| Exemption Eligible Organizations: |
|
| Law: | |
| Notes: |
If you believe you are exempt, submit a letter requesting exemption, a copy of the organization's founding document(s), and IRS determination letter for review. Exemptions are reviewed on a case-by-case basis. |
How to Start a Nonprofit in Alabama
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How to Start a Nonprofit in California
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Alabama Nonprofit Formation Guide
The steps to form a 501(c)(3) nonprofit corporation in Alabama. Start a nonprofit in the state of Alabama, get 501(c)(3) tax-exempt status, be eligible for grants, and much more.
When you're ready to add your nonprofit, here's the game plan – incorporate and aim for that golden 501(c)(3) status. These steps are crucial for reaching your goals. As a 501(c)(3) nonprofit, you'll unlock doors to grants and donations, dodge federal corporate income tax, and shield your officers and directors from excessive liability. You'll gain that all-important credibility, earning the public's trust for your cause.
This guide is your roadmap for launching your nonprofit in the heart of Alabama. Ready to take the first step? Let's do this!
How to Start a Nonprofit in California
Welcome to our California Nonprofit Startup Guide! If you’re passionate about helping others and have an idea to serve your community, starting a nonprofit is a great way to turn your vision into a reality. There are many different types of nonprofits - religious, educational, human service oriented, animal welfare, and more. What all nonprofits have in common is a focus on helping others and benefiting their community. You are genuinely committed to these goals so you are already well on your way!
According to the National Center for Charitable Statistics, there were over 191,000 nonprofit organizations in California in 2012. Before you start a new nonprofit, make sure you have identified an unmet need in your community and know that there are not any existing organizations serving your cause. If another organization exists, consider working together, as that may be a better way to make an impact in your community and use existing resources.
When you are ready to start your nonprofit, plan to incorporate and apply for 501(c)(3) status, as these are important steps to fully achieve your goals. As a 501(c)(3) nonprofit, you will be able to apply for grants and accept donations, be exempt from federal corporate income tax, and limit the liability of your organization’s officers and directors. Most importantly, you will gain credibility and legitimacy for your cause, instilling the public with confidence in your organization.
This guide will walk you through the basic steps to start your nonprofit in California. Let’s get started!
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Liftoff's Board Portal is part of your subscription, along with our website and marketing platform, as well as board training education.
Step 1
Name Your Organization
Your organization’s name establishes its brand and is also important for incorporating with the state. The legal name of your nonprofit corporation may not conflict with any other organization registered in the state. Make sure the name is available and meets state requirements.
| Name Search: | California Secretary of State - Business Programs Division Name search |
|---|---|
| Suffix: | Not required. CCC §5122.a |
Step 2
Choose a California nonprofit corporation structure
California offers four corporate structures for nonprofit corporations.
Religious corporations are primarily or exclusively for religious purposes such as a church.
Public benefit corporations are those seeking IRS exemptions 501(c)(3) or 501(c)(4) and/or similar California state tax exemptions. These organizations are organized for charitable purposes, act as a civic league, or as a social welfare organization.
Mutual benefit corporations are other nonprofits that may or may not seek IRS and California tax exemptions. A mutual benefit corporation may not create the impression that the corporate purpose is public, charitable, or religious, nor create the impression that it is a charitable foundation.
Mutual benefit common interest development (CID) corporations are formed under the Davis-Stirling Common Interest Development Act to manage a common interest development (for example, a homeowner’s association). Common interest development associations can also be unincorporated.
Step 3
Recruit Incorporators and Initial Directors
The incorporator is the person who signs the Articles of Incorporation for your nonprofit. You will need at least one, but can have more than one. Directors make up the governing body of your nonprofit corporation and are stakeholders in your organization’s purpose and success. You’ll want to identify three, unrelated individuals to meet IRS requirements. You will also want to be aware of any age or residency requirements.
| California director requirements: |
|
|---|---|
| California officer requirements: |
|
Fast Facts
Below is an overview of the paperwork, cost, and time to start an California nonprofit.
