How to Incorporate in Alabama
You have better things to do than stress about the hassle of corporation formation. Let us do what we do best, so you can what you do best: build your business.
Incorporating your business in Alabama is a multi-step process that starts with completing and filing the Name Reservation Form. After that, you are required to complete and file the corporation formation document called the “Certificate of Formation.” (This document may also be sometimes referred to as the “Articles of Incorporation” in the Alabama Business Corporation Law.)
Then, in order to establish your corporation, you need to complete the following:
- Draft & Finalize Bylaws
- Obtain an Employer Identification Number
- File a Beneficial Ownership Information Report
- Hold an Organization Meeting
- File the Initial Business Tax Return
Phew. That sounds exhausting. Good thing Alabama Registered Agent can lend a hand.
Alabama Registered Agent LLC
We get the entire job done for a flat fee of $385.
What does Alabama Registered Agent LLC incorporation service include?
- 365 Days of Registered Agent Service
- Access to Your Own Safe & Secure Client Account
- Completed & Filed Certificate of Formation
- Custom Bylaws & Stock Certificates
- Transparent & Straightforward Pricing
- Option to add trade name (DBA) service for $135 after signing up for incorporation service. Just select “Trade Name Service” inside your client portal.
|Alabama State Filing Fees*||$236|
|Our Formation Service Fee||$100|
|One Year Registered Agent Service||$49|
*Includes state fee, name reservation fee, and online processing fees.
Advantages of Incorporating in Alabama
Corporations are the oldest legal business entity in the United States. To investors and other companies, the “Inc.” at the end of your company name means that you mean business.
Investors are drawn to the predictability and stability of corporations. Unlike LLCs, corporations have more rules and regulations making investing easier and more approachable for even a beginner investor.
What if I don’t live in Alabama? Can I still incorporate there?
Yes–anyone can incorporate a business in Alabama. The only requirement is that you list a registered agent with a physical, Alabama street address on the Certificate of Formation.
Why should I choose Alabama Registered Agent LLC to incorporate my company?
Forming a corporation in Alabama can be tricky if you take it on yourself. Here at Alabama Registered Agent LLC, we have the know-how and experience to get your business formed quickly, efficiently, and for less money than our competitors. Doing it yourself might be hard, but choosing Alabama Registered Agent LLC is a piece of cake.
DO IT YOURSELF
Step-by-Step Instructions to Incorporate in Alabama
For you rugged D-I-Y types out there, here’s some intel. You may not want to hire us, but we don’t want you to mess this up.
Choose a Corporation Name
In Alabama, corporation names must include the word “corporation” or “incorporation,” or an abbreviation of one of those words (with or without the punctuation).
Also, the name of your company must be different and distinguishable from any other business entity on file with the Alabama Secretary of State Office. Before you file, it’s a good idea to check the Alabama Secretary of State Business Entity Records website to make sure the name you want isn’t already registered.
Complete the Certificate of Name Reservation
Before you file the Certificate of Formation, you must file the Certificate of Name Reservation. This document requires the following information:
- Type of business entity
- Name of company
- Name and address of requester
- Where the filed documents should be mailed
- Payment information
This document can be completed and filed online at the Alabama Secretary of State Online Services website or you can file via mail:
Office of Secretary of State
PO Box 5616
Montgomery, AL 36103
This document does not require a cover letter submission. If you want to file by mail, you can download the PDF of the form from the Alabama Secretary of State Name Reservation Request Form for Domestic Entities website. For mail submissions, there is no guaranteed turn around time.
When you file the Certificate of Name Registration online, you can immediately proceed to filing the Certificate of Formation. However, if you file the Certificate of Name Registration by mail, you will have to wait until you receive confirmation from the Alabama Secretary of State to proceed to incorporating your business.
Complete the Certificate of FormationFiling this document online is highly recommended and saves a lot of time in the process of incorporating your company.
If you file the Certificate of Name Registration via mail, you will receive an official filed copy in the mail from the Alabama Secretary of State. Once you receive that, you are ready to complete the Certificate of Formation.
- List the Principal Address of the Corporation
The principal address of the company is the primary location where the financial and official business documents for the company are kept. It is not required that this address is in Alabama, however, you must provide a legitimate street address for the [principal office. There is the option to provide an additional mailing address for the office as well.
