How to Incorporate in Alabama
If you’re looking to incorporate in Alabama, you’re in the right place. This guide will help you file formation documents, get tax identification numbers, and set up your company records.
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Choose a Corporate Structure
Incorporating means starting a corporation. If you want to form an LLC, please see "How to Form an LLC in Alabama".
Is your corporation for-profit or not-for-profit? If you are starting a nonprofit, please see "How to Start a Non-Profit Organization in Alabama".
C-Corp and S-Corp refer to taxation with the IRS, not to legal structures. Your corporation is taxed as a C-Corp unless you file an election to be taxed as an S-Corp (explained below).
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Check Name Availability
The legal name of your corporation may not conflict with any other registered name. Check availability of your desired name by conducting a name search.
Name Search: Alabama Secretary of State - Business Services Division Name Reservation: Required Suffix Requirements: "(a) The name of a corporation or foreign corporation registered to transact business in this state must contain: (1) the word “corporation” or “incorporated”; or (2) an abbreviation of one of those words.
(b) Subsection (a) does not apply to a nonprofit corporation or foreign nonprofit corporation, or to banks, trust companies, savings and loan associations, or insurance companies."
AC §10A-1-5.04 -
Obtain a Name Reservation
In Alabama, a name reservation is mandatory.
Agency: Alabama Secretary of State - Business Services Division Form: Filing Method: Mail or online.
Agency Fee: $10 for standard service or $25 for expedited.
Due: 1 year after name reserved.
Notes: Renewing grants a one year extension of the name reservation.
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Appoint a Registered Agent
Before you officially file to create your Alabama LLC, you will need to decide who your Alabama registered agent will be. A registered agent is a business's legal appointee to receive notice of lawsuit and other legal or government notices.
State law requires every LLC to have a registered agent. The registered agent is designated when you file Alabama articles of organization with the Alabama Secretary of State - Business Services Division.
Our reliable registered agent service fulfills this requirement. You get:
- Same-day documents from our local office in Dothan
- Immediate online access to state forms with our address and, where required, our signature
- Annual fees from $89 to $99 per state with no additional charges
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File Alabama Articles of Incorporation
File the articles of incorporation to create your corporation.
Agency: Alabama Secretary of State - Business Services Division Form: Filing Method: Mail
Agency Fee: $100 state filing fee + min $50 county filing fee + optional $100 secretary expedite fee
Turnaround: ~7-10 business days at the probate's office. Then ~6 months at the secretary of state unless you pay the $100 expedite fee for ~10-14 day turnaround.
Law: Notes: - Mail one original and two signed copies to the Office of the Judge of Probate in the county where the corporation’s registered office will be located.
- Include a $100 state filing fee plus the applicable filing fee in your county (minimum $50, ask your Office of the Judge of Probate).
- Attach your Name Reservation Certificate.
- See AC §10A-2-2.02: Supplemental Provisions
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Establish Bylaws & Corporate Records
Your corporation must keep correct and complete books and records.
Draft bylaws (potentially using a template) which is the governing document for the corporation. The bylaws of a corporation may contain any provision for managing the business and regulating the affairs of the corporation that is not inconsistent with law or with the articles of incorporation (C.R.S. 7-102-106). You will review and ratify the bylaws at your first board of directors meeting.
A corporation shall keep as permanent records minutes of all meetings of its shareholders and board of directors, a record of all actions taken by the shareholders or board of directors without a meeting, a record of all actions taken by a committee of the board of directors in place of the board of directors on behalf of the corporation, and a record of all waivers of notices of meetings of shareholders and of the board of directors or any committee of the board of directors (C.R.S. 7-116-101).
Your filed articles of incorporation and bylaws are the first documents for your corporate records. Your corporation will generate many other official records such as:
- Meeting minutes
- Shareholder resolutions
- EIN verification letter
- Amendments and other filings made to the corporation over its lifetime
Organizations need a secure, centralized tool for managing and accessing sensitive records. Our Records Manager software offers a simple, efficient way for corporations to store records, track officers, directors, and shareholders, and customize meeting notifications.
