws, governance, and trademark protection)
- Your organization is positioned for long-term compliance and success