How to Start an Alabama Corporation
To start an Alabama corporation, you must file a Certificate of Formation with the Secretary of State (via your county probate judge), pay $128 (plus a variable county filing fee), and obtain an EIN from the IRS. The complete steps to incorporating in Alabama are as follows:
- Reserve your corporation’s name with the Secretary of State ($28 online)
- File your Certificate of Formation with your county probate judge (variable probate judge fee and $100 state filing fee)
- Wait for the judge to pass the paperwork on to the Secretary of State
- Receive the filing confirmation from the Secretary of State (in a week to 6 months later, depending on filing methods)
- Order a certified copy of your Certificate from the Secretary of State if needed
- Get a Federal EIN tax ID for the Corporation
- Create Alabama corporate bylaws
- Take these documents to the bank and get an Alabama corporate bank account
- Pay the Department of Revenue your Initial Business Privilege Tax within 2.5 months of your formation date
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Alabama Certificate of Formation free download. When you're done filling out the form, submit it to your state.
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5 Day Alabama Corporation For $511 Total
How to File an Alabama corporation Certificate of FormationTo form an Alabama Corporation, you file the Certificate of Formation in the following steps:
What is the Cost of an Alabama Corporation?
$186. The state filing fee is $100, and the mandatory name reservation fee is $28 online. In Houston County where we file, the county filing fee is $58. (Filing elsewhere? The county fee tops out at $73 in Coffee County.)
When you hire Northwest, your total, out-the-door cost is $411 ($511 expedited), including the above fees.Get Started
How much does a corporation in Alabama cost each year?
At least $110 in state fees. Alabama corporations are required to file an Annual Report ($10) together with a Business Privilege Tax return (minimum $100).Get Started
What is the Alabama Business Privilege Tax?
This is a tax that all Alabama business entities must pay. There’s an initial tax (which must be filed within 2.5 months of incorporation) and an annual return, which is due March 15th along with your Annual Report. The Business Privilege Tax rate is based on the net worth of your corporation in Alabama. There’s a minimum tax of $100.
Forget to file? Late fees start at $50 but increase depending on how much you owe. Northwest can help you remember to file—when you hire us as your registered agent, we’ll send you reminder notifications so you’re not stuck with annoying late fees.
What are the taxes for an Alabama corporation?
In addition to the Business Privilege Tax, Alabama has a flat corporate net income tax rate of 6.5%.
Is a Registered Agent Required for an Alabama Corporation?
Yes, your corporation must have an Alabama registered agent. You can take this responsibility on yourself and be your own registered agent—but you already have so much on your plate, and it’s not an easy job.
Alabama is a state that follows its own path—nothing is done quite the same way as it’s done in other parts of the country. Instead of filing your Certificate of Formation with the SoS, you have to go through the county probate judge. Instead of just an Annual Report, it’s a report and tax filing. Everything seems to require an extra form, an extra filing, an extra authorization—it’s not easy starting a business in Alabama.
Hiring a service like Northwest can make things easier. As your registered agent, our address goes on your Certificate instead of yours. Your Certificate of Formation is a part of the permanent public record, so when you list your own address, you lose privacy and gain a bunch of annoying junk mail. Using our address throughout your Certificate also provides consistency—you don’t have to worry about updating multiple addresses as your corporation grows and changes. And, when you hire Northwest, we’re the ones tied to the desk from 9-5 waiting for legal notifications. You’re free to run your business on your time.Get Started
Alabama Corporation Versus Alabama LLC:
Costs are pretty much the same for both Alabama corporations and LLCs. To start your business, you’ll pay the same state and county filing fees and name reservation fees. To maintain your business, both LLCs and corporations will have to file Annual Reports and pay Business Privilege Taxes. Tax obligations in general can be similar as well, depending on tax election. For example, both corporations and LLCs can choose to be taxed as S corporations.
While there aren’t any significant cost advantages, there are differences in how corporations and LLCs operate. Corporate advantages mostly stem from how long corporations have existed and how they can use stocks to their benefit. Because corporations have been around for hundreds of years, they have a long legal history (meaning few surprise rulings in the courtroom) as well as a sense of trust and esteem. Stocks also give corporations options LLCs don’t have—corporations can lure investors with perks like preferred stock, and corporations can even join the world of Wall Street and become publicly traded. As a result, corporations are common choices for large businesses or those that hope to scale quickly. LLCs, on the other hand, are popular for small businesses. Considering an LLC? Here’s information on starting an Alabama LLC.
Do I Need a Tax ID Number (EIN) for an Alabama Corporation?
Yes, corporations are required to get an EIN. You’ll need your EIN for filing taxes, opening a corporate bank account and even applying for some licenses and permits. EINs are free from the IRS. Or, skip the extra paperwork and hire Northwest to get your EIN for you when you sign up for our services.
Does an Alabama Corporation Need a Business License?
The Code of Alabama Title 40 Chapter 12 lists all sorts of licensing requirements—pretty much every business will need some kind of license. Although required by the state, most licenses are obtained locally through the county probate office or county licensing commission.
Cities and towns often have their own municipal licensing requirements as well. For example, Birmingham requires those conducting business in city limits to get a general business license.
What is the Alabama Annual Report?
Your Alabama Annual Report is a form you file by March 15th each year to ensure the state has your most current ownership and contact information. Thankfully, the report itself is pretty straightforward—but unfortunately, you have to submit more than just the report.
Alabama paperwork is like Colombo: just when you think the questions are over, there’s always “one more thing.” Along with your Annual Report, you must also file the accompanying Alabama Business Privilege Tax.
Alabama Corporation Certificate of Formation Requirements:
This is a unique requirement—Alabama is the only state that requires you to reserve your name before you can file your Certificate of Formation. Don’t worry, it won’t slow down the process much—online name reservations ($28) are processed immediately.
You must include “Corporation,” “Incorporation” or an abbreviation like “Corp” or “Inc.”
On the first page, there’s a box with space for the name and address of the person who prepared the form (typically the same person as your incorporator). When you hire Northwest to form your Alabama corporation, we’ll prepare your Certificate of Formation.
This is the main business office of your corporation and will become part of the permanent public record. Hire us as your registered agent, and you can use our Alabama address—and benefit from the fast filing times in Houston County.
You can either list an individual Alabama resident (such as yourself) or an authorized business (like Northwest). We recommend Northwest.
Registered Agent Address
This Alabama street address is where your registered agent will be available to accept legal notifications during business hours. Our address will go here when you hire Northwest.
It sounds existential, but this section is really just asking about what your business will actually be doing. The form already includes a general purpose, so a sentence or two here describing your business activities (for example, stating that your corporation is being formed to restore, repair and maintain motorcycles) is sufficient.
Number of Shares
List how many shares you wish to create (you need at least one). You’ll distribute some or all of these shares later on at your organizational meeting. You can also list the par value (initial price) of these shares, but this is optional, so you’re free to skip that part.
Someone has to sign and submit your Certificate of Formation, and that person is your incorporator. Incorporators don’t have to be directors, officers, or anyone in the corporation. They do, however, have to include their name and street address. We’ll be your incorporator when you hire us.
List at least one director and their street address on your Alabama Certificate of Formation.