Paperwork
Articles of Incorporation, either:
Form ARTS-MU - Mutual Benefit Corp
Form ARTS-PB - Public Benefit Corp
Form ARTS-RE - Religious Corp
Form ARTS-CID - CID Corp
Form SI-100: Statement of Information
Bylaws
IRS Form SS-4: Obtain an EIN
IRS Form 1023: 501(c) Tax Exempt Application
IRS Determination Letter
Form FTB-3500: Exemption Application or Form FTB-3500a: Submission of Exemption Request
URS Charitable Registration, if applicable
Cost
Incorporation: $30 by mail or $45 in-person + optional $250-$500 preclearance service + optional $350-$500 expedited filing service
Statement of information: $20
California FTB exemption: $25 ($0 for exemption request)
California charitable registration: $25
Time
Incorporation:Current state processing times or pay for preclearance and expedite services
Statement of information: ~1 business day
501(c): 2 weeks to 3 months
Step 4
Appoint a Registered Agent
A registered agent is responsible for receiving legal notices on behalf of your organization. The appointed registered agent must be physically located in the state and maintain an office that is open during regular business hours. As a nationwide registered agent, our service is designed to receive your legal documents and provide secure access to those documents through your online account. Our local California registered agent office is located in Sacramento, CA. We offer registered agent service independently or as part of our nonprofit formation packages.
Step 5
Prepare and File Articles of Incorporation
Your nonprofit’s articles of incorporation officially mark the creation of your organization. They document where and when the organization was formed and capture other information necessary to verify its existence. While requirements for language vary from state-to-state, there are some basic provisions that the IRS will look for when you apply for 501(c)(3) exemption. It is important to customize the articles for your organization and make sure you meet the state and IRS requirements. Meeting these requirements from the start will help avoid having to make amendments later or risk getting your 501(c)(3) application rejected. Some states will also require you to publish your articles of incorporation, so be mindful of any deadlines and publishing instructions.
| Agency: | California Secretary of State - Business Programs Division |
|---|---|
| Form: | The state provides Articles of Incorporation for a Domestic Nonprofit Corporation templates. There are four templates available:
|
| Filing Method: | Mail or online. |
| Agency Fee: | $30 |
| Turnaround: | Current state processing times or pay for preclearance and expedite services |
| Law: | California Corporations Code - Title 1: Corporations - Division 2: Nonprofit Corporation Law |
| Original Ink: | Not required |
| Notarize: | Not required |
Step 6
File Initial Report
After filing articles of incorporation, you must file an initial report.
| Agency: | California Secretary of State - Business Programs Division |
|---|---|
| Form: | SI-100 |
| Filing Method: | Mail, in-person, or online. |
| Agency Fee: | $20 |
| Turnaround: | Online version is filed in 1 business day. |
| Due: | You must file an initial report within 90 days of incorporation. |
| Penalties: |
|
Step 7
Obtain an Employer Identification Number (EIN)
This unique, nine-digit number is assigned by the IRS to identify your nonprofit. All types of nonprofits will apply for an EIN, not only those that hire employees. You will use your EIN to open a bank account, apply for 501(c)(3) status, and submit 990 returns to the IRS.
| Agency: | Internal Revenue Service (IRS) |
|---|---|
| Form: | IRS Form SS-4 |
| Instructions: | Applying for an EIN without a SSN/TIN:
|
| Filing Method: | Mail, phone, fax, or online. |
| IRS fee: | $0 |
| Turnaround: | The IRS website is only available during certain hours. Print your EIN before closing your session. For additional guidance, seeIRS Pub 1635: Understanding Your EIN. |
Step 8
Store Nonprofit Records
As you launch your nonprofit, you will receive a number of official documents. Organizing these documents in one place will save you headaches down the road. You will soon have numerous items to keep in your records including your EIN letter, bylaws, meeting minutes, 501(c)(3) determination letter, and more.
A great way to maintain necessary documentation is Records Manager, our software for storing records securely, tracking directors and officers, and getting notified of meetings.
