A common question surrounding 508 formation is, “In what state should I start my 508?” This question narrows down to the legal formation of your nonprofit 508 and what state has the most favorable nonprofit incorporation laws. While most 508s in the country are formed in the liberal state of Washington, for those of us who prefer less regulation and red tape, Arizona stands out as one of the most attractive domiciles for nonprofit corporations.
Here are some of the benefits of incorporating your 508 in Arizona:
- Arizona only requires at least one director.
- Arizona has no legal qualifications for directors such as a minimum age requirement.
- Arizona does not require directors to be residents of Arizona unless the Articles of Incorporation or Bylaws so prescribe.
- Arizona allows nonprofit corporations to use the statutory agent’s address as the corporation’s Arizona business address.
- Arizona has adopted the Model Nonprofit Corporation Act (1988 MNPCA).
- Arizona does not mandate audits for nonprofits.
- Arizona does not require nonprofits to register to solicit in the state.
- Arizona does not regulate commercial co-ventures.
- Arizona aligns tax filings with the federal requirements.
- Arizona limits the Attorney General’s authority to that conferred by statute.
When considering the best state of formation for your 508 nonprofit corporation, these combined factors make Arizona a highly favorable jurisdiction in which nonprofit 508s can operate.