Key Takeaways
- $200 Certificate of Formation filing fee (Domestic Business Corporation Certificate of Formation (filed online at sos.alabama.gov)) paid to the Alabama Secretary of State, Business Entities Division
- Minimum 1 director required (Ala. Code § 10A-2A-8.03)
- Corporate Income Tax Return (Form 20C) due within by the 15th day of the fourth month after the close of the tax year (April 15 for calendar-year filers), no separate report fee — Alabama repealed the Secretary of State corporate annual report fee; Department of Revenue late-filing and late-payment penalties plus interest on unpaid corporate income tax late penalty
- Flat 6.5% Alabama corporate income tax on Form 20C (Ala. Code § 40-18-31); the minimum Business Privilege Tax is fully exempt for tax years after December 31, 2023, when the tax due would be $100 or less
- Registered Agent with a physical Alabama street address required
- No publication requirement
- S-Corp election available via IRS Form 2553 within 75 days of formation; Alabama recognizes the federal election automatically
- Same-day filing available through LLC Attorney at no markup on state fees
Forming a corporation in Alabama means reserving your corporate name, then filing a Certificate of Formation with the Alabama Secretary of State for a $200 fee, appointing at least 1 director (Ala. Code § 10A-2A-8.03), and meeting the state's ongoing obligation — a flat 6.5% corporate income tax on Form 20C. Alabama stands out because it repealed the Secretary of State corporate annual report effective 2024 and exempts the smallest corporations from its Business Privilege Tax. This guide covers every step and cost for forming an Alabama C-Corporation, with formation available through LLC Attorney starting at $49.
C-Corp vs LLC in Alabama
Most first-time business owners in Alabama choose an LLC, and the LLC's two-agency compliance and Business Privilege Tax often make it the simpler day-to-day vehicle. A corporation earns its place when you need C-Corp structure specifically — to raise outside investment, issue stock, or set up a formal board — rather than as a default.
Choose a Alabama corporation when:
- You plan to raise venture capital or institutional investment. VC firms, angels, and most institutional investors require a C-Corp structure before they write a check. Preferred stock, convertible notes, SAFEs, and board governance by class are native to corporations, not LLCs.
- You want to issue stock options to employees (ISOs). Corporations issue stock; LLCs issue membership interests. ISO and NSO option plans are available to corporations but not to LLCs.
- You expect to eventually go public or sell to a public company. Public markets operate on corporate stock mechanics.
- You are in a regulated industry where corporate structure is required or expected by licensing boards, government contracts, or institutional counterparties.
Stick with an LLC when:
- You are a small business with one or a few owners who will not need institutional investment.
- Pass-through taxation without payroll complexity is the priority.
- You do not need stock option plans or institutional investment mechanics.
Why and when to incorporate in Delaware vs your home state
Delaware is the default for startups on a venture track. Institutional investors expect it, term sheets assume it, and the Court of Chancery resolves corporate disputes faster than any general trial court. If you are raising a priced round or structuring for QSBS eligibility, incorporate in Delaware.
If you are not raising outside capital, Alabama is usually the better choice. A Delaware corporation operating in Alabama still has to register as a foreign corporation there, pay Alabama fees, and file a Delaware franchise tax return each March 1. That is duplicate overhead with no benefit for a business that will not seek institutional investment.
What's Unique About Corporations in Alabama?
Alabama is unusual in 2026 because the state recently stripped out one of the recurring filings most other states still require: Act 2024-213 repealed the corporate annual report to the Secretary of State, effective for the 2024 filing year. Combined with a Business Privilege Tax that now fully exempts entities owing $100 or less, a small Alabama C-Corporation's only standing state obligation is the 6.5% corporate income tax on Form 20C. The trade-off is a comparatively high $200 formation fee and a mandatory name reservation before the certificate can be filed.