Step 9
Establish Initial Governing Documents and Policies
Your bylaws are the governing document for your nonprofit. They serve as your organization’s operating manual and should be consistent with your articles of incorporation and the law. When your Board of Directors meets for the first time, you’ll review and ratify the bylaws and they will be a roadmap for governance from there.
At the same time, you’ll also want to create and adopt a conflict of interest policy. A conflict of interest is when someone in a key position in your nonprofit has competing interests and is making choices that could benefit themselves to the harm of the organization. Personal interests should be set aside and organizational interests prioritized. If a conflict of interest does arise, it should be disclosed immediately.
Your application to the IRS for 501(c)(3) exemption will require that both the bylaws and the conflict of interest policy are approved and adopted. Once they’ve been adopted, safely store them in your Nonprofit Records Kit.
Step 10
Hold Organizational Meeting of the Board of Directors
The initial organizational meeting of your Board of Directors will be incredibly productive. At this meeting you will approve the bylaws, adopt the conflict of interest policy, elect directors, appoint officers, and approve resolutions such as opening the organization’s bank account. Important decisions are being made so be sure to record them in the meeting minutes.
| Submit to: | Arkansas Department of Finance and Administration http://www.dfa.arkansas.gov/ |
|---|---|
| Form: | Form AR-1R: Combined Business Tax Registration Form |
| Instructions: | Instructions for Form AR-1R |
| Filing Method: | Mail or in-person |
| Fee: | $0. $50 if filing for a Gross Receipt (Sales Tax) Permit. |
| Notes: | Apply at least 2 weeks before the taxable activity begins. Do not submit more than 60 days prior to opening date. |
Step 11
Get California State Tax Identification Numbers/Accounts
You will need to apply for a California Employer Identification Number if you will have employees..
| Submit to: | State of California - Employment Development Department http://www.edd.ca.go |
|---|---|
| Filing method: | |
| Fee: | $0 |
To apply for a seller's permit (if your nonprofit collects sales tax on items sold), use tax account, and other permits and licenses:
| Submit to: | California State Board of Equalization http://www.boe.ca.gov |
|---|---|
| Filing method: | |
| Fee: | $0 |
Until your organization applies for and obtains California tax-exempt status, it is subject to franchise and income taxes. This includes $800 minimum franchise tax. You do not need to register with the Franchise Tax Board, but you may need to pay tax until you receive your exemption.
| Guidance: | Introduction to Tax-Exempt Status |
|---|---|
| More Information: | State of California - Franchise Tax Boardhttps://www.ftb.ca.gov |
Step 12
Apply for 501(c)
Applying for 501(c) tax exemption can feel like the most daunting step in bringing your nonprofit dream into reality, but obtaining tax exemption comes with many benefits. You will be able to apply for grants and grow your fundraising success in addition to being exempt from IRS income tax. 501(c) is the chapter of the Internal Revenue Code that regulates nonprofit organizations. Like others, you may be most familiar with 501(c)(3) nonprofits, including charities and foundations. 501(c)(3) nonprofits apply using Form 1023 or Form 1023-EZ. Review the criteria for each application and make sure you meet the eligibility requirements set out by the IRS. Other types of nonprofits, including 501(c)(4)s and 501(c)(6)s, apply using Form 1024. After reviewing and approving your application, the IRS will return a Determination Letter officially recognizing your exemption.
Completing the federal application for tax exemption is significantly easier with the assistance and support of a professional. Find someone with the expertise to ensure the correct application is being used and is completed accurately. A well-prepared application takes time, over 100 hours by IRS estimates, so put yourself on the path to success by finding a specialist to walk alongside you in the journey - from start to tax-exempt finish!
