Converting an LLC to a Nonprofit in Missouri

Technically, you can’t convert an LLC into a nonprofit corporation in Missouri. While Missouri allows entity conversions from LLC to corporation, this law does not apply to nonprofit organizations. However, you can form a new nonprofit corporation in Missouri and then either dissolve your LLC or keep it for a different purpose. If this sounds complicated, never fear! We’ll take you step by step through the process of turning your LLC into a Missouri nonprofit.

Steps to Change a Missouri LLC into a Nonprofit

Forming a Missouri nonprofit corporation involves filing paperwork with the Missouri Secretary of State, getting an EIN, and adopting nonprofit bylaws. Most nonprofits also apply for tax-exempt status with the IRS. If you don’t want your LLC anymore, you’ll need to file Articles of Termination as well. We explain how below.

1. File Missouri Nonprofit Articles of Incorporation.

To bring your Missouri nonprofit into existence, you need to file Missouri Nonprofit Articles of Incorporation with the Secretary of State. You can file online through Missouri’s Business Registration Online Portal or by mailing the paper form to the Missouri Secretary of State. The filing fee is $25.

Here’s the information you’ll need to include:

• Name of nonprofit corporation. Must be must be distinguishable from any other Missouri business name. So if you want to use the same name as your current LLC, you’ll need to dissolve the LLC first and remove the LLC identifier from the name.
• Nonprofit type. Whether the nonprofit is organized for the public benefit or for the mutual benefit of its members.
• Duration. If you don’t have a planned end date, write “Perpetual.”
• Registered agent. The name and address of the person or entity appointed to accept legal mail on behalf of your nonprofit. If you hired Northwest as your LLC registered agent, we can be the registered agent for your nonprofit as well.
• Incorporator(s). The name and address of at least one person who signs your articles. This doesn’t have to be someone within your nonprofit.
• Members. Whether your nonprofit will have members. (Nonprofit members are people who can vote to elect your board of directors.)
• Dissolution. How assets will be distributed if your nonprofit dissolves. If you plan to apply for tax-exempt status, you must use the IRS suggested language in your dissolution clause.
• Purpose. To qualify for tax-exempt status, use the IRS suggested language when describing your organization’s purpose.
• Effective date. Can be the present date or a date up to 90 days in the future.
• Signature(s) of incorporator(s). Must be original.

2. Get a new EIN.

Even if you already applied for an Employer Identification Number (EIN) for your LLC, you’ll need a new EIN for your nonprofit. You can apply for an EIN directly from the IRS for free, either online or by mail.

3. Hold an organizational meeting and adopt nonprofit bylaws.

By law, Missouri nonprofits are required to adopt bylaws before or at the first organizational meeting. Missouri nonprofit bylaws are the guidelines for how your organization operates, including when and where meetings are held, how voting works, and how directors are elected or removed. If you apply for 501(c)(3) status, you’ll need to submit your bylaws to the IRS.

4. Apply for 501(c)(3) status.

Most charitable nonprofits apply for 501(c)(3) status with the IRS. Nonprofits with 501(c)(3) status are exempt from paying corporate taxes and can qualify for other state tax exemptions. You apply for 501(c)(3) status by submitting IRS Form 1023, which comes with a $600 fee ($275 for Form 1023-EZ).

But it’s not as simple as just filling out a form. Before the IRS approves your application, they’ll want to carefully review your Articles of Incorporation, bylaws, finances, board of directors, and other details to make sure your nonprofit qualifies for tax-exempt status. In order to set yourself up for success, you may want to hire a nonprofit lawyer to review your application.

Check out Northwest’s 501(c)(3) guide.

5. Dissolve your LLC.

If you no longer want your Missouri LLC, you should dissolve it with the state and wind up your affairs. To dissolve an LLC in Missouri, you should first submit a Notice of Winding Up to the Secretary of State’s office, along with a $25 filing fee. This notice informs the state that your dissolution is in process.

Next, you need to wind up your LLC’s affairs. This means settling any LLC debts or obligations and distributing LLC assets to members or creditors. If you want to transfer assets from your LLC to your new nonprofit, it’s a good idea to hire a CPA to make sure you do this correctly and legally.

Once you finish winding up your LLC, you can submit Articles of Termination to the Secretary of State, which will cost you another $25. At that point, your LLC is officially dissolved.

Does Missouri allow nonprofit LLCs?

No. While a few states allow nonprofits to be structured as LLCs, Missouri only allows for nonprofit corporations.