- Choose a Registered Agent
All corporations in Alabama are required to choose a registered agent. A registered agent is a third party individual or entity that is elected by the incorporators of the company to receive legal correspondence on behalf of the company.The registered agent is required to have a physical street address in Alabama. A PO box address is not valid. Alabama law requires that your corporation maintains a registered agent at all times. If it doesn’t, your corporation will be subject to penalty. For $49, Alabama Registered Agent LLC can serve as your corporation’s registered agent for 365 days.
- List the Purpose of the Corporation
You are required to provide a brief statement of purpose for your corporation. This description does not have to be highly detailed–a vague overview is all that is needed. A general statement such as: “The transaction of any lawful business for which corporations may be incorporated as defined by the Alabama Corporation Business Law,” will suffice this requirement.
- Provide Share Information
You must list the number of shares the corporation is authorized to use. Alabama Law requires that the corporation issues at least one share. However, you are not required to list the par value of shares.
- List Incorporator and Director Information
The name and address of at least one incorporator must be listed on the Certificate of Formation.
- Sign the Certificate of Formation
The Certificate of Formation must be signed by the chair of the board of directors, a corporate officer, or an incorporator.
- List the Principal Address of the Corporation
File Your Documents
Incorporation documents can be filed by mail or online.
You must submit the original of the Certificate of Formation, along with one copy of the document, to the Alabama Secretary of State. In addition to the Certificate of Formation, you are required to include the approved Certificate of Name Registration and a check or money order for $200 made out to “Alabama Secretary of State.”
If you complete the incorporation process online, both the Certificate of Name Reservation and Certificate of Name Formation can be submitted–and paid for–online, at the same time.
To incorporate your company online, you can visit the Alabama Secretary of State Online Services website. Form there, you have the option to file as a non-subscriber or a subscriber. Subscribers receive a price reduction for the majority of online services. Online services incur a convenience fee, typically 4%.
Once your company is incorporated, it is a good idea to print several copies of the filed Certificate of Formation for your records.
Draft and Finalize Bylaws
Alabama corporations are required to draft and adopt bylaws. Corporate bylaws are a set of policies and procedures agreed upon by the initial incorporators that provide definitive rules for how the corporation will be operated. The bylaws are typically adopted by the corporation at the first meeting of directors and shareholders–usually referred to as the organization meeting.
Bylaws usually include information regarding the following topics:
- The initial shareholders and their contributions to the company
- The authorized issued shares
- The stock structure of the company
- The duties and powers of the board of directors
- The duties and powers of the corporate officers
- When and where the shareholder meeting will be held
If you hire Alabama Registered Agent LLC to incorporate your business, custom bylaws are included in your incorporation package.
Obtain an Employer Identification Number
All corporations must have an employer identification number (EIN) from the Internal Revenue Service (IRS). An EIN is a unique nine-digit number that is used by the IRS for federal taxation purposes. You will also need an EIN to open a business banking account. Obtaining an EIN is easy, free, and can be completed entirely online. Visit the IRS website to apply.
File a Beneficial Ownership Information Report
It’s mandatory for most corporations in the U.S. to file a Beneficial Ownership Information (BOI) report with the Financial Crimes Enforcement Network (FinCEN) within 30 days of incorporation. (Though corporations formed before January 1, 2024 have until January 1, 2025 to file theirs.) This filing must be completed online, and requires information about your corporation as well as your corporation’s beneficial owners and company applicant. The information you provide in your BOI report will NOT be made public.
Hold an Organizational Meeting
The agenda of the organizational meeting includes:
- The election of the board of directors
- The adoption of the bylaws
- The issuing of shareholder certificates
- Resolution of additional business-related matters
Electing a Board of Directors
All corporations are required to have a board of directors. The board of directors oversees all corporate power and manages the business and affairs of the corporation. The specific qualifications for who may serve on the board of directors may be outlined in the Certificate of Formation of the bylaws of the corporation. Anyone serving on the board of directions must be at least nineteen (19) years old. It is not required that a member of the board of directors is from Alabama or is residing in Alabama at the time of incorporation–unless otherwise set forth in the bylaws.
Alabama law requires that the board of directors has at least one or more members. The election of the board of director(s) occurs at the organization meeting as well as every year at the annual shareholder meeting.
