How to Start a C-Corp in Alabama (Quick Answer)
To start a C-corp in Alabama, reserve your corporate name, then file a Certificate of Formation with the Alabama Secretary of State and name a registered agent. The name reservation and the $200 filing fee together run about $228. Once the state accepts it, your corporation legally exists.
After that, you adopt bylaws, appoint directors and officers, issue stock, and get an EIN from the IRS. Alabama is lighter than older guides suggest: the state dropped its annual report in 2024 and phased out the minimum Business Privilege Tax.
| Filing document | Certificate of Formation (name reservation required first) |
| Where to file | Alabama Secretary of State |
| Filing fee | $200, plus a required name reservation (about $28), so roughly $228 to start |
| Registered agent | Required, with a physical Alabama street address |
| EIN | Required, free from the IRS (Form SS-4 by phone, fax, or mail if you have no SSN or ITIN) |
| Annual report | None; Alabama eliminated the Secretary of State annual report in 2024 |
| Business Privilege Tax | Filed with the Department of Revenue by April 15; the minimum was phased out, so a corporation owing $100 or less now pays $0 |
| Corporate income tax | Flat 6.5% on Alabama net income |
| Foreign owner (25% or more) | File Form 5472 with Form 1120 every year, or face a $25,000 minimum penalty |
First-year cost: about $228 to start, the $200 Certificate of Formation plus the required name reservation, plus a registered-agent service if you use one, commonly $50 to $150 a year.
Two recent changes make Alabama lighter than many guides still say. The state eliminated its Secretary of State annual report in 2024, and it phased out the minimum Business Privilege Tax, so a small corporation that would owe $100 or less now pays $0.
One quirk remains: Alabama makes you reserve your corporate name before you can file the Certificate of Formation, which is a required step rather than an optional one.
TL;DR
- Alabama got lighter: the annual report was eliminated in 2024 and the minimum Business Privilege Tax was phased out, but you must reserve your name before filing.
- Step 1, name: reserve your corporate name with the Secretary of State; in Alabama this is required before you file.
- Step 2, registered agent: name one with a physical Alabama street address.
- Step 3, Certificate of Formation: file with the Secretary of State for $200 (about $228 with the name reservation).
- Step 4, bylaws: adopt internal bylaws and keep them with your records.
- Step 5, directors and officers: appoint the board and officers and hold an organizational meeting.
- Step 6, issue stock: authorize and issue shares, keep a stock ledger, and file the 83(b) election within 30 days if your shares vest.
- Step 7, EIN: get a free EIN from the IRS, by Form SS-4 if you have no SSN or ITIN.
- Foreign owner (25% or more): file Form 5472 with Form 1120 every year, or risk a $25,000 penalty.
- Ongoing: no annual report, a Business Privilege Tax by April 15 (small corporations often owe $0), and the flat 6.5% corporate income tax.
Why Form a C-Corp in Alabama?
Alabama offers low ongoing requirements, growing metro markets, and a strong manufacturing and aerospace base.
- No Secretary of State annual report since 2024, and a phased-out minimum Business Privilege Tax.
- A strong manufacturing and aerospace sector around Huntsville, Birmingham, and Mobile.
- Online filing through the Secretary of State.
If you plan to raise venture capital, investors will most likely want a Delaware C-corp. If you will run the business in Alabama and not raise venture money, forming in Alabama avoids registering and paying in two states.
Step 1: Reserve Your Corporate Name
Alabama is unusual: you must reserve your corporate name before you can file the Certificate of Formation. It is a required step, not an optional hold.
- Include a corporate designator such as "Inc.", "Incorporated", "Corporation", or "Corp."
- Reserve the name through the Secretary of State, for about $28.
- You need the reservation in hand before the Certificate of Formation will be accepted.
Step 2: Appoint an Alabama Registered Agent
Every Alabama corporation must name a registered agent with a physical Alabama street address, available during business hours to receive legal and state documents.
- The agent can be a person or a company, but needs a real Alabama address, not a PO box.
