Form a Corporation in Alabama.

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Choosing a Corporation Name

Corporation information in Alabama The business name you choose for your new Alabama corporation must be readily distinguishable from all other registered and reserved Alabama business entities. It must end with either “Incorporated” or “Corporation” (or an abbreviation thereof)-or, if it is to be a banking corporation, “Bank,” “Banking,” or “Bankers.” The name cannot state or imply that the corporation is organized for some purpose other than the one specified in its articles of incorporation.

You must reserve your new corporation’s name with the state filing office before filing your articles of incorporation. This costs $10 and is good for up to 120 days.

Articles of Incorporation

New Alabama corporations must file an original and two copies of your articles of incorporation with their local county probate judge before they can start conducting business as a corporation. Once the judge finds that the articles are in compliance with state law, he or she will issue (publish) one certified copy of the articles, return one to the LLC, and forward the third within 10 days to the Corporate Section of the Alabama Secretary of State’s office. Filing requires a $40 fee payable to the Alabama Secretary of State, and another $35 payable to the county probate judge, for a total of $75.

The articles must be delivered by at least one of the incorporators, who must sign and deliver the articles to the judge. The following information must be included in the articles of incorporation:

  • Name and address of incorporator(s)
  • Brief statement of corporate purpose, which may be the general statement, “the transaction of any or all lawful business for which corporations may be incorporated under the Alabama Business Corporation Act.”
  • The address of the corporation’s principal office
  • The address of the corporation’s initial registered office
  • The name of the new corporation’s initial registered agent at that office
  • Whether the corporation will be of perpetual or limited duration
  • The share classes of stock that the corporation is authorized to issue, including the number of shares in each class
  • The name and address of each alien (out of state) affiliate

Alabama state law also allows (but does not require) optional items to be included in the articles of incorporation for those corporations who wish to formally specify additional information, such as:

  • Shareholders’ rights to adopt initial bylaws
  • Provisions managing the business and regulating the corporation’s affairs
  • Provisions regulating the powers of the corporation, its board of directors, and shareholders
  • A provision eliminating or limiting the liability of a director to the corporation or its shareholders for money damages in certain situations

Since Alabama law does not use the concept of par value for stocks, you do not need to state a par value for your shares.

Registered Agent and Office

Every Alabama corporation must have a registered agent in the state-someone designated to receive official state administrative and legal correspondence. The registered agent must be either an adult Alabama resident, or a corporation with a business office identical to the registered office.
The registered office may be at any of the corporation’s places of business..


Bylaws describe the corporation’s basic managerial and legal operating principles. An Alabama corporation must keep a copy of its bylaws at its main executive office, but is not required to file them with the state. The initial bylaws must be adopted by the board of directors, unless the articles of incorporation specify that shareholders have this right. Bylaws normally address:

  • Shareholders and directors meetings
  • The authority, number, and tenure of directors
  • Voting procedures
  • The duties, responsibilities, and tenure of officers
  • How stock is issued
  • How and when annual financial information is provided to shareholders


A director must be a natural person of at least 19 years of age, but they do not have to be an Alabama resident-or even a shareholder-unless so stipulated in the articles of incorporation or the corporate bylaws. Either one of those documents may also specify a minimum and a maximum number of directors, but they are not required to be listed by name in the articles. Directors are elected annually to serve one-year terms.

The bylaws may either describe the corporation’s officer positions and duties or authorize that the board of directors make these appointments. These duties must include the responsibility for preparing minutes of meetings and for authenticating corporate records. Unless the bylaws provide otherwise, an officer may simultaneously hold more than one office in a corporation.

Requirement Reports

The Alabama Secretary of State requires that Alabama corporations file an annual report between January 1 and March 15 each year that specifies:

  • The corporation’s name and the state or country of original incorporation.
  • The address of the corporation’s registered office in the state.
  • The name of its registered agent at that office.
  • The nature of the corporation’s business.
  • The names and addresses of the corporation’s president and secretary.

An Alabama corporation is also required to send annual financial statements to all shareholders within 120 days after the end of each fiscal year.


Alabama’s corporate tax structure consists of a flat rate of 6.5% on all corporate income. Among states with corporate income taxes, Alabama’s rate ranks 30th in the nation. Alabama also assesses a business privilege tax, which is an annual tax on corporate shares based on the net worth of the corporation.

The Alabama Secretary of State recognizes subchapter S status for corporations. A “subchapter S” corporation (frequently referred to as an “S corp”) is treated as a “pass-through” entity for tax purposes in the same way as a sole proprietorship or partnership. The S corp does not file a tax return on its own behalf; instead, all tax-related data for the S corp is filed as part of the owner’s individual income tax.

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The Basics To Get You Started Preliminary company name clearance and filing of Articles of Organization.

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Commonly Asked Questions For Starting a Alabama Corporation

How is a Corporation Taxed?
Unlike many other business entities in which the profits pass through to the owners' personal tax return (e.g. LLCs, S Corporations, etc.), the C Corporation is a completely separate taxable entity. The C Corporation pays federal taxes on the net profits (after all expenses, including salaries and bonuses) of the business by filing the 1120 form with the IRS. The after tax profits can be paid out to the owners (shareholders) in the form of dividends, or retained for reinvestment of the business. The first $50,000 of net income is only federally taxed at 15% rate, and the next $25,000 is taxed at a 25% rate. Different states have different rules on how they tax corporations.
What is the Management Structure of an Corporation?
An LLC is typically managed by its members/owners (referred to as member-managed). In that respect an LLC is unlike a corporation, which has a much more rigid and defined management structure, including directors and officers. All owners of the LLC are typically referred to as members, and they can have control and voting interest proportional to their ownership interest, or in proportions different from their ownership interest; however the members agree.
Are Non-U.S. Residents Allowed to Own a Corporation or LLC?
There are no citizenship or residence requirements for ownership of a C Corporation or an LLC. The S Corporation however does not allow nonresident aliens to be shareholders (owner), but any US citizen or resident alien may be a shareholder (owner). You would, of course, require an in state street address for the state to forward official legal and tax correspondence including service of process, known as the registered agent address, but neither residency nor citizenship is required for ownership of a C Corporation or an LLC.
Can I form an Corporation with just one member?
There was a time when almost every state required the LLC to have two or more members, but that is no longer the case. This important change came in response to revised IRS regulations that clearly permitted single-member LLCs. As a result, in most states, if you plan to be the sole owner of a business and you wish to limit your personal liability, you can choose between forming a corporation or an LLC.
What is an Operating Agreement?
The operating agreement is akin to a partnership agreement for a General Partnership or Limited Liability Partnership (LLP). It is an internal contract amongst the members/owners of the LLC, and it lays out such things as ownership interest, member responsibilities, accounting method, adding or removing members, terms for concluding the LLC, etc. It is generally not required by a given state for forming an LLC (with the exception of New York), although it is certainly recommended. When dealing with private companies for financing issues (loans, mortgages, etc.) it may be required by that company. A customizable operating agreement is included with the LLC/Corp Kit.
Can another business entity be a member of an Corporation?

In the majority of states, The members of an LLC can be individuals, corporations, or other LLCs. These members of the LLC can be out of state residents or even foreign nationals. Furthermore there is no limit to the amount of members that an LLC can have.

The flexibility of an LLC in contrast to an S Corporation is stark considering the S corporations are limited to 75 shareholders who must either be United States citizens or Lawful Permanent Residents.

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