Key Alabama-specific requirements:
- Certificate of Formation (not "Articles of Organization" — that is the LLC filing document)
- Minimum of 1 director (Ala. Code § 10A-2A-8.03); no residency, citizenship, or shareholding requirement
- Flat 6.5% Alabama corporate income tax on Form 20C (Ala. Code § 40-18-31); the minimum Business Privilege Tax is fully exempt for tax years after December 31, 2023, when the tax due would be $100 or less
- No Secretary of State annual report after the 2024 repeal; the recurring filing is the Form 20C corporate income tax with the Department of Revenue
- Name reservation required before filing — Alabama will not accept the Certificate of Formation unless a certified name reservation is attached
Selecting a Name for Your Alabama Corporation
Your corporation's name must comply with Alabama naming requirements:
- Must include "Corporation," "Incorporated," "Inc.," "Corp.," or another Alabama-approved designator (Ala. Code § 10A-1-5.04)
- Must be distinguishable from all existing Alabama entities in the Alabama business entity records search
- An Alabama corporate name must contain the word Corporation, Incorporated, or an abbreviation such as Corp. or Inc.; unlike the LLC statute, designators tied to limited liability are not used for a business corporation
- Names implying government affiliation or banking activity are restricted
Search the Alabama business entity records search at arc-sos.state.al.us before filing. Your name search is not a reservation — the name can be registered by another filer while you prepare your Certificate of Formation.
Name reservation: file a name reservation with the Alabama Secretary of State, Business Entities Division, $28 fee, holding the name for one year. Recommended if your paperwork takes more than a few days to prepare.
Directors, Officers, and Shareholders in a Alabama Corporation
A Alabama corporation has three distinct roles:
Shareholders own the corporation. They hold stock and vote on major decisions — electing directors, approving mergers, authorizing major asset sales. Shareholders do not manage day-to-day operations.
Directors govern the corporation through a Board of Directors. They set strategic direction, authorize major transactions, and oversee management. Alabama's director requirements: Alabama requires at least 1 director (Ala. Code § 10A-2A-8.03), and the board may be a single individual or a fixed or variable range set in the certificate of formation or bylaws. Directors do not have to be Alabama residents, U.S. citizens, or shareholders, and the certificate need not name the initial directors if the incorporator appoints them in the organizational consent. The board then appoints officers, and one person may hold every officer role (Ala. Code § 10A-2A-8.40).
Officers (CEO, CFO, Secretary, etc.) manage day-to-day operations. Officers are appointed by the Board of Directors. Alabama requires officers as described in the bylaws or appointed by the board, with one individual permitted to hold every office simultaneously (Ala. Code § 10A-2A-8.40). A single person can be the sole director and hold the offices of president, secretary, and treasurer at once, which is the ordinary structure for a one-owner Alabama corporation.
Designating a Registered Agent
Every Alabama corporation must designate a Registered Agent — a person or entity with a physical Alabama street address who receives legal notices, lawsuits, and official state correspondence on behalf of your corporation.
Every Alabama corporation must continuously maintain a registered agent with a physical street address in Alabama (Ala. Code § 10A-1-5.31); a P.O. box does not satisfy the requirement, and the agent must be available at that address during normal business hours to accept service of process. The registered agent's name and Alabama address appear on the public record, so using a commercial agent keeps your home address off the searchable database at arc-sos.state.al.us.
If the Alabama Secretary of State, Business Entities Division cannot deliver legal notices to your Registered Agent, Alabama can administratively administratively dissolve your corporation. LLC Attorney's Alabama Registered Agent service is $125/year.
Alabama Corporation Costs and Compliance
How to Form a Corporation in Alabama
If You Do It Yourself
Step 1 — Choose a corporate name that complies with Alabama's requirements.
Your corporate name must be distinguishable from all existing Alabama entities and include an approved corporate designator ("Inc.," "Corp.," "Corporation," "Incorporated," or as specified in Ala. Code § 10A-1-5.04). Search the Alabama business entity records search at arc-sos.state.al.us before preparing any documents. Search Alabama's entity records at arc-sos.state.al.us first, then reserve the name — Alabama requires a certified name reservation before it will file the Certificate of Formation, which is a step most states skip.
Step 2 — Reserve your corporate name (recommended).
File a name reservation with the Alabama Secretary of State, Business Entities Division, $28 fee, good for one year. If you are not filing immediately, this prevents another entity from taking your name while you prepare documents.
Step 3 — Decide your director structure before opening the formation form.
Alabama requires 1 director at formation. Decide your board size before filing: a solo founder can be the only director and hold all officer titles, while a company expecting outside investors should set a variable-range board in the bylaws so seats can be added without amending the certificate. Alabama lets the board adjust its own size within a 30% band of the last shareholder-approved number, with larger changes reserved to shareholders. Write down your director names and Alabama addresses before you open the form — most state portals cannot save a partially completed filing.
