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Our Step By Step Guide

How to form a nonprofit corporation in Alabama

Forming a nonprofit corporation provides liability protection for any type of business, and should be among the first steps you take as a new business owner. Starting a nonprofit corporation can help you protect your personal assets while adding legitimacy to your company. Follow our step by step guide or let us handle the paperwork on your behalf, ensuring your business is filed quickly and accurately.

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Why start your business in Alabama?

Did you know that there are more than 18,000 nonprofit organizations in Alabama? The economic impact of Alabama's nonprofit sector can be felt throughout the state. More than 80,000 people are employed in these organizations, over 5% of the state's workforce. Collectively, more than $13.5 billion is generated in annual revenue by Alabama nonprofits.

Starting a nonprofit corporation in Alabama allows entrepreneurs to deliver vital services to their communities and give a voice to the people they serve. Here's what you need to know about starting a Alabama nonprofit corporation.

Helpful Alabama Resources

Secretary Of State Details

Alabama Secretary of State
P.O. Box 5616
Montgomery, Alabama 36103-5616

Phone:334-242-7200
Website: sos.alabama.gov

Two Ways to Register Your Business

MyCorporation® can help you file all of the necessary documents to form your nonprofit corporation in Alabama.

File and submit the formation paperwork yourself

Our free guide provides you with all of the information you'll need to form your nonprofit corporation in Alabama. Bookmark this page as a reference so you can return easily as you complete each step of the process.

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Are you looking for another entity type? We offer several other guides for the state of Alabama.

Now that you have decided to start a nonprofit in Alabama, you need to determine the charitable mission and purpose for the business. In order to comply with IRS regulations, it's important that your business is organized for an exempt purpose. Your business may not engage in political activities and must not overcompensate its members.

The next step is to decide on a name for your business. For nonprofits, it's important that you choose a name that clearly represents the mission of your organization. Be sure that the name you choose is easy to pronounce and memorable. Once you've decided on a name for your business, you should conduct a quick trademark search. This can help you find out if the name you want has already been taken and reduce the possibility of rejection. It's also best come up with one or two alternatives, in case the name you want to register is not available.

There are a few rules that Alabama nonprofits must follow in order to register a name. First, the name you choose must be not "deceptively similar" to the name of any other business located in the state of Alabama. This is to prevent fraud, misrepresentation or confusion. There are cases where substantially similar names that imply an affiliation or relationship would be exempt. For example, First Baptist Church of Sacramento and First Baptist Church of San Francisco would not present a conflict to one another. Neither would Veterans of Foreign Wars Montebello Post 2317 and Veterans of Foreign Wars Inc. Post No. 2627.

You can find out whether a name is available for registration by searching the Alabama Secretary of State business entity search tool. Check variations or alternate spellings that could also conflict with your name and cause your application to be rejected. MyCorporation's business name search serviceservice is also available to conduct a more thorough search for trademarks.

Once you have chosen your name, you can reserve it for 60 days by filing a name reservation request with the Alabama Secretary of State if you are not ready to file right away. MyCorporation can also complete a busines name reservation on your behalf.

Tip: A business name check is included with every one of our business formation packages. We check with the state to determine the availability of your business name automatically. You can also conduct a nationwide business name search here.

The state of Alabama requires you to designate a registered agent for your business when you complete your Articles of Incorporation. A registered agent (often abbreviated as RA) is responsible for receiving legal and official documents on behalf of your business. An RA acts as the state's means to communicate with your business. This may be an individual or corporation that agrees to accept legal papers on the nonprofit's behalf.

A registered agent can be any individual who resides in Alabama. A third-party registered agent service, like MyCorporation, may also be utilized for the business. An RA must have a physical street address in Alabama as a P.O. Box address is not allowed. A nonprofit corporation may not serve as its own registered agent.

Why designate a third party to act as my registered agent?

Registered agent information is publicly available. This may cause privacy concerns for business owners who do not wish to list their personal contact information for everyone to see. It is also common for the registered agent to become a target of spam or robocalls since this private information is relatively easy to obtain.

Registered agents are highly valued for their discretion. For example, if you did not have a registered agent and your business was served with lawsuit paperwork the documents would be delivered directly to your business address. This could be incredibly embarrassing for the business owner, especially if this happened in front of customers. An RA will accept the documents privately to ensure additional privacy, organize the materials, and then deliver them to the business owner.

This is why many business owners opt for a third-party registered agent service like MyCorporation to act as a registered agent on behalf of their business.

Tip: Our Deluxe and Premium formation packages include a full year of registered agent services for your business. We also offer standalone registered agent services which you can add to your business later.

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MyCorporation® takes the guess work out of starting your business. Answer a few simple questions, and our filing experts will take care of the rest.

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The state of Alabama requires you to file Articles of Incorporation in order to legally create a nonprofit. The Articles of Incorporation is a simple one-page form that contains all the basic information required to register your business, including the following:

  1. Name of the corporation
  2. Alabama nonprofit corporation has members or does not have members (check off box)
  3. Street address of the corporation's principal address and mailing address
  4. Name of the registered agent and mailing address in Alabama
  5. Purpose for which corporation is formed
  6. Name(s) of the incorporator(s) and street address and mailing address
  7. Number of directors constituting the initial Board of Directors
  8. Director's name, street address, and mailing address
  9. Any other provisions (attached)
  10. Signature, typed name of above signature, typed title, and date

A filing fee of $200 must be made payable through check or money order to the Secretary of State. Expedited service is available for $200 and processed within three days after date of receipt from the County Probate Office.