- The address is public record, so many owners use a commercial service.
- A commercial agent commonly costs $50 to $150 a year.
Step 3: File Your Certificate of Formation
The Certificate of Formation is the filing that legally creates your corporation. You file it with the Alabama Secretary of State, along with your name reservation.
- It lists the corporate name, registered agent, and the number of shares the corporation is authorized to issue.
- The state fee is $200, so with the required name reservation you are looking at about $228 to start.
- Once the state accepts it, your corporation exists.
Step 4: Adopt Corporate Bylaws
Bylaws are the internal rulebook for how the corporation is run. They are not filed with the state, but a corporation is expected to have them, and banks and investors often ask to see them.
- They set out how directors and officers are elected, how meetings and votes work, and how shares are handled.
- They stay with your records, not with the Secretary of State.
- Skipping them can weaken the separation between you and the corporation that liability protection depends on.
Step 5: Appoint Directors and Hold the Organizational Meeting
A corporation is run by a board of directors, who appoint the officers that handle day-to-day work. Right after formation, the incorporator or initial directors hold an organizational meeting, or sign a written consent in place of one.
- Appoint the initial board and elect officers (usually at least a president, secretary, and treasurer; one person can hold several roles).
- Adopt the bylaws and authorize the issuance of stock.
- Keep signed minutes or the written consent with your records.
Step 6: Authorize and Issue Stock
Issuing stock is how founders get their ownership, and it is easy to rush. The board authorizes shares, then the corporation issues them to the founders and any early shareholders.
- Issue shares to each founder and record what they paid (cash, property, or services).
- Keep a stock ledger, a running record of who owns how many shares.
- Deliver stock certificates or record the issuance electronically, per your bylaws.
The 83(b) election, and its 30-day deadline: if your founder shares vest over time, you generally have 30 days from the grant date to file an 83(b) election with the IRS.
It lets you be taxed on the small value at grant instead of the higher value as the stock vests. The 30-day window cannot be extended, and missing it can be expensive.
Step 7: Get an EIN, Even Without an SSN
An EIN is your corporation's federal tax ID, needed to file taxes, run payroll, and open a bank account. It is free from the IRS.
- With an SSN or ITIN, apply online and get the EIN in minutes.
- Without an SSN or ITIN, apply on Form SS-4 by phone, fax, or mail.
- The EIN is always free; you never pay the IRS for one.
Open a US Business Bank Account
Once you have the EIN, open a dedicated business bank account before money moves through the corporation.
- Keeping corporate and personal funds separate helps protect the liability shield; commingling them is a common reason courts pierce it.
- Banks usually ask for the filed Certificate of Formation, the EIN letter, and often the bylaws or a board resolution.
- A separate account also makes bookkeeping and the corporate tax return simpler.
If Your Alabama C-Corp Is Foreign-Owned
An Alabama C-corp that is 25% or more owned by a non-US person has an extra federal filing that many international founders miss.
- The corporation files Form 5472 with its annual Form 1120 to report transactions with the foreign owner, such as money put in or paid out for services.
- It is required every year there are reportable transactions, even with little or no profit.
- The penalty is steep: a missed or late Form 5472 starts at $25,000 per form, per year.
Handle Alabama's Ongoing Compliance
Alabama's ongoing load dropped in 2024. There is no annual report, so the main items are the Business Privilege Tax and the corporate income tax.
No Annual Report, and a Phased-Out Minimum Tax
- Alabama eliminated the Secretary of State annual report in 2024, so there is no yearly report or fee for it.
- The Business Privilege Tax is filed with the Department of Revenue by April 15, based on net worth.
- The minimum was phased out, so a corporation that would owe $100 or less now pays $0. Confirm the current threshold before you file.
Alabama Corporate Income Tax (6.5%)
- Alabama charges a flat 6.5% corporate income tax on Alabama net income.
- It is filed with the Department of Revenue, separate from the federal Form 1120.