Step 4 — Designate your Registered Agent.
Every Alabama corporation must have a Registered Agent with a physical Alabama street address. P.O. boxes are not accepted. If you do not have a staffed Alabama street address, name a commercial registered agent. LLC Attorney can serve as your Alabama Registered Agent and forward all state and legal mail to your client portal.
Step 5 — Complete the Certificate of Formation (Domestic Business Corporation Certificate of Formation (filed online at sos.alabama.gov)).
Go to sos.alabama.gov and use the current version of the Certificate of Formation. Always file directly through the Alabama Secretary of State, Business Entities Division — outdated forms are rejected without refund. Complete it with:
- Your exact corporate name including designator
- Your Registered Agent — full legal name and physical Alabama street address
- Your authorized share structure — state the total number of shares the corporation is authorized to issue (Alabama does not levy a tax on authorized shares, so the count is a governance decision, not a tax trigger)
- Director names and addresses
- Incorporator signature (the person submitting the form; need not be a director or shareholder)
- The number of authorized shares and any share classes, the incorporator's name and signature, and a certified name reservation, which Alabama requires before the Certificate of Formation can be accepted
Step 6 — File the Certificate of Formation and pay the $200 fee.
File online at sos.alabama.gov or by mail to the Alabama Secretary of State, Business Entities Division in Montgomery. Online processing is about 3 to 5 business days when filed online, or 2 to 3 weeks by mail under normal volume.
- 24-hour service: $100 additional (total: $300)
- Alabama offers a single expedite option — a flat $100 add-on for priority handling — rather than the multi-tier same-day and hourly menus some states publish.
Step 7 — Wait for your approved Certificate of Formation.
Your corporation does not legally exist during the review period. You cannot open bank accounts, sign contracts as the corporation, or issue stock until the Alabama Secretary of State, Business Entities Division approves your filing. Standard processing is about 3 to 5 business days when filed online, or 2 to 3 weeks by mail; longer than usual at the start of the year and during high-volume filing windows, when mailed certificates can stretch past three weeks during peak filing season. Keep your approved Certificate of Formation — every bank, licensing board, and counterparty will request it.
Step 8 — Hold your organizational meeting and adopt bylaws.
After approval, your Board of Directors must hold an organizational meeting (or sign a written consent in lieu of meeting) to adopt bylaws, elect officers, authorize the bank account, authorize stock issuance, and set the fiscal year. Alabama does not require bylaws to be filed with the Secretary of State — keep them with your corporate records. Alabama bylaws are adopted by the incorporator or the initial board and operate under the Alabama Business Corporation Law (Ala. Code Title 10A, Chapter 2A); they are kept internally and never filed with the Secretary of State, so they are the document that actually governs how your board and officers function. A generic template may omit Alabama-specific provisions and may not align with your share structure.
Step 9 — Issue stock to founders.
Authorize and issue shares to founders immediately after your organizational meeting. Document the issuance in your stock ledger and issue stock certificates (or maintain uncertificated share records). Each founder's share count and issuance price must be documented. Because Alabama charges a flat $200 to form and never taxes authorized shares, you can authorize a generous block — many founders authorize 1,000,000 shares of common stock and issue only a fraction — without the franchise-tax penalty that high share counts create in states like Delaware. Authorize enough room for an option pool and future investors up front so you do not have to amend later.
Step 10 — File your initial Corporate Income Tax Return (Form 20C) within by the 15th day of the fourth month after the close of the tax year (April 15 for calendar-year filers).
After your Certificate of Formation is approved, you have by the 15th day of the fourth month after the close of the tax year (April 15 for calendar-year filers) to file Form 20C with the Alabama Secretary of State, Business Entities Division. This filing confirms your Registered Agent address, principal office address, and director and officer contact information. Filing fee: no separate report fee — Alabama repealed the Secretary of State corporate annual report. Missing the deadline triggers a Department of Revenue late-filing and late-payment penalties plus interest on unpaid corporate income tax penalty.
Step 11 — Apply for your federal EIN.
