How to Start a 501(c)(3) Nonprofit in California: Complete Guide
Starting a 501(c)(3) nonprofit in California takes six steps and involves four government agencies: the Secretary of State, the IRS, the Franchise Tax Board (FTB), and the Attorney General. The order matters. You need a formed corporation before the IRS will consider your application, and you should not accept donations until you know your registration deadline. This guide explains how to start a nonprofit in California from the first filing through ongoing compliance, lists the government fees, and closes with a comparison against forming an LLC.
This article is informational content, not legal or tax advice. Nonprofit formation involves governance, tax exemption, and charitable trust rules that depend on your facts. Consult a qualified attorney and a certified public accountant (CPA) before you file, especially if you plan to hold property, hire staff, or run an income-producing activity.
The Six Steps at a Glance
- Incorporate as a California nonprofit public benefit corporation with the Secretary of State.
- Obtain a federal Employer Identification Number (EIN) from the IRS.
- Apply to the IRS for 501(c)(3) recognition.
- Apply to the FTB for California tax exemption.
- Register with the Attorney General's Registry of Charities.
- Maintain ongoing state and federal filings on an annual and biennial schedule.
Step 1: Incorporate as a Nonprofit Public Benefit Corporation
Your first filing is Articles of Incorporation with the California Secretary of State's Business Programs Division. For a 501(c)(3) charity, use the Nonprofit Public Benefit form, ARTS-PB, which costs $30. Religious corporations file ARTS-RE and mutual benefit corporations file ARTS-MU, both also $30, but a charity almost always files as a public benefit corporation.
Keep these details in mind as you prepare the filing:
- Name reservation (optional): You can reserve a name for $10 for 60 days. The reservation cannot be renewed for consecutive periods. Check availability on the Secretary of State name availability page.
- Purpose and dissolution clause: The articles must state the organization's purpose and include the dissolution language the IRS requires, which directs remaining assets to another exempt purpose when the organization closes. Ask an attorney for the exact wording instead of copying a template.
- Bylaws: Bylaws are not filed with the Secretary of State, but you must adopt them, and the Attorney General will require a copy in Step 5.
- Agent for service of process: Name an agent to receive legal papers. The agent must be a California resident individual or a corporation that holds a Corporations Code 1505 certificate.
- Processing time: Online filings through bizfile Online are normally processed in about 5 business days or less. Paper filings take 10 or more business days.
- Expedited service: 24-hour processing costs $350. Same-day processing costs $750 if the filing is received by 9:30 a.m. A 4-hour drop-off option costs $500 and requires precleared documents.
- Certified copies: A certified copy costs $5 per document.
After registration, the corporation files a Statement of Information, Form SI-100, for $20. It is due within 90 days of registration and then every two years. The SI-100 is not an annual report tied to a fiscal year-end, so calendar it from your filing date.
Step 2: Obtain an EIN From the IRS
Every nonprofit needs a federal Employer Identification Number. The IRS issues EINs free of charge at irs.gov. You need the EIN for your IRS exemption application, your bank account, and your California filings. You do not need to pay a third-party service for this step.
Step 3: Apply for 501(c)(3) Recognition From the IRS
Federal recognition comes from the IRS. Two application forms are available, and the user fee depends on which one you file:
- Form 1023: user fee of $600.
- Form 1023-EZ: user fee of $275.
Pay the user fee at pay.gov. Before you choose, check the IRS eligibility worksheet to see whether your organization qualifies for the 1023-EZ. Use the EZ form only if the worksheet shows you qualify. Your IRS determination letter is the document you will need for the FTB and the Attorney General. If you plan to spend money or start operating before the determination arrives, check with the IRS about how that timing affects your exemption's effective date.
Step 4: Get California Tax Exemption From the FTB
Federal exemption does not automatically exempt the organization from California tax, so you apply separately to the Franchise Tax Board.
- If you have a federal 501(c)(3) determination and no prior California exemption, file Form 3500A (Submission of Exemption Request) with a copy of your IRS determination letter.
- If you do not have a federal exemption, or your federal exemption was revoked, file Form 3500 instead.
Apply through MyFTB at ftb.ca.gov, or submit the form by mail. Confirm the current filing requirements and any fees on the FTB site before you submit.
Step 5: Register With the Attorney General's Registry of Charities
Every charitable corporation must register with the Attorney General's Registry of Charities within 30 days of first receiving charitable assets, such as donations, grants, or property. The clock starts when the first charitable assets arrive, not when the articles are filed, so track the date of your first gift or grant.
File Form CT-1 through the Attorney General's Online Filing Service at oag.ca.gov/charities. The registration fee is $50. Include:
- your endorsed Articles of Incorporation,
- your bylaws, and
- your IRS determination letter, or a copy of your IRS application if the determination is still pending.
Step 6: Ongoing Filings and Compliance
Once registered, the organization has recurring obligations with several agencies:
- Statement of Information (SI-100): $20 every two years with the Secretary of State.
- IRS annual return: Form 990, 990-EZ, or 990-PF, depending on your size and type. Organizations that file only the Form 990-N e-Postcard file Form CT-TR-1 with the Attorney General instead.
