How To Start A Nonprofit In Alabama
To start a nonprofit corporation in Alabama, you must file a name reservation request form and an Alabama nonprofit certificate of formation with the Alabama Secretary of State (via your county probate judge). You can submit your name reservation request online or by mail, but you must mail your nonprofit’s certificate of formation to your county probate judge. Once filed with the state, your certificate of formation officially creates your Alabama nonprofit corporation, but truly preparing a nonprofit to pursue its mission involves several additional steps.
Starting an Alabama Nonprofit Guide:
Alabama Nonprofit Filing Options
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Download the Alabama nonprofit certificate of formation. Fill out the form and submit to the state.
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Alabama Nonprofit Name Reservation Requirement
Do I need to reserve a name for my Alabama nonprofit?
When forming an Alabama LLC, you don’t start with the Certificate of Formation. You begin with a name reservation. Alabama is the only state where you have to reserve your LLC’s name first—with foreign and domestic filings. Fortunately, this can be done online. Alabama LLC names must contain the words “Limited Liability Company” or the abbreviation “L.L.C.” or “LLC.” To complete the filing, you must pay a $28 reservation fee. After you’ve reserved your name, print out the reservation. You’ll submit it with your Certificate of Formation.
AL Nonprofit Certificate of Formation Requirements
To incorporate an Alabama nonprofit, you must complete and file the Alabama nonprofit corporation certificate of formation with the Alabama Secretary of State (via your county probate judge). Mail one signed original and two copies to the county probate judge office in the county where you’re forming your nonprofit. Remember to include separate filing fees for the county probate judge ($58 in the county where Northwest’s registered office is located, but the fee might vary from county to county) and the Alabama Secretary of State ($100). See the document below and click on any number to see what information is required in the corresponding section.
You’ll need to reserve a name for your Alabama nonprofit before filing your certificate of formation (this required name reservation is unique to Alabama). You can conduct a preliminary name search and reserve your name at the Alabama Secretary of State’s website for a $28 fee. Your name reservation request will get processed immediately, and you’ll receive a name reservation certificate.
Attach a printed copy of your name reservation certificate to your nonprofit’s certificate of formation.
Alabama does not require nonprofits to have members, but the Certificate of Formation requires you to decide, one way or another, in advance of forming your nonprofit. If you identify your nonprofit as having members, the State of Alabama expects your nonprofit’s bylaws to define the powers of its members and the limitations placed upon them. The form also needs to identify the individual or business preparing your Certificate of Formation (typically the same person or business as your incorporator). When you hire Northwest to form your Alabama nonprofit, we’ll be your preparer.
List the street address for your principal office (a PO Box won’t work) and a mailing address if different. If you hire Northwest, you can list our address here.
List an individual resident of Alabama (yourself or a willing associate), or hire an authorized registered agent service like Northwest.
If the street addresses of your registered agent’s office differs from that of your principal office, list that address here.
The form for your Alabama Certificate of Formation already includes a general statement of purpose, and the state only requires an additional sentence or two to briefly indicate your nonprofit’s purpose. However, if you’re planning to apply to the IRS for federal tax-exempt status, you should attach a lengthier statement of purpose that includes the specialized language recommended by the IRS.
The form includes the statement “Period of duration shall be perpetual unless stated otherwise by an attached exhibit.” If your nonprofit doesn’t have an end date in mind, this section requires no action on your part. If your organization won’t exist perpetually, however, include an attachment stating the end date you have in mind.
Your nonprofit’s incorporator is the individual or business who signs and delivers your Certificate of Formation, and an incorporator does not need to be a director, member, or officer in your nonprofit. If you hire Northwest as your registered agent service, we will be your incorporator.
Your Alabama nonprofit will need at least three directors. List their names, street addresses, and mailing addresses (if different) on your Certificate of Formation, and add an attachment if your nonprofit has more than three.
If you have special provisions you’d like to put on your Alabama nonprofit, so long as those provisions are consistent with Alabama law, check the “additional provisions” box at the end of your Certificate of Formation and attach the previsions you have in mind. Your Alabama nonprofit certificate of formation will need to include the specific provisions and tax-exempt language required by the IRS if it intends to seek 501(c)(3) federal tax-exempt status.
How Much Does It Cost to Incorporate an Alabama Nonprofit?
You will pay approximately $186 in combined fees to incorporate an Alabama nonprofit corporation. This total includes a required $28 fee to reserve your nonprofit’s name online, a $100 fee to file your nonprofit’s certificate of formation with the Alabama Secretary of State, and an additional fee that goes to the office of the judge of probate when you initially file your paperwork (that fee is $58 in the county where Northwest has its registered office, but the fee varies from county to county). You can also pay an optional $100 expedite fee to speed up the application process.
Hire Northwest to incorporate your Alabama nonprofit, and the total cost, which includes a full year of our registered agent service, is $411 for standard processing and $511 for expedited processing.
How Long Does It Take to Start an Alabama Nonprofit?
Alabama can take up to 180 days (six months!) to process your filing if you don’t pay the $100 expedite fee. Pay the $100 expedite fee, and Alabama should process your filing in around five days. Both options are available when you hire Northwest.