Your corporation needs an EIN to open a bank account, hire employees, and handle tax filings. Apply at irs.gov/ein. Free, no government filing fee. Available Monday through Friday, 7 a.m. to 10 p.m. Eastern. 15-minute inactivity timeout — have all information ready before starting. International incorporators without a U.S. SSN or ITIN must apply by phone (IRS Form SS-4, 267-941-1099).
Step 12 — Open a corporate bank account.
Required documents: your approved Certificate of Formation, your EIN confirmation letter (IRS Form CP 575 or SS-4 approval), your adopted bylaws, a board resolution authorizing the account, and personal ID of authorized signers. Call ahead — bank requirements for corporations are more involved than for LLCs.
Step 13 — Register for Alabama state taxes.
Your federal EIN does not automatically register you with Alabama state agencies. Depending on your business type:
- Alabama sales and use tax (Alabama Department of Revenue, if you sell taxable goods or services) — revenue.alabama.gov
- Alabama employer payroll taxes (Alabama Department of Labor, if hiring Alabama employees) — labor.alabama.gov
- Alabama sales and use tax (My Alabama Taxes) if selling taxable goods or services; Business Privilege Tax only if the computed tax exceeds the $100 minimum-exemption threshold
Step 14 — Pay your Alabama annual tax.
Alabama has no franchise tax for corporations to calculate. The corporation's recurring state payment is the 6.5% corporate income tax, reported on Form 20C and due the 15th day of the fourth month after the tax year closes (April 15 for calendar-year filers). The Business Privilege Tax that previously applied is, for tax years beginning after December 31, 2023, fully exempt when the computed tax would be $100 or less, so most newly formed corporations file no privilege tax return at all. Pay any corporate income tax online through My Alabama Taxes (MAT) at the Department of Revenue.
Step 15 — Decide whether to elect S-Corp tax treatment.
C-Corporation income is taxed twice: once at the corporate level (federal rate currently 21%), and again when distributed to shareholders as dividends. An S-Corp election converts the corporation to pass-through taxation. S-Corp election is available for Alabama corporations that meet IRS eligibility: 100 or fewer shareholders, all U.S. citizens or residents, only one class of stock, and no institutional or foreign shareholders. File IRS Form 2553 within 75 days of formation. The election is made with the IRS — it does not require any Alabama filing. Alabama recognizes the federal S-Corporation election automatically — there is no separate state-level S election to file. An Alabama S-Corporation reports on Form 20S instead of Form 20C, and income generally passes through to shareholders, who pay Alabama individual income tax at graduated rates of 2% to 5% on their shares. Alabama also offers an Electing Pass-Through Entity option (Form EPT) that lets the S-Corp pay Alabama tax at the entity level, which can help shareholders work around the federal cap on state-and-local-tax deductions.
Step 16 — Set annual compliance reminders.
Alabama corporations must file and pay on a recurring basis:
- Corporate Income Tax Return (Form 20C): Annually with the state corporate income tax return, no separate report fee — Alabama repealed the Secretary of State corporate annual report fee — Department of Revenue late-filing and late-payment penalties plus interest on unpaid corporate income tax if missed
- Corporate income tax (Form 20C): flat 6.5% on Alabama-apportioned net income, due the 15th day of the fourth month after year-end — there is no longer a Secretary of State annual report to file
- File Form 20C corporate income tax with the Department of Revenue each year — the repeal of the SOS annual report does not eliminate the income tax return
Missing these filings puts your corporation in bad standing with the Alabama Secretary of State, Business Entities Division and Alabama Department of Revenue. Suspension means you cannot file documents, defend lawsuits, or do business in Alabama. If you would rather not manage this process, the service handles Alabama corporation formation starting at $49.
If LLC Attorney Does It for You
- Submit your information at llcattorney.com — corporate name, director structure, authorized shares, Registered Agent preference, fiscal year, and target formation date. No forms to find or download.
- LLC Attorney files your Certificate of Formation with the Alabama Secretary of State, Business Entities Division, drafts your bylaws, handles your organizational meeting consent, issues your stock ledger documentation, applies for your EIN, and covers same-day filing if needed. Your Registered Agent designation and initial Corporate Income Tax Return are included.
- Receive your approved Certificate of Formation, bylaws, organizational consent, stock documentation, and EIN confirmation through your LLC Attorney client portal. Annual compliance reminders are included so you never miss a Form 20C deadline or annual tax payment.