Bylaws are the detailed set of rules agreed upon and adopted by the board of directors of the nonprofit. Think of these as an instruction manual to run the business. They include rules and procedures related to meetings you will hold, and notes on the ways you will elect officers and directors of the business.

While a nonprofit corporation is not legally required to create bylaws in Alabama, it is highly recommended. Bylaws help maintain consistency in the way your business operates, as well as communicate organizational rules that help avoid conflicts and disputes. Bylaws are for your records only and are not submitted to the state.

If you are not sure how to create corporate bylaws, you can purchase MyCorporation's customized Minutes and Bylaws package. Inside our package you will find internal documents required to fulfill your corporate formalities and properly operate your business after it has been incorporated.

The first board meeting for your business is often referred to as the organizational meeting of the board. During this meeting, the initial directors of the business will adopt the corporate bylaws, set the fiscal year, and appoint corporate officers.

This meeting and all future meetings of the board of directors must be recorded in corporate minutes. Minutes are documents that detail what was discussed and any decisions the business makes during meetings. They are kept with the corporate records.

Corporate minutes are required for all Alabama nonprofit corporations by law. Falling behind on this critical task can cause your business to fall out of good standing, and even jeopardize its tax-exempt status. It is important to maintain a corporate minute book. Inside you may keep originals or copies of all the signed and approved minutes or Actions by Unanimous Consent from any special or annual meetings of the corporation's shareholders and directors.

An EIN (also referred to as a Federal Tax ID) is a nine-digit number that is issued by the IRS and used to uniquely identify your business for tax purposes. Think of it as a Social Security Number (SSN) for your business, except an EIN is less sensitive. Like an SSN, an EIN allows you to:

  • Open business checking, savings, or investment accounts
  • File taxes for the business
  • Complete payroll for employees if applicable
  • Obtain lines of credit and credit cards, and build credit for your business
  • Apply for applicable business licenses when required
  • File for tax exempt status

You will only need a few pieces of information to file, including your mailing address and legal business name. You can apply online Opens in a new window with the IRS by downloading IRS Form SS-4 (PDF)(116 KB), or work alongside a third party organization like MyCorporation to complete an EIN application.

Tip: If a Alabama nonprofit corporation pays more than $100 in wages to employees each calendar quarter, you'll need to obtain a State Employer Identification Number, or SEIN. In order to do this, you will need to register with the Alabama Employment Development Department (EDD).

Your nonprofit corporation is not automatically tax exempt. In order to become tax exempt, you will need to take certain steps to obtain this status. First, you will need to file for exempt status with the Internal Revenue Service using either Form 1023 (PDF)(866 KB) Opens in a new tab or Form 1024 (PDF)(360 KB) Opens in a new tab, depending on the classification of your organization.

In some cases, you may be eligible to file Form 1023-EZ Opens in a new window, a streamlined version of the application for recognition of tax exemption. You can avoid a $25 fee if you file for federal tax exemption before filing with the state.

You can learn more about the process directly from Publication 557 from the IRS (PDF)(2.1 MB).

It is advised that your nonprofit corporation checks in with the Alabama Secretary of State for this section. The state will further detail if your nonprofit corporation needs a solicitation permit and the charitable solicitation laws set throughout the United States.

All businesses are required to file for a general business license (sometimes referred to as a business tax certificate) in the state of Alabama. If you plan on operating your nonprofit in multiple cities, you will need to apply for a business license in each location. Additional permits may be required along with a general business license and are to be filed with the county or state.

You can find out about the specific licenses applicable to your business by checking with the city offices where you will conduct business, or by using MyCorporation's business license compliance package. Our team of skilled professionals will identify the licenses required by your nonprofit and provide you with all the information you need to file.

nonprofit corporation Formation Packages

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BASICS
$99
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$124
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  • Annual Report service
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$224
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Frequently asked questions

Currently, according to the Alabama Secretary of State, nonprofit corporation processing times usually take up to 3-5 business days for standard filings. Expedited service is processed within three days after date of receipt from the County Probate Office.

In order to keep your nonprofit in good standing, there are reoccurring requirements that must be met.

  • All Alabama nonprofits must file a Statement of Information with the Secretary of State every two years.
  • All Alabama nonprofits must hold an annual meeting of the directors logged in their corporate minutes.
  • All nonprofits (except schools, hospitals, and religious organizations) need to file the annual registration renewal fee report. The fee for the report may vary, so check in with the Alabama Secretary of State for further guidelines.

In order to form a corporation in Alabama, you will be required to pay various fees and taxes. The breakdown of the required fees is as follows:

  • Articles of Incorporation - Nonprofit filing fee $200
  • Annual Report Fee - $100

In total, expect to set aside $340 to set up a nonprofit yourself in Alabama.

According to the Alabama Secretary of State, foreign entities that wish to transact business in Alabama must complete a foreign corporation registration application.

The filing fee for corporations is $200 with checks and money orders made to the Secretary of State, Business Services, P.O. Box 5616, Montgomery, Alabama 36103-5616. This registration must be accompanied by a certificate of compliance from the domestic state of formation

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