File the Initial Business Tax Return
Alabama corporations are required to file the initial business tax return within two and a half months after incorporation. According to the Alabama Department of Revenue website, due dates vary based on fiscal year designation. A copy of the required form (Form BPT-IN) is available online along with detailed instructions for how to complete the filing.
Hold an Annual Shareholder Meeting
As per Alabama Law §10A-2-7.01, all Alabama corporations are required to hold a shareholder meeting annually. At each shareholder meeting, an election of the board of directors is held. Typically, each shareholder has one vote—unless otherwise specified by the bylaws. If a shareholder cannot attend the meeting, they may vote via a proxy.
File an Annual Report
Alabama corporations fulfill the annual report requirement when they file their initial business tax return. The minimum payment due with this filing is $100. Corporations file Form CPT. The combined form is available online for each specific type of business entity. For most corporations, the Alabama business privilege tax return is due no later than April 15.
FREQUENTLY ASKED QUESTIONS ABOUT INCORPORATING IN ALABAMA
Who is an incorporator?
The incorporator is the individual who signs and delivers the Certificate of Formation to the Alabama Secretary of State. The incorporator can be, but is not required to be, a shareholder of the company.
What’s the difference between a corporation and an LLC?
Aside from differences in taxation, LLCs and corporations differ in formality and rules and regulations. Corporations are required to elect a board of directors, issue stock, and hold an annual shareholder meeting. These formalities do not apply to LLCs.
How will my Alabama Corporation be taxed?
A corporation, unlike an LLC, is subject to Alabama’s corporate tax rate of 6.5%. LLCs are considered “pass-through” entities. This means that any company profit is passed on to the members of the LLC and taxed as personal income without being taxed at a corporate level. You can, however, elect to have your corporation taxed as an S-corp-which is also a pass-through entity.
What’s the difference between a C-corp and an S-corp?
When you incorporate your company in Alabama, the IRS, by default, considers it a C-corp. Once you form your corporation, you can elect to have your entity taxed as an S-corp by filing Form 8832 with the IRS. By and large, a C-corp and an S-corp are similar in requirements. However, the real difference is how they are taxed.
S-corps are taxed like a pass-through entity in the fact that the profits and losses of the corporation as passed onto the shareholders and taxed as personal income. To become an S-corp, a corporation must be a domestic entity, must not exceed 100 shareholders, and only have one class of stock.
Does my corporation require licenses and permits?
License and permit requirements vary between industry and jurisdiction. Depending on where you anticipate doing business and what kind of business you want to do, you may need one or more license and permit. It is a good idea to check and see what the requirements are. A good place to start is the Alabama Department of Labor: Labor Marketing Information Division Career Resource. This guide provides an in-depth list of all occupations that require licensing and resources for how to obtain the required license or permit.
Where can I learn more about Alabama Corporate Law?
You can find more information about Alabama Corporate Law online at the Alabama Legislature website.
Do I have to file a BOI report for my corporation in Alabama?
Yes, you most likely do have to file a BOI report for your Alabama corporation. This report is a requirement of the Corporate Transparency Act (CTA), which aims to prevent fraud and money laundering by keeping better track of corporations and the people behind them. There are a few exemptions, which means some companies don’t have to file a BOI report. But, these companies already operate in highly regulated industries, like insurance and finance.
What information do I have to provide in my BOI report?
The BOI report for your Alabama corporation must include information about your business, as well as information about your business’s beneficial owners and company applicant. Information for your corporation must include:
- Company name (exactly as it appears on your incorporation documents)
- Any DBA names
- Company address and jurisdiction of formation
- Federal Tax ID
And for your beneficial owner / company applicant:
- Full legal name
- Date of birth
- Residential address
- Photo ID
What’s the difference between a beneficial owner and a company applicant?
- Beneficial Owner: A beneficial owner for your corporation is anyone with significant influence over your business. This could mean a board member, CEO, or anyone with at least 25% of your stock value.
- Company Applicant: This is simply the person who filed incorporation documents for your business. If someone else was responsible for directing that person to file incorporation papers, that person must also be listed as a company applicant for your corporation. (You may include up to two people.)
WE CAN HELP.
Alabama Registered Agent LLC is ready to lend a hand.
For $385, we will incorporate your business. That’s one less thing you have to worry about.