S-Corp Election for Alabama Corporations — What You Need to Know
An S-Corp election is not a separate entity — it is a federal tax election made by an existing corporation. Your Alabama corporation remains a Alabama corporation; you are only changing how the IRS taxes it.
The S-Corp tax advantage: a C-Corp pays 21% federal corporate income tax on net income, and shareholders pay income tax again on dividends. An S-Corp passes income directly to shareholders' personal returns, skipping the corporate-level tax. For owner-operated businesses with consistent profitability above roughly $40,000/year, the S-Corp election typically produces material tax savings.
S-Corp payroll requirement: if you elect S-Corp status and work in the business, you must pay yourself a "reasonable salary" subject to payroll taxes. The savings come from income above that salary, which passes through without payroll tax. Skip the salary and the IRS can reclassify your distributions as wages and assess back payroll taxes plus penalties.
Eligibility requirements:
- 100 or fewer shareholders
- All shareholders must be U.S. citizens or permanent residents
- Only one class of stock (identical distribution and liquidation rights)
- No institutional shareholders, partnerships, or non-resident alien shareholders
Alabama treatment of S-Corps: Alabama recognizes the federal S-Corporation election automatically — there is no separate state-level S election to file. An Alabama S-Corporation reports on Form 20S instead of Form 20C, and income generally passes through to shareholders, who pay Alabama individual income tax at graduated rates of 2% to 5% on their shares. Alabama also offers an Electing Pass-Through Entity option (Form EPT) that lets the S-Corp pay Alabama tax at the entity level, which can help shareholders work around the federal cap on state-and-local-tax deductions.
Filing deadline: IRS Form 2553 must be filed within 75 days of formation, or by March 15 of the tax year for which you want the election effective. Late elections are sometimes accepted with a written explanation of reasonable cause.
When Should You Consult an Attorney for Your Alabama Corporation?
LLC Attorney provides on-demand attorney consultations for a flat rate per 30-minute session — no retainer required. Corporation formation benefits from attorney guidance more than most entity types because of share structure, bylaw complexity, and S-Corp election timing. Common scenarios:
- Multiple founders or investors: share structure decisions made at formation (authorized shares, classes, par value) affect every future financing round and exit. A misstructured cap table is expensive to unwind.
- S-Corp election analysis: whether to elect depends on projected net income, payroll requirements, and state-level S-Corp recognition. The payroll requirement catches founders off guard.
- High-liability industry: regulated industries may have specific corporate structure requirements from licensing boards or insurance carriers.
- Raising capital: if you plan to raise institutional capital, your share structure, option pool, and Delaware vs. home-state decision should be reviewed before you file.
- Alabama-specific wrinkles: Alabama may have corporate law provisions a generic national template does not cover correctly.
What You Actually Get When You Incorporate in Alabama with LLC Attorney
An Alabama corporation that has only been filed with the state is not a finished corporation. Alabama actually requires a name reservation before it will accept the certificate, and the state filing itself does not produce the bylaws, board consents, or stock ledger that make the corporation operate and hold its liability shield. A "$0 filing" that skips the reservation and the governance documents is not free — it is unfinished, and an unfinished corporation is what fails a bank account opening or an investor's review.
Included with LLC Attorney corporation formation, starting at $200:
- Same-day or 24-hour Alabama filing at no markup on the state fee. Most services charge extra to expedite.
- Attorney-drafted bylaws, initial board consent, and organizational minutes — customized, not auto-generated templates.
- Initial stock issuance and cap-table setup, so your ownership is documented correctly from day one.
- Federal EIN, obtained for you.
- Alabama Registered Agent service at $125/year, included to keep you in good standing.
- S-Corp election guidance when pass-through tax treatment is the right call for your situation.
- Access to attorney-trained Business Success Advisors at no charge, plus optional flat-fee attorney consultations (no retainer).
Because Alabama charges $200 up front and requires a name reservation before it will even accept the certificate, the documents that make the corporation real — bylaws, organizational consents, the stock ledger, and a completed name reservation — are exactly what is bundled here.
