FREE GUIDE TO FORMING AN ALABAMA CORPORATION

Formation

In Alabama, you file a form called the Certificate of Formation with the Secretary of State to incorporate a corporation.

Incorporating in Alabama is a unique process, as no other state has a similar filing procedure. Alabama requires filers to send their completed Certificate of Formation to the probate judge in the county where they’ll be incorporating. Once the judge approves the paperwork, he or she will pass the paperwork onto the Secretary of State. The Alabama Secretary of State will then send the filer a confirmation that their corporation has been formed.

What you need to start an Alabama corporation:

  • Certificate of Formation
  • $100 filing fee (an additional $100 if you want the filing expedited)
  • $50 probate judge fee; in Alabama filings are sent to the probate judge
  • $28 name reservation fee
  • Corporate bylaws (you should know how your corporation will be structured before filing)

Things to know before incorporating in Alabama:

  • How long will Alabama take to form my corporation?
    It will take the state of Alabama 6 months to process your corp’s Certificate of Formation if you mail the form. This is because you sent your corporate forms to the county where your Alabama registered office is located. Most counties take 7-10 days to process the incorporation. Our county only takes one day. Then the county forwards your incorporation to the Secretary of State who takes several weeks to process the incorporation.
    We really suggest that you pay the $100 expedite fee to get your incorporation processed by the Secretary of State in 10-14 days.
    If you need a federal tax ID number, that can be obtained online immediately with the IRS.
  • How much does it cost to form an Alabama corporation?
    The total fee is $178 to form a corporation in Alabama ($28 name reservation, $50 probate judge fee, $100 filing fee). Add an additional $100 if you choose to expedite the filing.
  • Ongoing fees?
    The Secretary of State requires an annual report when an corporation files its franchise tax return. (The Alabama business privilege tax return). C corps file Form CPT. The annual report will cost $10 every March 15th, and the BPT at least $100. Alabama corporations must file an initial return within 2.5 months of their incorporation date. From that point on, the annual report is due every March 15th. Initial returns use Form BPT-IN. They cost a minimum of $100 but could be more.

How to Start an Alabama Corporation

  1. Step 1: Reserve your name
    Alabama is unique in that it is the only state where you must reserve your name prior to filing your Certificate of Formation. The fee to reserve your corporation’s name is $28. You can reserve your business’ name on the Secretary of State’s website. Start by doing a free business name search.
  2. Step 2: File the Certificate of Formation
    You will need to include the following:

    • You can file with our free Certificate of Formation or the form provided by the State of Alabama on their website. Start by filling in the reserved name of your corporation.
    • List the corporation’s purpose. Generally, a sentence about the type of product or service your corporation will be providing should be satisfactory.
    • The number of shares your corporation will initially issue. Use a number that is easily divisible, like 1000, or a similar number.
    • Name and address of your Alabama registered agent. Your agent doesn’t need to sign the certificate.
    • The name(s) and address(es) of the corporation’s initial director(s).
    • The name(s) and address(es) of the incorporator(s)—this is the fancy name for the person filling out the Certificate of Formation.
    • Mail the filing and the filing fees. All domestic filings in Alabama need to be sent to the probate judge in the county where the LLC is being formed. This means there are a lot of different places where you might have to send your filings for approval in Alabama. Find an Alabama Probate Judge for the appropriate mailing address. There is an approximate wait time of six months for filings not expedited. You should hear back from the Alabama Secretary of State within three days if you choose the $100 expedite option.
  1. Find county judge and mail the Certificate of Formation
    Corporate bylaws are the document that governs how the corporation operates. They do not need to be filed or sent anywhere, but at your first board of directors meeting, one of the first items on the agenda should be to adopt the bylaws. You can draft your own or use our free bylaws template.
  2. Step 4: Obtain an EIN
    Once you’ve received your Certificate of Formation from the Secretary of State, your Alabama LLC has technically been formed—but there are a couple things you need to do to make sure it remains active in its first year. First, you need to get an EIN.Employer Identification Numbers (EINs or FEINs) are like Social Security Numbers for businesses. Once your LLC has been formed with the State, you’ll need to contact the IRS and apply for your EIN. You can apply on the IRS website and receive your number instantly, or you can file form SS-4 to get an EIN for your corporation.
  3. Step 5: Pay your taxes
    All new Alabama businesses need to file and pay their Initial Business Privilege Tax within 2.5 months of their formation date. The tax is a minimum of $100. It’s a simple form, but you’ll need your EIN to complete it.
  4. Step 6: Run your business
    With your Alabama LLC now up and running, you need to focus on running your business. To do so, you’ll likely need to do things like open a bank account in your LLC’s name, obtain city and county licenses, or receive zoning approval from your city. To learn how to do these things and more, visit our starting an Alabama business page for more information.