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Appoint Initial Directors
The initial directors serve on the board until the annual meeting of shareholders (when directors are elected to the board). If the initial directors are not named in the articles of incorporation, they are appointed by the incorporator. The incorporator documents and signs this action for the corporate records.
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Hold Organizational Meeting
Hold the first meeting of the board of directors. "After incorporation the initial directors shall hold an organizational meeting, at the call of a majority of the directors, to complete the organization of the corporation by appointing officers, adopting bylaws, ..., and carrying on any other business brought before the meeting." (AC §10A-2-2.05). Keep minutes of this meeting.
The following state laws apply unless overridden by the organizational documents, where permissible.
Directors Officers - Number: One or more required.
- Qualifications: Natural person at least 19 years of age. No shareholder requirement. No residency requirement.
- Quorum: Majority of directors, unless otherwise fixed in bylaws.
- As provided in the bylaws.
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Issue Stock Certificates
The owners may be issued stock certificates to serve as proof of ownership in the corporation. Remember to hold the first annual meeting of the shareholders (the owners of the corporation) according to bylaws and keep minutes of this meeting.
The following state laws apply unless overridden by the organizational documents, where permissible.
Shareholders Annual Shareholder Meeting - Qualifications: N/A
- Stock Certificate: not required.
- Voting Trusts Allowed: Yes.
- Required: Yes, but no consequence to not holding one.
- Action by written consent: Allowed if by all shareholders entitled to vote on the action.
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Get a Federal Employer Identification Number (EIN)
Your corporation must obtain an EIN regardless of whether it will hire employees.
Submit to: Internal Revenue Service
http://www.irs.gov/Form: IRS Form SS-4 Guidance: IRS Pub 1635: Understanding Your EIN Filing Method: Mail, phone, fax, or apply online with the IRS Fee: $0 Turnaround: Immediately online Notes: The IRS website is only available during certain hours. Print your EIN before closing your session. -
Get Alabama State Tax Identification Numbers/Accounts
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File Initial Business Privilege Tax Return
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Consider Electing S-Corp Taxation
By default, your corporation is taxed as a C-Corporation. Some corporations, especially smaller ones, benefit from electing S-Corp tax treatment:
- C-Corps suffer from double taxation: the corporation pays taxes on profits then members pay taxes on their distributions. If profits exceed $250,000 per owner, you provide employee benefits, or you will re-invest most of your profit in the business, you may benefit from the low tax rates on retained earnings under C-Corp treatment.
- S-Corp treatment avoids double-taxation. It is generally the best choice for small businesses. To accomplish this, file Form 2553: S-Corp Election with the IRS.
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Obtain Business Licenses & Permits
To run your business legally, you must obtain applicable licenses and permits. The easiest way to navigate the wide range of federal, state, and local requirements is to search by your business type and locality using the Small Business Administration Business License & Permit look-up tool.
Alabama Business Privilege License
Initial Registration
Filing Method: In person or mail.
Agency Fee: Varies by county.
Notes: The application process for state business privilege licenses is handled at the county level and therefore varies from county to county.
Registration Renewal
Filing Method: In person or mail.
Agency Fee: Varies by county.
Due: Licenses expire on September 30 of each year and must be renewed annually by October 31.
Notes: The renewal process for state business privilege licenses is handled at the county level and therefore varies from county to county.
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Ongoing Filings to Maintain Your Corporation
You must file federal and state tax returns.
Many states also require business entities to file an annual report to maintain good standing with the secretary of state. If an annual report is required for corporations formed in Alabama, view the table below.
Alabama Corporation Annual Report Requirements:
Not required
There is no standalone annual report requirement for corporations in Alabama, although entity information is requested annually as a part of the business privilege tax return.
For more details, see our Alabama annual report information center page.
You will need to demonstrate your company’s good standing to banks, customers, and other state agencies. After all the work involved in forming your Alabama corporation, don’t let a missed annual report filing cause your new business to fall out of compliance.
Tracking and filing annual reports on your own can be time consuming and lead to accidental lapses. Protect your corporation’s good standing with Managed Annual Report Service, which tracks and automatically files reports on time, every time, so you can focus on your business.
