To register a business in Alabama, you file a Certificate of Formation with the Alabama Secretary of State and pay a $200 filing fee, then get a federal EIN, register with the Alabama Department of Revenue, and pick up the county (and if applicable, city) business license for wherever you actually operate. The state filing itself takes only a few days when the paperwork is in order, and most of the process can be done online.
Pick and Reserve a Business Name
Your name has to be distinguishable from every other entity already on file with the Secretary of State. Search the Secretary of State’s business entity database first. If the name is open and you’re not ready to file yet, you can hold it by submitting a Name Reservation Request online or by mail.1Alabama Secretary of State. Name Reservation Request Form Reservation isn’t mandatory before you file, but it prevents someone else from taking the name in the meantime.
The name also has to carry the right designator for your entity type. An LLC’s name must include “Limited Liability Company,” “LLC,” or “L.L.C.” A corporation needs “Corporation,” “Incorporated,” or an approved abbreviation. The Secretary of State will reject a filing that leaves this off.
One boundary worth naming: a state name reservation only blocks another Alabama filing. It gives you no trademark rights. If you plan to sell outside Alabama or build a national brand, a federal trademark through the U.S. Patent and Trademark Office is a separate step.2USPTO. How Trademarks and Trade Names Differ
Appoint a Registered Agent
Every Alabama entity must designate and continuously maintain a registered agent and a registered office in the state.3Alabama Legislature. Alabama Code 10A-1-5.31 – Designation and Maintenance of Registered Agent and Registered Office The agent is who accepts legal papers and government notices for the business. The registered office has to be a physical Alabama street address where documents can be hand-delivered. A P.O. box doesn’t qualify.
You can be your own agent, name another individual, or hire a commercial service. Commercial services generally run $100 to $300 per year. If you aren’t reliably available at a fixed Alabama address during business hours, the risk is real: a missed service of process can turn into a default judgment against your company.
File the Certificate of Formation
The core registration document is the Certificate of Formation, filed with the Alabama Secretary of State either through the online portal or by mail.4Alabama Secretary of State. Domestic Limited Liability Company Certificate of Formation LLCs and corporations both file a Certificate of Formation (corporation filings are sometimes still called Articles of Incorporation informally).
The document itself is short. It asks for:
- The full legal entity name, with the required designator.
- The registered agent’s name and Alabama street address.
- The organizer’s or incorporator’s name and mailing address.
- Duration, which is usually perpetual unless you specify an end date.
- Purpose. A broad statement works for most general businesses; professional entities such as medical practices or law firms may need to state their specific scope of services.
The filing fee is $200 for domestic LLCs, for-profit corporations, and nonprofit corporations. Limited partnerships and limited liability limited partnerships also pay $200.5Alabama Secretary of State. Fee Schedule If you file by mail, send the original plus one copy, a check or money order payable to the Secretary of State, and a self-addressed stamped envelope for the certified copy to come back.6Alabama Secretary of State. LLCs
Once the filing is processed, you get back a stamped, certified copy. That certified copy is your proof the business exists. You’ll need it to open a bank account, apply for licenses, and register to do business in other states.
Draft an Operating Agreement or Bylaws
Alabama doesn’t require you to file an operating agreement (for LLCs) or bylaws (for corporations) with the state, and skipping them is one of the more common early mistakes. These internal documents set out ownership percentages, how profits and losses are split, voting rights, and what happens when an owner leaves or the business dissolves.
Without a written operating agreement, disputes among members fall back on Alabama’s default LLC statute, which may not match what the owners actually intended. Bylaws do the same job for a corporation, covering board meetings, officer elections, and shareholder rights. Even a single-member LLC benefits: banks and potential investors will ask, and having one reinforces the legal separation between you and the business.
Get a Federal EIN
Almost every business needs a Federal Employer Identification Number from the IRS. The EIN is a nine-digit number that acts like a Social Security number for the company, and you’ll need it to hire employees, open a business bank account, and file federal taxes. The fastest route is the IRS online application, which issues the number immediately and costs nothing.7Internal Revenue Service. Get an Employer Identification Number
To use the online tool, your principal business address must be in the United States, and you’ll need the Social Security number or ITIN of the responsible party who controls the entity. The application has to be finished in one session; it times out after 15 minutes of inactivity and can’t be saved. You can apply for only one EIN per responsible party per day. Phone, fax, and mail applications are available if the online tool won’t work for you.
Register with the Alabama Department of Revenue
Once you have the EIN, register with the Alabama Department of Revenue through the My Alabama Taxes (MAT) portal.8Alabama Department of Revenue. Register an Entity This sets up the state tax accounts you’ll use for sales tax, income tax, and, if you have employees, withholding tax.
The registration asks for your legal name, street address, EIN, officer and owner information, the date the business started operating, and your NAICS code (a six-digit industry classifier). If you’re not sure which NAICS code fits, the Census Bureau publishes a searchable list. After registration, MAT is where you’ll file returns, make payments, and manage the accounts.
Alabama also levies a Business Privilege Tax on most entities doing business in the state. It’s separate from income tax, filed annually with the Department of Revenue, and calculated on net worth rather than income, which means you can owe something in a year the business doesn’t turn a profit. Confirm your filing obligations through MAT shortly after registering so you don’t miss a deadline.
Get Your County and City Business Licenses
Alabama requires a business license from the county where your business physically operates.9Alabama Legislature. Alabama Code 40-12-2 You obtain it through the County Probate Judge’s office or the county licensing official. The cost depends on the type of business and, in some counties, on projected revenue or capital investment. The license renews annually.
If you operate inside city limits, expect a separate municipal business license with its own application and fee. The county courthouse or city clerk’s office can tell you what applies at your address.
Some industries need additional federal or state permits on top of a general business license — alcohol sales, firearms dealing, food service, broadcasting, and certain transportation businesses among them. The SBA publishes a list of federally regulated industries worth checking before you spend on buildout or inventory.10U.S. Small Business Administration. Apply for Licenses and Permits
Open a Business Bank Account
Mixing personal and business money is one of the fastest ways to lose the liability protection an LLC or corporation gives you. Open a dedicated business account as soon as you have the EIN and the certified formation document in hand. Most banks will want the EIN, a copy of the Certificate of Formation, a government-issued photo ID, and the operating agreement or ownership details.11U.S. Small Business Administration. Open a Business Bank Account
Federal regulations require banks to identify the beneficial owners of a business account. Have personal identifying information ready for anyone who owns 25 percent or more of the company, along with one individual holding management control, such as a CEO or managing member.
What You Have to Keep Doing Every Year
Registering the business is not a one-time event. A few obligations recur and catch new owners off guard.
Corporations authorized to do business in Alabama are no longer required to file an annual report with the Secretary of State.12Alabama Secretary of State. Business Entities You do still have to renew the county business license each year and keep your registered agent information current with the Secretary of State. If the agent’s address changes and you don’t update it, you can miss a lawsuit and lose by default.
The Business Privilege Tax return is due annually with the Department of Revenue. Because it’s based on net worth, it can generate a bill even in a losing year, and the filing deadline and calculation depend on your entity type and fiscal year.
If you plan to hire employees, several additional obligations follow, including state unemployment insurance registration, state and federal income tax withholding, and workplace posters required by federal labor law.13U.S. Department of Labor. Workplace Posters Those are worth mapping out before your first hire rather than after.