How to Incorporate a Business in Alabama
Learn how to incorporate a business in Alabama. Get the state filing fee, processing times, annual report requirements, and step-by-step formation guidance for Alabama corporations.
Bizee Editorial Staff
Editorial Team
Alabama corporation at a glance
Filing fee: $236
Processing time: 3 weeks standard; 1 business day expedited
State agency: Alabama Secretary of State, Business Services Division
Annual report due: April 15 (calendar year); 3.5 months after start of fiscal year
State tax rate: Business Privilege Tax: $100 minimum annually
How to incorporate a business in Alabama
To incorporate a business in Alabama, you file a Certificate of Formation with the Alabama Secretary of State, pay the $236 state filing fee, appoint a registered agent, and meet the state's ongoing annual report and Business Privilege Tax requirements. Standard processing takes about 3 weeks; expedited filing is available for 1 business day.
Why incorporate in Alabama
Alabama offers meaningful tax incentives for businesses that locate or expand in the state. The Alabama Enterprise Zone Program provides tax benefits to corporations, partnerships, and proprietorships that set up operations within designated Enterprise Zones — both at the state and local level.
For entrepreneurs building a larger business, a corporation gives you tools an LLC doesn't. You can issue multiple classes of stock, raise capital from investors inside and outside the U.S., and transfer ownership without restructuring the business. A corporation also provides strong liability protection — your personal assets stay separate from business debts and obligations.
That said, corporations come with more regulation than LLCs. If you're weighing the two, the right choice depends on your growth plans, how many owners are involved, and how you want to handle taxes. An LLC is often the better fit for smaller businesses that want flexibility with less administrative overhead.
How to form an Alabama corporation in 6 steps
Forming a corporation in Alabama follows a clear sequence. Each step has a specific requirement — skipping one can delay your filing or leave your business out of good standing.
Step 1 — Choose a unique business name: Your corporation's name must be distinguishable from all other registered businesses in Alabama. Run a name search through the Alabama Secretary of State's website before filing to confirm availability.
Step 2 — Provide an official business address: Every Alabama corporation needs a designated address on file. This can be a home address, a commercial office, or a virtual mailbox.
Step 3 — Appoint a registered agent: Alabama requires every corporation to maintain a registered agent — a person or entity with a physical Alabama address available during business hours to receive legal and state documents.
Step 4 — File your Certificate of Formation: File with the Alabama Secretary of State online or by mail to Business Services, P.O. Box 5616, Montgomery, Alabama 36103-5616. The filing fee is $236. Your Certificate must include the business name and type, registered agent information, names and addresses of directors, capital structure, the corporation's purpose, and the organizer's name and address.
Step 5 — Get an Employer Identification Number (EIN): An EIN is required for federal taxes, payroll, and opening a business bank account. Apply at no cost through the IRS at irs.gov/ein.
Step 6 — Write your bylaws: Bylaws govern how your corporation operates — meeting procedures, officer roles, voting rights, and more. Alabama requires corporations to adopt bylaws, though you don't file them with the state.
Alabama corporation types
Alabama recognizes several corporation types. The right structure depends on your ownership goals, tax preferences, and the nature of your business.
C Corporation: The default corporation type when you file in Alabama. C Corps can have unlimited shareholders, issue multiple stock classes, and raise capital from domestic and international investors. Income is taxed at the corporate level, and shareholders pay taxes again on dividends.
S Corporation: Not a separate entity type — it's a federal tax election you make after forming a C Corp (or LLC) by filing IRS Form 2553. S Corps pass income and losses through to shareholders, avoiding double taxation. Alabama S Corps file Form PPT with the Business Privilege Tax Return. S Corps are limited to 100 shareholders, all of whom must be U.S. citizens or residents.
Professional Corporation: Licensed professionals — including architects, attorneys, accountants, dentists, physicians, and veterinarians — may form a Professional Corporation under Alabama Code Title 34. All shareholders must hold the relevant professional license.
Foreign Corporation: If your corporation was formed in another state and you want to do business in Alabama, you need to register as a foreign corporation with the Alabama Secretary of State.
Nonprofit Corporation: Charitable and mission-driven organizations can incorporate as nonprofits in Alabama. Nonprofits may qualify for exemption from federal and state taxes, but must meet IRS and state requirements to maintain that status.
Annual report and ongoing requirements
Alabama corporations don't file a standalone annual report. Instead, the Schedule AL-CAR filed with the Business Privilege Tax Return serves as the annual report. This is one of the details that catches people off guard — missing the Business Privilege Tax deadline means missing your annual report requirement at the same time.
C Corps file Form CPT with the Business Privilege Tax Return. S Corps file Form PPT. Both are due April 15 for calendar-year filers, or 3.5 months after the start of the fiscal year for fiscal-year filers. The minimum Business Privilege Tax is $100 per year.
Frequently asked questions
To form a corporation in Alabama, choose a unique business name, appoint a registered agent with an Alabama address, and file a Certificate of Formation with the Alabama Secretary of State. The state filing fee is $236. Standard processing takes about 3 weeks; expedited processing is available for 1 business day.
After filing, get an Employer Identification Number (EIN) from the IRS and adopt corporate bylaws. You'll also need to file the Business Privilege Tax Return annually to stay in good standing.
Incorporating in Alabama means filing a Certificate of Formation with the Alabama Secretary of State and paying the $236 state fee. You'll need a unique business name, a registered agent, and the names and addresses of your directors. You can file online through the Secretary of State's portal or by mail.
A C Corp is the default corporation type in Alabama. File a Certificate of Formation with the Alabama Secretary of State and pay the $236 filing fee. Once approved, adopt bylaws, hold an organizational meeting, issue stock, and get an EIN from the IRS. C Corps file Form CPT with the annual Business Privilege Tax Return.
An S Corp isn't a separate entity type — it's a federal tax election. First, form a C Corp in Alabama by filing a Certificate of Formation and paying the $236 state fee. Then file IRS Form 2553 to elect S Corporation tax status. Alabama S Corps file Form PPT with the Business Privilege Tax Return each year.
S Corps are limited to 100 shareholders, and all shareholders must be U.S. citizens or residents. A tax professional can help you figure out whether the S Corp election makes sense for your situation.
Yes, but Alabama handles it differently than most states. Instead of a standalone annual report, Alabama corporations file Schedule AL-CAR as part of the Business Privilege Tax Return. C Corps use Form CPT; S Corps use Form PPT. The deadline is April 15 for calendar-year filers. The minimum Business Privilege Tax is $100.
Yes. Every Alabama corporation is required to maintain a registered agent — a person or business entity with a physical Alabama street address available during normal business hours. The registered agent receives legal notices, state correspondence, and service of process on behalf of your corporation.
It depends on how you want to handle taxes. A C Corp is taxed at the corporate level, and shareholders pay taxes again on dividends — that's double taxation. An S Corp passes income and losses through to shareholders' personal returns, avoiding double taxation. Both start as a C Corp in Alabama; the S Corp status comes from a federal IRS election using Form 2553.
S Corps have restrictions C Corps don't — no more than 100 shareholders, and all must be U.S. citizens or residents. A tax professional can help you figure out which structure fits your business.
