How to Incorporate a Business in Alabama (AL)
There are three ways to incorporate your business in Alabama: hire a lawyer to do the job for you (a very expensive option), walk in to the State Department office and do it by yourself or to use a professional incorporation company, like Active Filings. Whatever method you chose, this section will provide you the basic information you need to know about AL filings.
AL Articles of Incorporation Requirements
Corporate Name Endings
The name of the corporation shall contain the word “corporation” or “incorporated” or an abbreviation. If the corporation is a banking corporation the words “bank,” “banking” or “bankers” may be used. The name may not contain language stating or implying that the corporation is organized for a purpose other than that permitted by the articles of incorporation. The name cannot be the same as or deceptively similar to the corporate name of a domestic corporation or a foreign qualified corporation.
* Minimum Number – One or more
* Residence Requirements. – None
* Age Requirements – Directors must be natural person of the age of at least nineteen of age
* Directors are not required to be listed in the articles of incorporation.
The officers are not required to be listed in the articles of incorporation.
* An increase in the amount of shares of stock does not increase fees.
AL Yearly Requirements
* Annual Statements
* Each domestic corporation and each foreign corporation authorized to transact business in Alabama must file an annual report with the Secretary of State between January 1 and March 15 accompanied by a $10 fee to the Secretary of State. The first annual report of a domestic or foreign corporation must be filed between January 1 and March 15 of the year following the year in which a domestic corporation was incorporated or a foreign corporation was authorized to transact business.
AL Tax Rate
* Annual franchise tax
* Liability. Every domestic corporation and every foreign corporation doing business in Alabama must pay $10 per $1,000 of capital stock. Minimum tax is $50. New domestic corporations organized after June 30 pay half year’s tax. Return and payment. To Department of Revenue, when organized; and thereafter by March 15 annually. Initial franchise taxes are due within 30 days after organization Penalties include not more than 25% of the tax due plus 1% a month for lateness.
* Annual registration fee (corporation permit) payable to Department of Revenue on incorporating and annually thereafter on or before March 15. Application for permit is filed when payment is made. Fee is based on capital stock paid in as follows: $25,000 or less, $10; over $25,000 to and including $50,000, $20; over $50,000 to and including $100,000, $30; over $100,000 to and including 150,000, $50; over $150,000, $100. No statutory rule covering no par shares, but in practice same as shares having par value.
* Income Tax Rate: Rate. 5% of net income
For more information on taxes, visit www.ador.state.al.us
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