How Much Does It Cost to Start a Nonprofit Organization in Alabama? Starting a Nonprofit in Alabama

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Overview

To start a nonprofit in Alabama, you must choose a name, incorporate it with the state, file paperwork with the Secretary of State, and obtain 501(c)(3) tax-exempt status from the IRS. The process involves choosing three directors, filing a name reservation form, and completing the necessary Articles of Incorporation and bylaws.

Costs and Timeline

Costs:

  • The cost to start a nonprofit in Alabama can range from $100 to $1,000. This includes a name reservation fee of $28; incorporation fee of $100 at the state level plus a $50 county filing fee.

Timeline:

  • Incorporation takes approximately two to three weeks.
  • The complete process from start to finish can take two to six months.

Steps to Form a Nonprofit Corporation

  1. Choose Directors:
    • In Alabama, you must have three or more directors on your board.
  2. Name Reservation:
    • File a name reservation form to secure your chosen organization name.
  3. Filing Incorporation Documents:
    • Submit Articles of Incorporation and bylaws to the state.
  4. Tax-Exempt Status:
    • Apply for federal tax-exempt status using IRS Form 1023.

Nonprofits in Alabama are also required to comply with charitable solicitation registration.

Additional Information

  • One person cannot own a nonprofit organization.
  • While the annual nonprofit report is not required in Alabama, it can be helpful to show donors your organization’s progress.
  • Nonprofit organizations in Alabama, once approved, are entitled to exemption from federal income tax under section 501(c)(3).
  • There are over 18,000 nonprofit organizations in Alabama that significantly contribute to the state’s economy.
  • Establishing a nonprofit corporation adds legitimacy to your business and provides liability protection.

For assistance throughout the formation of your Alabama nonprofit corporation, seeking professional guidance is recommended.

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