| Agency: | Internal Revenue Service (IRS) |
|---|---|
| Form: | IRS Form 1023, IRS Form 1023-EZ, or IRS Form 1024 |
| Instructions: | IRS Instructions for Form 1023, IRS Instructions for Form 1023-EZ, or IRS Instructions for Form 1024 Also see guidance IRS Pub 557: Tax-Exempt Status for Your Organization. |
| Filing Method: | |
| Agency Fee: | $275 for organizations filing Form 1023-EZ and $600 for organizations filing Form 1023. |
| Turnaround: | 1023-EZ average: <1 month. 1023 average: 3-6 months. |
Step 13
Report Beneficial Ownership Information to FinCEN
As of January 1, 2024, millions of entities in the US need to report beneficial ownership information (BOI) to the Financial Crimes Enforcement Network (FinCEN) as part of the Corporate Transparency Act (CTA). Nonprofits without 501(c) tax exemption formed before that date must submit BOI by December 31, 2024, while those formed after must submit it within 30 days of formation. Once 501(c) tax exemption is granted, the organization may claim an exemption from BOI reporting requirements via an update filing to FinCEN. Our BOI Reporting Service includes up to four initial, updated, and corrected reports per year, ensuring the data you report to FinCEN is updated.
Step 14
Apply for State Tax Exemption(s)
With your IRS Determination Letter in hand, make sure you familiarize yourself with your state’s requirements for recognizing your nonprofit’s tax-exempt status. This is an area where requirements vary state-by-state. Many states issue their own tax-exempt certificate that can be used for sales and use tax purposes, but it may require application and periodic renewal.
To file to obtain exemption from state income tax:
| Agency: | California Franchise Tax Board |
|---|---|
| Form: | Form 3500: Exemption Application or Form 3500A: Submission of Exemption Request |
| Agency Fee: | $25 ($0 for exemption request) |
| Notes: | Use form FTB-3500a if you have received an IRS Determination Letter and form FTB-3500 if you have not. |
To file to obtain Sales Tax Exemption:
| Agency: | California Department of Tax and Fee Administration |
|---|---|
| Notes: | Few nonprofits are eligible for sales tax exemption in California. Volunteer fire departments, veteran's organizations, qualifying youth organizations, religious organizations, and few others may be eligible for exemption. See theSales and Use Taxes: Exemptions and Exclusions guide to see if your organization is eligible to apply for an exemption. |
Exemption from local property taxation, known as the Welfare Exemption, is available to qualifying organizations through a program jointly administered by the Board of Equalization and county assessors' offices in California.
| Guidance: | California Tax Service Center - Nonprofit/Exempt Organizations |
|---|---|
| More information: | California State Board of Equalization |
Step 15
Register for Charitable Solicitation (Fundraising)
This is another area where laws differ from state to state, but most states require any nonprofit soliciting donations to register to do so on an annual basis. This means registering in the state prior to soliciting any resident of that state. Registering in your home state is essential, but you may also need to register other states depending on the scope of your organization.
California Charitable Solicitation Registration
| Agency: | California Attorney General - Registry of Charities and Fundraisers |
| Law: |
California Government Code § 12585; California Code of Regulations, Title 11 § 300 |
| Foreign Qualification is Prerequisite: | Yes |
| Exam Required? | Not Set |
| Registered Agent (Special Agency) Required? | No |
One-Time Exemption Registration
More DetailsInitial Registration
More Details| Form: | |
| Instructions: | |
| Filing Method: |
|
| Agency Fee: |
$50 |
| Turnaround: | 2-3 months |
| Notes: |
|
| Before you Apply: | Domestic Applicants:
Foreign Applicants:
|
| How to Apply:: | Domestic Applicants:
Foreign Applicants:
|
| Before you Apply: | Domestic Applicants:
Foreign Applicants:
|
| Required Attachments: |
|
Registration Renewal
More Details| Form: |
Form RRF-1: Annual Registration Renewal ReportOrganizations that are not required to file and do not file IRS Form 990 or 990-EZ because they do not meet the revenue requirements must also file Form CT-TR-1: Annual Treasurer's Report. |
| Filing Method: |
Mail or Online |
| Agency Fee: |
The renewal fee is based on the registrant's total revenue for the prior fiscal year:
|
| Due: |
|
| Due Date Extension: |
Due dates can be extended for 6 months beyond the original due date by attaching a copy of IRS form 8868 and an IRS-approved extension request when submitting your 990 and renewal form RRF-1. |