Does an Alabama Nonprofit Need a Registered Agent?
Alabama requires the appointment of a registered agent to receive services of process (lawsuits) for your nonprofit. It’s possible to take on this job yourself, but keep in mind that a registered agent has to be available at a publicly listed physical address during normal business hours. If you can’t make that commitment, don’t know of someone else you can trust with the job, or don’t want your personal or office address listed publicly on your Certificate of Formation, it’s best to go with an Alabama registered agent service like Northwest.
Hiring a registered agent comes with numerous benefits. When you hire Northwest, you’ll have the option to list the address of our Alabama registered office on your Certificate of Formation. As a result, you’re less likely to get targeted by data-sellers, you’ll receive less junk mail, and you won’t have to deal with a bunch of unwanted solicitors showing up at your door. Furthermore, managing and growing your Alabama nonprofit means leaving your desk, attending meetings, traveling, and soliciting contributions from potential donors. That’s a difficult job if you’re stuck at your desk all day during business hours.
Hire Northwest, and we’ll make sure someone is always available to accept services of process on your behalf. If your Alabama nonprofit ever receives a legal notice, we’ll scan it and send it to you on the day we receive it.
Get a Federal Employer Identification Number (EIN)
If you’re planning to open a bank account in your nonprofit’s name, get state permits, register as a charity, collect donations, or apply for federal or state tax exemptions, you’re going to need a federal employer identification number (FEIN or EIN).
Once you form your Alabama nonprofit, you can apply for an EIN online at the IRS website or by phone. Or you can save yourself the trouble and add our convenient EIN service for an additional fee when you hire Northwest.
Hold Your Organizational Meeting & Adopt Bylaws
Alabama requires a nonprofit’s board of directors to adopt bylaws at its organizational meeting. This is your first official meeting where your nonprofit endorses its Certificate of Formation, elects officers, approves its bylaws, and otherwise truly completes the process of incorporation. You can hold your organizational before or after Alabama approves your Certificate of Formation, but make sure the meeting happens before you apply to the IRS for 501(c) federal tax-exempt status. The IRS will expect your nonprofit to be fully organized before you submit your Application for Recognition of Exemption.
Why do bylaws matter? Bylaws are all about self-control. Bylaws help a board of directors follow a consistent, agreed-upon path while managing and guiding a nonprofit’s activities. Bylaws say, for example, how long the directors stay in office and which powers and responsibilities belong to which officers. For these reasons and more, your bylaws are your nonprofit’s most essential internal document. Hire Northwest to form your Alabama nonprofit, and your account will include an adaptable template for writing nonprofit bylaws, as well as other free nonprofit forms, to help you get started.
Apply for Federal and/or State Tax Exemptions
If you want to obtain federal tax-exempt status for your nonprofit, you’ll need to file an Application for Recognition of Exemption with the IRS—a lengthy, difficult process that will take more time than any other stage in forming your nonprofit (sometimes up to 6-9 months). Section 501(c) of the Internal Revenue Code describes more than two dozen types of tax-exempt nonprofits recognized by the IRS, but most nonprofits apply for 501(c)(3) status, which describes public charities and private foundations. If your nonprofit intends to become a 501(c)(3) organization, be sure your Articles contain specific language required by the IRS limiting your nonprofit’s activities exclusively to one or more recognized exempt purposes. Learn more at Northwest’s detailed Guide to 501(c)(3) Tax-Exempt Status.
If you manage to obtain federal tax-exempt status from the IRS, Alabama will automatically exempt your nonprofit from paying the state income tax. However, most nonprofits, including charities, still pay sales and use taxes in Alabama. See our Alabama state tax exemptions page for more details.
Apply for Required State Licenses
Does an Alabama nonprofit need a business license?
Most businesses (including nonprofits) need various business licenses to operate in Alabama, but the types of licenses required, as well as the fees, get determined locally through the county licensing commission or county probate office.
Does an Alabama nonprofit need to get a state tax ID?
Your nonprofit will need to get a state tax account number from the Alabama Department of Revenue. To register, access “My Alabama Taxes” (MAT) at the Alabama Department of Revenue’s website. The application is free, but it will take between 3-5 business days to receive your account number. You will need your Alabama tax ID to apply for Alabama state tax exemptions.
Should my Alabama nonprofit register as a charity?
Any organization that collects donations in the State of Alabama must register as a charity with the Alabama Attorney General. There is a $25 registration fee, and Alabama charities renew their registrations each year within 90 days of the end of their fiscal year. The annual renewal fee is also $25.
Open a Bank Account for Your Alabama Nonprofit
To open a bank account for your Alabama nonprofit, you will need to bring the following items with you to the bank:
- A copy of your nonprofit’s certificate of formation
- A copy of your nonprofit’s bylaws
- Your Alabama nonprofit’s EIN
We recommend calling your bank ahead of time to find out what their requirements are. If your nonprofit has several directors and/or officers, for instance, you may need to bring a board resolution authorizing you to open a bank account in your nonprofit’s name.