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How to Start a Nonprofit in Alabama

Last Updated: November 20, 2023 By TRUiC Team

In this guide, you’ll find everything you need to know about how to start a nonprofit in Alabama, including information on how to name your nonprofit organization, file articles of incorporation and how to apply for 501(c)(3) tax exempt status with the Internal Revenue Service (IRS).

Or, simply use a professional formation service: Northwest ($29 + state fee)

Starting a Nonprofit Organization in Alabama Is Easy

To start an Alabama 501(c)(3) nonprofit organization, you'll need to first register a nonprofit corporation with the state of Alabama, and then apply for tax exempt status under section 501(c)(3) with the Internal Revenue Service.

You can learn more about nonprofits and 501(c)(3) in our What is a nonprofit? and What is a 501(c)(3)? guides. To find a nonprofit use our free 501c3 Lookup tool.

Want to form a nonprofit elsewhere? Read our other How to Start a Nonprofit guides. Also check out our best nonprofit formation services review.

Step 1: Name Your Alabama Nonprofit

The name you select for your nonprofit will establish its brand. It is the first thing most people will learn about your organization. It is important to pick a name that both aligns with your mission and follows the rules for naming in your state.

Alabama Nonprofit Naming Guidelines

The name you pick for your organization must:

Be distinguishable from other businesses in Alabama.
Not suggest that the nonprofit corporation was formed for any other purpose than described in the Certificate of Formation

You can read the Alabama Business and Nonprofit Entities Code for the complete rules on naming an Alabama-based organization.

To learn more, read our How to Name an Alabama Nonprofit guide.

Not sure what to name your business? Check out our Business Name Generator.

Is the URL available?

We recommend that you check online to see if your business name is available as a web domain. Even if you don't plan to create a business website today, you may want to buy the URL in order to prevent others from acquiring it.

Now that you have verified your name and secured the URL you may select a professional service to complete the nonprofit formation process for you.

We recommend: Northwest ($29 + state fee)

Step 2: Reserve the Name in Alabama

All nonprofits in Alabama must obtain a Certificate of Name Reservation.

You can file the certificate either online or by mail with the Secretary of State.

The filing fee is $25.

Paper forms can be mailed to the address below:

Office of the Secretary of State
P.O. Box 5616
Montgomery, AL 36103

NOTE: You must reserve your name at least two weeks prior to forming your nonprofit if filing by mail. If filing online, you may reserve your name at the time of formation.

For more information, you can call the Secretary of State at (334) 242-5324 or visit them at their website.

If you're having trouble finding a name for your Alabama nonprofit, read our How to Name a Nonprofit in Alabama guide.

Step 3: Appoint an Alabama Registered Agent

A nonprofit corporation in Alabama is required to have a registered agent with an Alabama address.

What is a Registered Agent? A registered agent is an individual or business entity responsible for receiving important legal documents on behalf of your business. Think of your registered agent as your business' point of contact with the state.

Learn more about registered agents

Need Help?

Northwest provides the first year of registered agent service free with nonprofit formation ($29 + State Fees)

To learn more, read our How To Pick an Alabama Registered Agent guide.

Step 4: Select Your Board Members and Officers

The directors of a nonprofit are responsible for overseeing the operations of the organization. The directors come together to form a board.

The officers of a nonprofit (such as the president or the secretary) are individuals with responsibilities, and the authority to execute based on their job descriptions.

Together, the officers and the board will come together to make up the organizational structure of your nonprofit.

To be eligible for 501(c)(3) status, the organization structure of your Alabama nonprofit corporation MUST include:

At least 3 directors not related to each other
A president
A vice president
A secretary
A treasurer

NOTE: The president and secretary positions cannot be held by the same person.

To learn more, read our guide on How to Select Board Members for Your Alabama Nonprofit

Step 5: Alabama Certificate of Formation

To become a nonprofit corporation in Alabama you must file a Certificate of Formation for domestic nonprofit corporations.

NOTE: If filing by mail, your organization must already have filed a Certificate of Name Reservation at least two weeks in advance.

