How To Start A Nonprofit In Hawaii

To incorporate a Hawaii nonprofit, you must complete and file nonprofit articles of incorporation with the Hawaii Department of Commerce and Consumer Affairs. See the document below and click on any number to see what information is required in the corresponding section.

How Much Does It Cost to Incorporate a Hawaii Nonprofit?

Hawaii charges all filers at least $26 in combined fees to file nonprofit Articles of Incorporation, which includes the $25 filing fee and a $1 State Archive fee. Online filing costs an additional $2.50, and you also have the option to pay a $25 expedite fee to speed up the application process.

How Long Does It Take to Start a Hawaii Nonprofit?

Standard processing in Hawaii is approximately 10 business days, but you can speed up the process to around 3 business days if you pay the $25 expedite fee.

Does a Hawaii Nonprofit Need a Registered Agent?

Yes, you’re required to appoint a Hawaii registered agent to receive legal notices for your nonprofit. You can appoint yourself, someone you know, or a registered agent service, but just keep in mind that your registered agent must be available during normal business hours at a Hawaii street address listed on your nonprofit’s articles of incorporation. If you put down your own residential or office address, expect to always have a mailbox full of junk mail, and don’t be surprised to find salespeople showing up at your door.

A better option? Hire Northwest, put our Hawaii address on your articles instead, let us do the waiting, and devote your time to managing and growing your nonprofit on your own terms. Need to hold a lengthy meeting? No problem. If a legal notice arrives, we’ll be there to get it. Need to travel? Again, no problem. If a service of process arrives from the state of Hawaii while you’re gone, we’ll scan it and send it to you on the day we receive it.

A federal employer identification number (FEIN or EIN) is a little like your nonprofit’s social security number, and getting one is a must for any new nonprofit attempting to open bank accounts, set up accounts with vendors, or apply for federal and state tax exemptions. After the Hawaii Secretary of State approves your articles, you can apply an EIN through the IRS website. Or you can add our convenient EIN service for an additional fee when you hire Northwest.

Hawaii expects your nonprofit’s board of directors to adopt bylaws at its organizational meeting. This is your nonprofit’s first official meeting, held after the state files your articles of incorporation, at which your nonprofit appoints its officers, ratifies a conflict of interest policy, and adopts its bylaws (among other organizational business). It’s important to hold this meeting before your nonprofit applies to the IRS for recognition as a 501(c)(3) tax-exempt entity, since the IRS only wants to deal with a fully formed nonprofit.

What are bylaws, and why do they matter? Bylaws are your nonprofit’s internal rules. They govern, for instance, how someone becomes a director, the range and limitations of each officers’ responsibilities, the rights of members, and a host of other questions that need clear answers in advance. If you’re concerned that you don’t have the experience necessary to write effective bylaws, Northwest can help. When you hire Northwest, you’ll gain access to our adaptable template for writing bylaws, as well as numerous other free nonprofit forms to help get you started.

To seek federal tax-exempt status for your nonprofit, submit the Application for Recognition of Exemption to the IRS, pay either $275 or $600 depending on the size and nature of your nonprofit, and prepare to wait 3-6 months or more while the IRS examines your nonprofit’s history, purpose, formation documents, and finances. Currently, the IRS recognizes over two dozen different types of exempt organizations under Section 501(c) of the Internal Revenue Code, but most nonprofits seek 501(c)(3) tax-exempt status for public charities and private foundations. If your nonprofit is a charitable organization, be sure your articles of incorporation include the special tax-exempt provisions using the exact language provided by the IRS.

If your nonprofit manages to obtain 501(c)(3) federal tax-exempt status, your organization won’t have to pay the Hawaii state income tax. However, your nonprofit will need to apply directly to the Hawaii State Tax Commission if you intend to seek a general excise tax exemption and other Hawaii state tax exemptions that may be available to your nonprofit.

Does a Hawaii Nonprofit Need a Business License?

Hawaii doesn’t issue a statewide business license (at least not by that name), but your nonprofit needs to submit a Basic Business Application to the Hawaii Department of Taxation (Form BB-1). This is a consolidated application for those tax accounts, such as the withholding tax and general excise tax (GET), that may be relevant to your nonprofit’s activities. Additionally, some Hawaii cities and counties may require licenses and permits of their own.

Should a Hawaii Nonprofit Register as a Charity?

Most Hawaii nonprofits that solicit charitable contributions need to register as a Hawaii charity with the Attorney General’s Tax and Charities Division. The Attorney General’s website provides an online registration system, and your nonprofit needs to set up an account to register. There is no registration fee, but each year Hawaii nonprofits submit a financial report (also called an annual report) to the Attorney General and pay an annual fee based on the organization’s gross revenue for that year. Here’s how the fees break down:

There are some exceptions, including parent-teachers associations, some religious corporations, nonprofit hospitals, and charitable organizations that consistently receive less than $25,000 in annual contributions, but most nonprofits should expect to register, file an annual financial report with the Attorney General, and pay an annual fee each year.

To open a bank account for your Hawaii nonprofit, you will need to bring the following items with you to the bank:

• A copy of your Hawaii nonprofit articles of incorporation
• A copy of your nonprofit’s bylaws
• Your Hawaii nonprofit’s EIN

It’s wise to call your ahead of time to check its requirements. Some banks may require you to bring a resolution authorizing you to open a bank account in your nonprofit’s name (particularly if your nonprofit has several directors and/or officers).

Hawaii requires nonprofit corporations to file a yearly report updating their information on the state’s records (corporate name, registered agent information, directors, etc.). You can file online for $3.50, by mail for $6.00, or in person at the Hawaii Secretary of State’s office for $6.00. You also have the option to add $25 for expedited processing (around 1-3 business days).

If you’d rather not bother keeping up with these deadlines, filing options, and fees, sign up for our Hawaii Annual Report Service when you hire Northwest, and we’ll file for you for an additional fee.