What you need to know about incorporating in Alabama:

How do I incorporate in Alabama?

We can form your corporation for you, or we can show you how with our in-depth guide on listed above.

How much does it cost to start a corporation in Alabama?

The total cost to form an Alabama corporation is $178 if you do it yourself. This fee includes a $28 name reservation fee, $50 probate judge fee, and a $100 filing fee to the Secretary of State. However, this does not include the $100 expedite fee and it may take up to three months to form the corporation if you don’t pay it.  Northwest can form your Alabama corporation for $475–including all state fees and the expedite fee.

How long will it take?

Alabama will take up to six months to form your corporation. If you want to incorporate faster, you can pay a $100 expedite fee. If you pay this fee, your corporation will be created within three days.

Name reservation?

Alabama is the only state that requires you to reserve your corporation’s name before filing. Name reservations cost $28. You can perform a free business name search online.

Name requirements?

Your business’ name must include the word “corporation” or “incorporated”, or the abbreviation of either word (“inc.” or “corp.”).

Registered Agent?

You must designate an Alabama registered agent in your Certificate of Formation. Your registered agent accepts service of process and official mail for your corporation.

How are corporations in Alabama formed?

Corporations are formed with the Alabama Secretary of State, but internally, day-to-day, a corporation is governed by its corporate bylaws, a document that lays out everything the corporation does, how profits will be shared, who is responsible for what, everything.

Where can I find forms for my Alabama corporation?

In our free corporation forms section, you’ll find every legal document you’ll need for your Alabama corporation.

What forms will I need?

Below, you’ll find links to forms commonly used when forming corporations in Alabama:

Get a tax identification number

After you create your corporation with the state of Alabama, you’ll need to get an Employer Identification Number for your corporation, or what’s more commonly known as a tax ID number.

Open a bank account

At your first director’s meeting, you may need to agree to resolution to open a bank account for your corporation and bring it to your bank when you open the account.

What if I’ve decided to form an LLC?

If you are considering forming and LLC, we suggest learning more about Alabama Limited Liability Companies (LLCs).

Alabama Corporation Maintenance

Annual reports

All Alabama corporations must file an Alabama annual report with Department of Revenue by March 15.

In Alabama, this report is filed along with the Alabama Annual Business Privilege Tax. Both the tax calculation and the report are completed on the same form.

Within 75 days of having formed your corporation, you’ll need to file your Initial Business Privilege Tax Report and payment by completing Form BPT-INT. By March 15 of each following year, you’ll need to pay the tax and file the annual report by completing Form-CPT. The tax is based on the net worth of your corporation. It is a minimum of $100.

Taxes

Alabama has a state corporate net income tax rate of 6.5 percent. Alabama corporations are subject to Alabama taxes.

Doing business outside Alabama

If you want to do business in another state you must complete a “foreign qualification” or “foreign corporation registration.” To register your AL corporation in a state other than Alabama, you’ll likely need to obtain a certificate of existence from the Alabama Secretary of State.

Other considerations: