Start a Business in Alabama
Starting a business in Alabama is easy. All you need to do is file a few forms with the Alabama Secretary of State and start running your business. Below, we show you how to get started and walk you through some of your options.
One option is, of course, to stop reading and just hire us to start your business for you. At Northwest, we form businesses and provide registered agent service throughout the US. That’s our business, and obviously we recommend starting your business in a certain way. We call it “Starting a Business the Right Way."
Starting your business the right way means hiring a registered agent to form your LLC or corporation so you can protect your privacy and receive the care your business needs to stay active. If you hire us to start your Alabama business, we’ll be your registered agent, provide Privacy by Default®, a business address, mail forwarding and local Corporate Guide® service for life.
How to Start a Business in Alabama
You file a Certificate of Formation for an Alabama corporation or an Alabama LLC with the AL Secretary of State. Alabama is weird in that you have to include a name reservation. LLCs and nonprofits also have to submit everything to the local probate judge. Then the court forwards it on to the Secretary of State for you.
You obtain a federal tax ID number (FEIN or EIN) with the IRS after you have confirmation and a filed certificate from the State of Alabama showing your approved Alabama business.
Opening a business banking account under your new Alabama business name should be easy with these two items.
You obtain a state trade license, if you actually need one. Most businesses don’t, but if you do, these quick links and contact details for the Alabama Department of Business and Professional Regulation are in your online account.
Some local cities or counties have a general license, but most don’t.
You obtain a local trade license if the city or county you’re going to be working in requires it.
If you’re going to have an office or shop, you might need an approval from the city zoning for your type of business in that location.
If you get overwhelmed, just get your business pulling in money and worry about regulations later.
Are You A Do-It-Yourselfer? You Can Save Some Money:
If you want to start a business in Alabama yourself, you can just hire us as your Alabama registered agent. You’ll instantly have the Alabama LLC or corporation forms to file, along with filing instructions on the quickest, cheapest, and most efficient way to form an Alabama corporation or LLC. You’ll get the ongoing support of our online tools, reminders and the support of a professional Alabama registered agent service.START YOUR ALABAMA BUSINESS TODAY
Alabama LLC vs. Corporations
LLCs are popular for small businesses owners. With fewer annual requirements and flexible management options, LLCs are easier to maintain. Corporations are suited for large or fast-growing companies and have the ability to offer stocks —which, in turn, attracts wealthy investors. Plus, corporations have an established power and management structure.
But, what about Alabama? Any pros and cons of starting an Alabama LLC vs an Alabama corporation?
There are no significant advantages to forming an Alabama LLC vs an Alabama corporation, but LLCs might have a slight edge. Both entities are required to pay a $100 filing fee upon formation and file an initial/annual Business Privilege Tax Return, which will cost a minimum of $100. However, only corporations must include an annual report with their tax return—saving LLCs $10 a year. Businesses taxed as C corporations will also owe the state’s corporate income tax in addition to the Business Privilege Tax, so standard LLCs may save a little money on taxes as well.
Whether you start an Alabama LLC or Alabama corporation really depends on your overall goals. The benefits of limited liability are the same for both—so, if your goal is to own a small, single community business, then an LLC will suit all your needs. If you envision branching out and having several investors, then owning a corporation is the best choice for you.
If you want a corporation, you file an Alabama Certificate of Formation:
It will cost $100 to file the Certificate of Formation with the AL Secretary of State, plus a $28 name reservation fee. Online filings in Alabama also require an additional 4% convenience fee.
We custom draft your Alabama Certificate of Incorporation when you hire Northwest to start your Alabama business. The basic requirements of Alabama corporations are:
- The Alabama corporation must have a corporate ending such as INC, Incorporated, Corporation or a different variety.
- The Alabama corporation name must be different than already registered Alabama corporations.
- The number of shares the Alabama corporation is authorized to issue.
- The corporation’s principal address (this must be a street address, and you may use a PO Box as the mailing address).
- You only need to state a specific purpose if you are forming a professional corporation.
- Naming the Alabama corporation’s officers and directors is optional.
- The name and office address of the registered agent in Alabama.
- The name, address, and signature of the incorporator(s).
Alabama technically requires original signatures on your Alabama incorporation filing. The truth is that nobody in the office rejects a filing for lack of an original ink signature. Once they file your Certificate of Formation, they will return the filing to the address on your cover sheet.
Start Your Alabama Business!GET STARTED
If you want an LLC, you file an Alabama Certificate of Formation:
To form an Alabama LLC, you file an Alabama Certificate of Formation. The Alabama Secretary of State Certificate of Formation filing fee is $100 plus at least $50 for the local probate judge and $28 for a name reservation. The basic requirements of Alabama LLC filings are:
- The business name must have an LLC ending or variation of it.
- The Alabama company name must be different than already registered Alabama companies.
- The Alabama LLC’s principal address (must be a physical address, but you may use a PO Box as the mailing address).
- The name and address of each manager or managing member.
- The Alabama registered agent name and the physical address.
- The Certificate of Formation must be signed by a member or authorized representative.
- The certificate is effective when filed, unless you state a different date.
Technically, Alabama requires original signatures on new AL LLC filings. In reality, they don’t reject filings for not having the original ink signature. Your filing will be returned to the mailing address on the cover sheet.