In order to qualify for 501(c)(3) status, the organization’s purpose must explicitly be limited to one or more of the following:

Charitable
Religious
Scientific
Literary
Testing for public safety
Fostering national/international amateur sports competition
Preventing cruelty to animals/children

You must mail the following to the Alabama Secretary of State:

Original Certificate of Formation
2 additional copies of the Certificate of Formation

The state filing fee is $200.

To learn more, read our Alabama Certificate of Formation guide.

Step 6: Draft Bylaws and Conflict of Interest Policy

There are two documents that will be central to the running of your nonprofit:

Bylaws: These are the rules that determine how your organization will be governed and run.

Conflict of Interest Policy: These are the rules set to ensure that decisions being made for the nonprofit are based on what is best for the organization, and not being motivated by what is best for individuals.

Learn more about how to write bylaws for your nonprofit

Step 7: Conduct an Organizational Meeting

An organizational meeting is the first official meeting of your nonprofit! Some of the things that are discussed in a typical organizational meeting:

Taking attendance to show you have a quorum (minimum number needed)
Appointing temporary officers, chairmen, secretaries, etc.
Adoption of the bylaws
Adoption of conflict of interest policy

Don’t forget to record “minutes” of the meeting and have it signed by all attending directors. Here are some corporate minutes templates to help you get the ball rolling.

Step 8: Get an EIN

An EIN or Employment Identification Number (also called a Federal Tax Identification Number or Federal Employment Identification Number), is used to uniquely identify a business entity. You can think of the EIN as a social security number for your nonprofit.

The EIN is required for your organization whether or not it will have any employees.

To learn more, read our guide on how to get your EIN.

Step 9: Register For A State Tax Account

Nonprofits in Alabama must also register with the Alabama Department of Revenue for applicable state taxes.

This can be accomplished by completing My Alabama Taxes (MAT) registration online.

For more information, you can call the Department of Revenue at (334) 242-1490 or visit them at their website.

Step 10: Applying for Exemption from Federal (501(c)(3) status) and State Taxes

Applying for Exemption from Federal Taxes:

A nonprofit may be eligible for 501(c)(3) status only if its purpose is limited to one or more of the following:

Charitable, Religious, Scientific, Educational, Literary, Fostering national/international amateur sports competition, Preventing cruelty to animals/children, Testing for public safety

Before a nonprofit can apply for 501(c)(3) status it must:

Elect at least 3 directors not related to each other
Register as a nonprofit with the state
Adopt the bylaws and conflict of interest policy
Have an EIN number

Once these four conditions have been met your nonprofit can apply for 501(c)(3) tax-exempt status by filing Form-1023 online.

If your application is approved, the IRS will send you a determination letter stating that your organization is exempt from federal taxes under section 501(c)(3).

To learn more, read our guide on How to File Form 1023-EZ.

Applying for Exemption from State Taxes:

Once you have received your 501(c)(3) determination letter from the IRS, you will automatically be exempt from Alabama state income tax.

Most nonprofits will not be exempt from paying state sales and use tax. If your nonprofit qualifies for an exemption under Alabama Statute 40-9-1, you may fill out Form ST:EX-A1.

The mailing address for this form will depend on the region your county of formation is in.

For more information, you can call the Department of Revenue at (334) 242-1490 or visit them at their website.

Once you have formed your Alabama nonprofit, we recommend you read our guide on How To Protect your Alabama Nonprofit and Keep It Compliant.

Step 11: Open a Nonprofit Bank Account

After you acquire an EIN and a federal tax exemption for your nonprofit, you can open a 501(c)(3) bank account to begin soliciting donations or paying vendors and employees of the organization.

Opening a bank account for your nonprofit is the first step towards creating a paper trail of all income and expenses to show the IRS that your nonprofit is legitimate, honest, and legal.

There are several rules and exceptions that differentiate a 501(c)(3) bank account from a traditional business account. To find the best bank for your organization's financial needs read our review of the best banks for small business.