- Attorney General Form RRF-1: filed with the fee in the table below, due 4 months and 15 days after fiscal year end. The Attorney General honors IRS extensions.
- FTB Form 199 or 199N: Form 199N (e-Postcard) is for organizations whose gross receipts are normally $50,000 or less. Other organizations file Form 199. Both are due the 15th day of the 5th month after year end, and an extension moves the deadline to the 11th month.
- Unrelated business income (SB 711): Enacted October 1, 2025, SB 711 requires separate reporting of unrelated business taxable income for each unrelated trade or business, beginning with the 2026 return. The FTB is still developing the form, so check with the Franchise Tax Board for current instructions before you file.
Nonprofits do not owe the $800 minimum franchise tax that applies to LLCs and other entities. Three other obligations can still apply:
- Seller's permit: If you sell taxable goods, such as merchandise at events, register with the California Department of Tax and Fee Administration (CDTFA) at cdtfa.ca.gov. The seller's permit is free. The statewide base sales tax rate is 7.25%, and city and district taxes raise the combined rate to between 7.25% and 11.75%.
- Employer registration: If you have employees, register with the Employment Development Department (EDD).
- Local business tax: California has no general statewide business license. Most cities charge a local business tax or registration certificate, but there is no common formula, so check your city's rules. Counties license only regulated activities.
Government Fees at a Glance
| Filing | Agency | Fee |
|---|---|---|
| Articles of Incorporation (ARTS-PB) | Secretary of State | $30 |
| Name reservation (optional, 60 days) | Secretary of State | $10 |
| Statement of Information (SI-100) | Secretary of State | $20 every two years |
| Form 1023 / Form 1023-EZ | IRS | $600 / $275 |
| Form 3500A or Form 3500 | FTB | Confirm on the FTB site |
| Form CT-1 (initial registration) | Attorney General | $50 |
| Form RRF-1 (annual) | Attorney General | $25 to $1,200, based on total revenue |
The RRF-1 fee depends on total revenue. This schedule is as of January 1, 2022. Confirm the current schedule with the Attorney General before you file.
| Total revenue | RRF-1 fee |
|---|---|
| Under $50,000 | $25 |
| $50,000 to $100,000 | $50 |
| $100,001 to $250,000 | $75 |
| $250,001 to $1 million | $100 |
| $1,000,001 to $5 million | $200 |
| $5,000,001 to $20 million | $400 |
| $20,000,001 to $100 million | $800 |
| $100,000,001 to $500 million | $1,000 |
| Over $500 million | $1,200 |
Nonprofit vs. LLC: Which Structure Fits?
Founders often compare a nonprofit corporation with a California LLC. The two structures serve different goals, and switching later can require approvals, so decide before you file.
| Factor | 501(c)(3) nonprofit public benefit corporation | California LLC |
|---|---|---|
| Formation filing | ARTS-PB, $30 | LLC-1 Articles of Organization, $70 |
| Ownership | No owners or shareholders | Owned by members |
| Use of assets | Must stay devoted to charitable purposes, including on dissolution | Owners may receive distributions |
| Donor deductions | Donors can deduct gifts made to a 501(c)(3) organization | A standard LLC does not have 501(c)(3) status, so its donors do not get the charitable deduction |
| Annual state tax | No $800 minimum franchise tax | $800 minimum annual franchise tax, plus an LLC fee of $900, $2,500, $6,000 or $11,790 once California-source total income reaches $250,000, $500,000, $1,000,000 or $5,000,000 |
| Periodic state report | SI-100, $20 every two years | Statement of Information (LLC-12), $20 every two years |
| Charity registration | Attorney General CT-1 and annual RRF-1 | None |
An LLC that first taxes in 2027, 2028 or 2029 may pay $400 in its first year under RTC 17941(g)(2), so confirm the first-year amount with the FTB. Two other LLC limits matter here: California does not allow a domestic series LLC, and an LLC cannot render a licensed professional service, so professional practices use professional corporations instead.
Choose a nonprofit when the goal is a charitable mission that donors fund through deductible gifts and that must outlast any founder. Choose an LLC when you plan to sell products or services, own the business, and take profits. A nonprofit may earn revenue from its activities, but unrelated business income must be reported as described in Step 6.
Official Resources
- Secretary of State, Business Programs Division: sos.ca.gov/business-programs
- bizfile Online filing portal: bizfileonline.sos.ca.gov
- Attorney General, Registry of Charities: oag.ca.gov/charities
- Franchise Tax Board: ftb.ca.gov
- California Department of Tax and Fee Administration: cdtfa.ca.gov
- IRS, Charities and Non-Profits: irs.gov/charities-non-profits
- California Small Business Development Center network: californiasbdc.org
Calendar two dates the moment you file the articles: the 30-day Attorney General registration window, which starts with your first charitable receipt, and the 90-day Statement of Information deadline. Both deadlines are easy to miss. For complex situations, including fundraising, employment, or a mixed nonprofit and business model, work with a qualified attorney and CPA.