| Penalties: |
Failure to submit renewal on time can result in loss of tax exemption and assessment of minimum tax of $800, plus interest, and/or fines or filing penalties. The Attorney General will notify the California Franchise Tax Board to disallow your state tax exemption. Directors, trustees, officers, and return preparers are personally liable for these fees and penalties - you cannot use charitable assets to pay them, they must be paid out of pocket! |
| Notes: |
|
| Required Attachments: |
|
Change of Fiscal Year
More Details| Form: | |
| Agency Fee: |
Varies |
| Notes: |
File a Form RRF-1 for the partial-year (along with all required attachments). The renewal fee will be required based on the total revenue for the reporting period. |
Cancelation
More Details| Form: | |
| Filing Method: |
Mail or Online |
| Agency Fee: |
$0-$300 depending on gross annual revenue. |
| Notes: |
To close out your registration, file a final report with the required fee along with a letter explaining that you would like to cancel your registration. Domestic organizations must also submit proof of dissolution with Secretary of State and distribution of assets. |
To fundraise nationally or online, please see our Fundraising Compliance Guide. Our services manage your initial, renewal, and exemption filings in every state.
Step 16
Obtain Other Business Licenses & Permits
Running your nonprofit corporation legally also means securing all applicable licenses and permits. The range of local, state, and federal requirements is wide. Access resources like the Small Business Administration Business License & Permit look-up tool and search by your business type and locality.
In California:
Bingo is subject to state and local oversight. Apply for a bingo license in your city and/or county. The California Registry of Charitable Trusts ensures that the funds go towards charitable purposes.
Raffles require an additional filing and fee when filing your annual registration form with the Attorney General's Registry of Charitable Trusts.
Frequently Asked Questions
I already have a California nonprofit corporation. Can you help me get 501(c)(3) status?
Some of our clients incorporate on their own and seek our professional assistance with the next steps. In such cases, we review the existing documentation and make any necessary changes. We’re happy to help at any point. Keep in mind, the earlier you enlist our expertise, the more time you’ll save and the greater success you'll experience in the end!
Can I convert my existing for-profit entity to a 501(c)(3) nonprofit corporation?
If you have an existing for-profit entity and are looking to transition to a nonprofit, we are very familiar with this situation and can help! Simply sign up for our professional formation services, and your specialist will review your existing entity and assist with the appropriate next steps.
Am I required to use an attorney to set up my 501(c)(3)?
You are not required to use an attorney. You can set up your nonprofit yourself but doing so requires a great deal of expertise and time. The IRS estimates the 501(c)(3) application takes over 100 hours in research and preparation. Enlisting the help of a professional greatly increases your likelihood of success and saves you time. With our professional formation services, your specialist prepares and files your applications for you with guaranteed approval. Take advantage of our track record of 100% IRS approval and get your nonprofit approved, guaranteed!
You’ve made it! You turned your passion into a legitimate nonprofit corporation exempt under IRS 501(c) and are benefiting your community. That solid foundation on which you built your organization requires ongoing maintenance. Investing in maintaining compliance with all of the government agencies is an ongoing responsibility and commitment needed to ensure your vision continues long into the future. Check out our compliance guide to learn more!
Once you have registered your nonprofit per the steps listed above, you will need to maintain compliance with all of the government agencies. Staying current with the IRS and state requirements is an ongoing responsibility. Continue reading our California nonprofit compliance guide to learn more!
Tax-Exempt in 2 Weeks!
Download the case study of how our client, Reform It Now, obtained 501(c)(3) tax exemption in only two weeks using the new IRS Form 1023-EZ!
From filing the 1023EZ on August 1st to receipt of the determination letter on August 14th is, in
my humble opinion, simply breathtaking and I dare say, ONLY Harbor Compliance could have achieved that.
Dr. Bob A.
Reform It Now, Inc.
Reform It Now, Inc.
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