Are you passionate about a cause and want to start a nonprofit in Alabama to make a meaningful impact? Starting a nonprofit can be a fulfilling and rewarding experience, as it allows you to make a lasting difference in your community.
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In this guide, we will provide you with step-by-step instructions on how to establish a nonprofit organization in Alabama, from forming your board, choosing a name, filing the paperwork, to receiving your tax-exempt status.
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Forming Your Board
The first step in starting a successful nonprofit in Alabama is to assemble your board of directors, a group of dedicated individuals who share your passion and commitment to your cause. Board members are responsible for guiding the strategic direction of your nonprofit and ensuring its legal and ethical compliance.
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Under Alabama law, a nonprofit organization must have three or more directors who are over the age of 18. You may want to choose individuals who bring diverse skills, experiences, and perspectives to your board.
Once you have established your board of directors, you should draft your nonprofit bylaws - the document that outlines the rules and procedures governing the organization. Keep in mind that your bylaws must be consistent with Alabama laws, including the Alabama Nonprofit Corporation Act.
Choosing a Name
The next step is to choose a name for your nonprofit, which should be unique and distinguishable from other organizations registered in Alabama. You can conduct a name search on the Alabama Secretary of State website to make sure that your preferred name is available.
Your nonprofit's name should reflect your cause and inspire others. It is best to choose a name that is simple, memorable and easy to pronounce and spell.
Obtaining Your EIN Number
Before you apply for incorporation of your nonprofit, you will need to obtain an Employer Identification Number (EIN) from the Internal Revenue Service (IRS). This number is essential as it will allow you to open a bank account, hire employees, apply for grant funding and more.
To apply for an EIN, you can visit the IRS website and fill out the online application. Once you have received your EIN number, you can apply for incorporation of your nonprofit.
Filing Your Certificate of Incorporation
The next step is to file your nonprofit's Certificate of Incorporation with the Alabama Secretary of State. This certificate includes information about your organization, such as the name, address, mission, and the names and addresses of all your board members.
Before filing, make sure to review Alabama's nonprofit corporation code (Act 848) to make sure that your incorporation document is consistent with state law. You will also be required to pay a filing fee, which varies depending on the type of nonprofit you are creating.
Applying for Your Tax-Exempt Status
Once you have obtained your EIN and filed your Certificate of Incorporation, you can now apply for tax-exempt status with the IRS. To do this, you will need to complete IRS Form 1023 or Form 1023-EZ, depending on your organization's gross receipts and assets.
Be sure to provide detailed information about your nonprofit, including your mission statement, programs and activities, financial projections, and a summary of your board members' qualifications. You may also want to hire a tax professional to review your application before submitting.
Overall, these are the crucial steps you need to take when starting a nonprofit in Alabama:
- Form your board
- Choose a name
- Obtain your EIN number
- File your Certificate of Incorporation
- Apply for tax-exempt status
Starting a nonprofit is not an easy task, but with hard work and dedication, you can create an organization that will make a difference in your community. Good luck on your journey towards making a meaningful impact!
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