- Federally, the corporation files Form 1120 and pays 21% corporate tax, due the 15th day of the 4th month after year-end.
How Much Does It Cost to Start a C-Corp in Alabama?
| What you pay | Amount | When |
|---|---|---|
| Name reservation | About $28 | One time, before filing |
| Certificate of Formation | $200 | One time, at formation |
| Registered-agent service (optional) | ~$50 to $150 a year | Yearly, if you use one |
| Business Privilege Tax | Often $0 for small corporations; graduated on net worth above that | Yearly, by April 15 |
| Alabama corporate income tax | Flat 6.5% of Alabama net income | Yearly |
| Federal corporate tax | 21% of profits | Yearly, with Form 1120 |
How Long Does It Take to Start a C-Corp in Alabama?
- Online filings with the Secretary of State are usually processed within a few business days, after the name reservation clears.
- The EIN follows: minutes online with an SSN or ITIN, or same day to several weeks by Form SS-4 without one.
- Bylaws, the organizational meeting, and issuing stock happen right after the state approves the filing.
Common Mistakes to Avoid
- Skipping the name reservation. Alabama requires it before the Certificate of Formation, unlike most states.
- Assuming there is still an annual report. Alabama dropped it in 2024, but the Business Privilege Tax filing remains.
- Missing the 30-day 83(b) deadline on vesting founder stock.
- Overlooking Form 5472 if the corporation is 25% or more foreign-owned.
- Using a PO box for the registered agent, which Alabama does not accept.
How FinStackk Helps
FinStackk is an accounting and tax compliance platform for U.S. businesses, taking you from incorporation through ongoing accounting, tax, and compliance in one place.
We handle Alabama C-corp formation, from the name reservation and Certificate of Formation to the EIN, through Fin-Start, including the Alabama registered agent.
Once the corporation exists, Fin-Tax keeps the federal Form 1120 deadline, the Business Privilege Tax, and the 6.5% Alabama corporate income tax on a proactive calendar. Complyy keeps your registered agent and state registrations current. Book a free demo to see them in action.
FAQ
Does Alabama still require an annual report?
No. Alabama eliminated the Secretary of State annual report in 2024, so corporations no longer file one or pay its fee. The Business Privilege Tax return, filed with the Department of Revenue by April 15, remains, but its minimum was phased out, so small corporations owing $100 or less now pay $0.
How much does it cost to start a C-corp in Alabama?
About $228 to start: a $200 Certificate of Formation plus the required name reservation of about $28. Add a registered-agent service if you use one. Ongoing, there is no annual report, and small corporations often owe $0 in Business Privilege Tax, so the main state cost is the 6.5% corporate income tax on profit.
Why do I have to reserve a name before filing in Alabama?
Alabama requires the name reservation as a step before the Certificate of Formation, unlike most states where reserving a name is optional. You secure the name with the Secretary of State first, then file the Certificate with the reservation. Budget the extra fee and the short wait for the reservation to clear.
Is it better to form a C-corp or an LLC in Alabama?
Both Alabama corporations and LLCs benefit from the dropped annual report and phased-out minimum Business Privilege Tax. An LLC is simpler and taxed once, while a C-corp suits founders who plan to raise venture capital or keep earnings in the business. A C-corp is taxed twice, once at the corporate level and again on dividends.
Should I form my C-corp in Alabama or Delaware?
If you plan to raise venture capital, Delaware is what investors expect. If you will operate in Alabama and not raise venture money, forming in Alabama avoids registering and paying in two states, since a Delaware corporation doing business in Alabama still has to register and pay here. Choose based on where you operate and whether you will raise money.
Can a non-US resident start an Alabama C-corp?
Yes. Alabama sets no citizenship or residency requirement to own a corporation. You will need an Alabama registered agent and an EIN, which you apply for on Form SS-4 by phone, fax, or mail without an SSN.
If a non-US person owns 25% or more, the corporation also files Form 5472 with its Form 1120 every year, with a $25,000 minimum penalty for missing it.