Your first order of business when created a Non-Profit is to select a name. You must choose a name that must be distinctly your own, it must not be similar to any existing business.
Once you decide on the perfect name for your Non-Profit, you can file a name reservation request to the Secretary of State of Alabama ahead of Certificate of Formation. You can run the business name through the business name search database to check if it is still available as well.
To incorporate in the state of Alabama, you need to elect your initial board of directors. You can’t file an Article of Formation unless you have at least three initial directors.
The next step to registering an Alabama Non-Profit organization is to file a Certification of Formation to the Secretary of State. This form requires the following information for you to be able to process your Non-Profit organization:
You can download the Certification of Formation form, fill it out, and you can file it using the information contained in the said form. Since this form does not include provisions for your Corporation to be a Non-Profit, include the following language in the Certificate of Formation:
Before you file your Certificate of Formation, draft your Corporation bylaws. These bylaws are your regulations and provisions as to the internal operations of your business. Although bylaws don’t have to be filed to the state, it’s highly recommended that you create them.
Useful Resource: If you need help creating custom Corporate bylaws, here is a helpful resource to outline everything.
Your first meeting with the initial directors will be the organizational meeting. During this time, your meeting agenda will cover the following:
Make sure all the initial directors have signed the minutes. If you need help creating minutes for your meeting and other documents required for compliance, here is a useful resource.
As you process your Alabama Non-Profit registration, you will notice that the documents add up. All the necessary Corporate documents will need to be stored in a Corporate Records Binder.
Get a Corporate Records Binder with everything you will need for your organization by ordering one online.
The Employer Identification Number is your business’ unique indicator.
It is important in that it is used by the IRS and the state for tax and report uses. This EIN is similar to your personal Social Security Number as an individual. An Alabama Non-Profit EIN can be easily obtained through the IRS website for free.
The next step to starting a Non-Profit in Alabama is to open a separate business bank account. This is important because you will be able to keep all assets separate in the eyes of the law.
There are many options available from Bank of America to Chase. For a quick outline of the best place to open a business bank account, see this quick review.
Next you have to comply for your Non-Profit tax registration by requesting federal and state tax exemptions. You have to file a federal tax exemption first, then you can proceed to your state tax exemption application.
To file for your federal tax exemption, you need to download the IRS FORM 1023 or the Application for the Recognition of Exemption under Section 501(c)(3) of the Internal Revenue Code form. This is a lengthy form that must be completed in it’s entirety.
A less lengthy form may be used for smaller organizations, Form 1023-EZ or the Streamlined Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code. You have to meet the criteria of under $50,000 for yearly gross receipts plus below $200,000 in gross assets to qualify for form 1023-EZ.
The next step in this process is to visit the website of the Department of Revenue of Alabama to see what tax exemptions you qualify for. As soon as you receive your Section 501(c)(3), you are automatically exempted for income tax in Alabama.
As with the case in every Non-Profit organization, contact the Office of the Attorney General and review their polices for fundraising activities and registration requirements.
Besides taxes, it is important to get your Alabama business licenses. You cannot operate your organization legally without these business licenses.
Recommended Resource: If you would like for professionals to find all business licenses and regulations on your behalf, here is a great package. Otherwise, look into this resource roundup offered by the SBA.
Now that you have followed the steps above, you are an official Non-Profit organization in the state of Alabama. Other than those 10 steps that are based on state guidelines, here are 2 additional steps based on best practice for starting a successful organization. These are not required, but are highly recommended.
The first step when planning your successful organization is to write a solid business plan.
While a business plan is not required to be complaint with the state, it is required by those who are serious about starting their own business. Review the helpful resources listed below to plan for success.
If you want your Non-Profit to be taken seriously, build a professional website. WordPress is the platform for the non-tech savvy entrepreneurs.
WordPress is easier to build and install when compared with other content management platforms. It is best partnered with Bluehost, a reliable web hosting service that has 1-click to install options for WordPress and 24/7 online customer service.
See how to start a website through this step-by-step guide.
Please note that this guide is not legal instruction or assume that it is. You should to talk to your lawyer in detailed matters of starting a Non-Profit organization in Alabama (or starting a new business) as this guide is only for informational purposes. To have professionals take care of all the legal paperwork, check out one of these incorporation services.