Starting Your Alabama Corporation with LLC Attorney
Alabama's corporate formation requirements are simpler than most states but have a few traps — the mandatory pre-filing name reservation, the flat 6.5% corporate income tax, and the recent repeal of the Secretary of State annual report. Getting your directors, share structure, bylaws, and initial compliance filings right at formation prevents expensive corrections later.
The service handles Alabama corporation formation starting at $49. Same-day filing is available at no markup on state fees. On-demand attorney consultations in 30-minute increments — no retainer — cover bylaws drafting, S-Corp election analysis, Alabama share-structure planning and the Electing Pass-Through Entity decision, and annual tax planning. See our full pricing for all service tiers.
Frequently Asked Questions
Alabama corporate Certificate of Formation filings submitted online at sos.alabama.gov typically process in about 3 to 5 business days; mailed filings take 2 to 3 weeks. Alabama offers a single expedite option — a flat $100 add-on for priority handling — rather than tiered same-day or hourly service. LLC Attorney can file your formation and handle the required name reservation so the documents are accepted on the first pass.
A C-Corp and an S-Corp are the same Alabama corporation — the difference is federal tax treatment only. A C-Corp pays corporate income tax at the entity level (21% federal rate), and shareholders pay personal income tax again on dividends. An S-Corp elects pass-through taxation — income flows to shareholders' personal returns without corporate-level tax. The election is made with the IRS via Form 2553 and has no impact on your Alabama formation documents. Alabama follows the federal S election, so a qualifying Alabama corporation files Form 20S and may also consider the Electing Pass-Through Entity option.
Yes. Alabama law lets one individual form and run a corporation, serving as the sole director and holding every officer position at the same time (Ala. Code § 10A-2A-8.40). This is the standard setup for a single-owner Alabama corporation. You still need to follow corporate formalities — adopt bylaws, sign an organizational consent, issue yourself stock, and keep corporate and personal money separate — to keep the liability shield intact.
An Alabama C-Corporation pays a flat 6.5% Alabama corporate income tax on the portion of net income apportioned to Alabama, reported on Form 20C and due the 15th day of the fourth month after the tax year ends. Alabama's Business Privilege Tax no longer reaches most small corporations — for tax years beginning after December 31, 2023, entities whose privilege tax would be $100 or less are completely exempt from the tax and the return. There is also no Secretary of State annual report fee, because that filing was repealed for 2024. At the federal level, a C-Corp pays the 21% corporate income tax unless it elects S-Corp treatment.
Alabama no longer requires corporations to file a separate annual report with the Secretary of State — Act 2024-213 repealed that requirement effective for the 2024 filing year, so there is no recurring Secretary of State report fee. Your standing corporate obligation is the Alabama corporate income tax return (Form 20C), filed with the Department of Revenue by the 15th day of the fourth month after your tax year closes (April 15 for calendar-year corporations). Keeping a registered agent on file and filing Form 20C on time is what now keeps the corporation in good standing.
Alabama does not require corporations to file bylaws with the Secretary of State. However, bylaws are a legal requirement for corporate governance — they define how your board operates, how shareholder meetings work, how officers are appointed, and how major decisions are made. A corporation without bylaws is technically non-compliant and lacks the foundational document that governs all major corporate decisions. Every bank, investor, and serious counterparty will request your bylaws.
Because Alabama repealed the Secretary of State corporate annual report and exempts the smallest corporations from the Business Privilege Tax, the late-filing risk centers on the corporate income tax. Filing Form 20C late or paying the 6.5% tax late triggers Department of Revenue late-filing and late-payment penalties plus interest on the balance due. Letting the corporate income tax account go unaddressed can lead to assessments and collection action, so calendar the return deadline even though there is no longer a separate SOS report to track.
Yes. Alabama permits a corporation to convert to an LLC by filing a statement of conversion together with the new entity's Certificate of Formation with the Secretary of State (Ala. Code § 10A-1-8.01 et seq.). The conversion is a taxable event for federal purposes and can trigger gain recognition, so model the tax consequences with a CPA before converting — depending on assets and basis, dissolving and re-forming is sometimes cleaner.
If Alabama is unable to deliver legal notices to your Registered Agent, the state can administratively administratively dissolve your corporation. This can happen without direct notice to you. A professional Registered Agent service ensures a qualified person is available during business hours at a physical Alabama address to receive any legal documents on your behalf.