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Starting an Alabama Corporation Just Got Easier (and Cheaper)

Good news for those starting a business in Alabama. As of January 1, 2020, online filings are cheaper, and forming a for-profit corporation is less complicated and subject to fewer fees.

Alabama Corporate Filing – The Old Process

Historically, the process of starting a corporation in Alabama required multiple steps—and multiple fees. The state required the Certificate of Formation to be filed first with a local office (the Judge of Probate in the county of the business’s registered office). After recording the certificate, this local office then forwarded a copy to the Secretary of State Office for processing and approval.

Corporations had to pay fees to both the Judge of Probate Office (minimum $50) and the Secretary of State Office ($100). Expediting was an additional $100. Unexpedited filings could potentially take months.

In every other state, formation paperwork is filed directly with a state agency, like the Secretary of State Office. No local office filing. No middleman. No months-long waits.

Changes to Alabama Business Filings

The first of the year brought major changes to Alabama business filings. The biggest changes include reduced fees and a more streamlined process for forming a for-profit corporation:

All business formations

  • No more $100 expedite fee for online filings.

Domestic for-profit corporations

  • No more county filings or fees.
  • Certificates of Formation are submitted directly to the Alabama Secretary of State. The filing fee is $100 fee.

How did Alabama business filing changes come about? 

In an effort to better align with the rest of the nation (and standards such as the Delaware General Corporation Law and the Model Business Corporation Act of 2016), Alabama recently passed a major overhaul of state business laws. Numerous sections of the state code were updated—including all of Title 10A, Chapter 2 (“Business Corporations”), which was repealed and replaced with Chapter 2A.

One of the biggest changes in this chapter can be found in Section 2.01, which eliminates the Judge of Probate filing requirement.

In addition, the Alabama Secretary of State Office announced the elimination of the online expediting fee in a recent press release, noting efforts to prioritize expediting.

How does the new Alabama corporate filing process work?

Online filings can be completed with the Alabama’s Secretary of State Online Services application. Online filings are still processed quickly (within 24 hours), but they are no longer subject to the $100 expedite fee. There is a small online service fee of a few dollars.

Paper forms are now mailed directly the Alabama Secretary of State. Mailed filings are $100 ($200 expedited). New Alabama Certificate of Formation forms are available on the Secretary of State website.

Do Alabama LLCs still file with the Judge of Probate?

Yes, Alabama LLCs still have to submit their Certificates of Formation to their county Judge of Probate Office. The new changes in filing process only apply to domestic for-profit corporations.

However, there is a bit of good news for LLCs in the near future. While only 8 of 67 counties currently have online filings, the Secretary of State is working with counties to have online business filings for all counties up and running by 2022.

Starting a business in Alabama has gotten a bit easier—but it can be even easier still. At Northwest Registered Agent, we can form your Alabama LLC or Alabama corporation, provide registered agent service and much more. Skip the headache of filing and leave the paperwork to us!

 

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About The Author

Drake Forester, Chief Legal Strategy Officer

Drake spent the early years of his life working at a locally owned sawmill and enjoyed living in the woods. His life experiences have crafted a unique real world perspective to the law and real world industries.