With our 5-step process, forming a company in Alabama is simple. A company may be formed by submitting formation paperwork with your state and forming a board of directors.
We’ll teach you how to form your own company in Alabama.
In Alabama, it is simple to form a corporation.
In Alabama, you may form a company by submitting the Certificate of Incorporation, drafting corporate bylaws, and naming your first director (s).
To get started, follow the steps in our How to Start a Corporation in Alabama tutorial below:
Step 1: Give Your Alabama Corporation a Name
Step 2: Select a Registered Agent.
Step 3 Hold an Organizational Meeting
Step 4: Submit your Certificate of Incorporation.
Step 5: Obtain an EIN
Step 1: Give Your Alabama Corporation a Name
The first step in forming a company is to choose a business name. You must choose a distinct name that conforms with Alabama company naming regulations.
1. Alabama naming conventions:
Before registering your company, you MUST reserve its name online or via mail. Corporations registering by mail must reserve their name two weeks in advance. Names may be reserved at the time of registration if submitting online.
The words “corporation,” “incorporated,” or an acronym of one of these keywords must appear in your name. Nonprofit businesses, banks, trust companies, savings and loan organisations, and insurance firms are exceptions.
Any name linked to banking requires a letter from the Alabama Banking Commissioner’s Office, and any name related to insurance requires a letter from the Alabama Insurance Commissioner’s Office.
Any name that includes a professional designation (e.g., engineering, attorney) needs a copy of one officer’s or member’s licence or a letter from the governing agency approving the use of the name without licencing.
Your name must be distinct from any other name on file with the Secretary of State (words or abbreviations indicating the type of company such as LLC, Inc., etc. are not taken into account when determining distinguishability).
Your company’s name cannot include terms that may be confused with a government organisation (FBI, Treasury, State Department, etc.).
Your name cannot include any terms that suggest or imply that the company is doing a business that is not permitted by law.
2. Is my business name accessible in Alabama?
Your Alabama company name must be distinct and distinct from existing Alabama business names. To see whether your selected company name is available, use the Alabama Secretary of State’s Business Entity Search Portal.
Visit our How to Name a Business guide and pick Alabama from the drop-down box for additional information on Alabama corporation name searches.
3. Name Reservation Form for Alabama
Depending on how you file, you must complete the Name Reservation Request Form for Domestic Entities before or at the time of registration. This may be done via the Alabama Secretary of State’s website or by mail. For postal requests, the filing cost is $25, $27 for online subscribers, and $28 for online non-subscribers.
Corporations formed online may reserve their name at the time of registration, but corporations formed by mail must reserve their name at least two weeks in advance.
4. Is the URL accessible?
Before you register your Alabama company, check to see whether an appropriate URL for your selected business name is accessible. Even if you don’t intend to create a company website right immediately, we recommend purchasing a web domain right away to avoid other companies from obtaining it.
Step 2: Select a Registered Agent in Alabama.
When you file your company with the Secretary of State, you must choose an Alabama registered agent.
What exactly is a Registered Agent? A registered agent is a person or organisation chosen by an LLC or corporation to accept service of process, government communications, and compliance paperwork on behalf of a company.
Who Is Eligible to Be a Registered Agent? An person, a corporate organisation, or a professional registered agent service may serve as your registered agent. Any organisation or individual may act as your Alabama registered agent as long as the person:
is at least 18 years old
has a physical address in the state where business is done
is accessible during regular business hours (in person).
Step 3 Hold an Organizational Meeting
Before filing the Certificate of Incorporation formally in Step 4, you must conduct an organisational meeting to perform the following tasks:
Complete and sign the Certificate of Incorporation.
Establish and approve bylaws
Choose your first director (s)
Determine your ownership structure.
Fill out an Incorporator’s Statement.
Establish and Approve Corporate Bylaws
Bylaws are the rules that regulate and control how your organisation is governed and operated. Consider the bylaws to be your corporation’s constitution. It clarifies the norms and priorities for all parties involved.
The bylaws of a company will augment any regulations established by the federal government or the state.
Include the following in your bylaws:
The governance of the company, including the roles of directors and officials
Meeting procedures, voting procedures, and the election of officers or directors
How will records be kept and managed?
How will disagreements be resolved?
How will bylaws be added/modified in the future?
The annual shareholder meeting date
Contract Negotiation Techniques
Fiduciary responsibilities to the company (i.e. acting in the best interests of the corporation)
What is a quorum for voting purposes?
Appoint the First Directors
At least one director must be appointed to monitor your Alabama company until the first shareholder meeting.
A corporate director is in charge of operational bylaw adoption, modification, and repeal, as well as the election, monitoring, and removal of officers.
Following the incorporation of the company, the incorporator(s) — or initial director(s), if listed on the formation papers — shall convene an organisational meeting. During this inaugural meeting, either the incorporator(s) or the initial director(s) will elect the board of directors.
Selecting a Share Structure and Strategy
A share of stock is a corporation’s unit of ownership. Each share of stock reflects a proportion of the company’s ownership. If a business issues one share of stock, the shareholder (stock owner) owns 100% of the corporation.
Shares may be divided into classes. Each class, known as a share class, has unique rights and advantages. There may be several classes, and each class can have an unlimited number of shares.
The basic Certificate of Incorporation form for companies in Alabama only allows for the listing of one share class. If your company has more than one stock class, you may attach that paperwork separately and tick the box on the Certificate of Incorporation that says there is extra information attached.
Make and implement an Incorporator’s Statement
The incorporator(s) shall sign and preserve an Incorporator’s Statement with the full names and addresses of all initial directors in the corporate records book.
This document identifies the first director(s) who will serve until the board of directors is chosen at the first shareholder meeting. It should be kept with the rest of your company’s records.
Step 4: Fill up and submit the Alabama Certificate of Incorporation.
To establish a company in Alabama, you must submit the Alabama Certificate of Incorporation. The Certificate of Incorporation is the document that legally establishes your Alabama company, and you may submit it with the Secretary of State either online or by mail. The fee for filing is $200.
This paper will address the fundamentals of your company, such as:
Name of the company and its primary address
Name and street address of the corporate service agent
The number of authorised shares that a company may issue.
The basic Certificate of Incorporation form for companies in Alabama only allows for the listing of one share class. If your company has more than one stock class, you may attach that paperwork separately and tick the box on the Certificate of Incorporation that says there is extra information attached.
Step 5 Get an EIN for Your Alabama Corporation
What exactly is an EIN? The federal government uses an Employer Identification Number (EIN) or Federal Tax Identification Number (FTIN) to identify a company organisation. It is effectively the company’s social security number.
Why do I need an EIN? An EIN is necessary for the following activities:
To establish a commercial bank account for the firm
In terms of federal and state taxation
To recruit workers for the firm
How can I get an EIN? After founding the firm, the business owner obtains an EIN from the IRS (free of charge). This may be done online or in the mail.