Moving Your LLC or Corporation to Alabama

Introduction – Why Alabama?

Whatever the reason for relocating a business to Alabama; the state definitely provides several benefits to each new and existing business. This state is considered amongst the ‘most favorable for business’ destinations in the entire southeastern region of the United States. As an entrepreneur, your business requirements would be different from that of others and this is where the state plays a key role in ensuring proper support and resources are made accessible to business owners. A diverse industry base along with robust logistics and infrastructure are just some of the business benefits in Alabama. Let us look in detail at some of the advantages your business can leverage in this state.

Excellent workforce

When moving your business to Alabama, one of the key factors to consider is availability of a skilled workforce. According to the 2023 Regional Workforce Development Rankings, Alabama has been ranked #1 (number one) in the South Central region of the USA as it is considered to possess the strongest overall workforce development ecosystem in this region. The Alabama Workforce Development Board has approved and introduced skills training programs amounting to more than $33 million so that Alabamians are able to advance their careers and this is one of the top business benefits in Alabama. Now, businesses will have access to a highly skilled and motivated workforce. There are programs by MAWA (The Mobile Area Workforce Alliance) where educational institutions as well as business entities come together on the same platform for aligning classroom learning with industry best practices and thus providing meaningful solutions to practical industry needs.

Thriving Business climate

Alabama is a strong contender in the southeastern region of the USA where a thriving business climate is concerned. In recent times, migration of businesses into Alabama has increased and this has led to the state investing heavily in creating a strong infrastructure network for supporting sustained economic growth. This is one of the key business benefits in Alabama as infrastructure plays an important role in providing the right environment as required by new and existing companies. One of the factors promoting this pro-business climate is the different industrial and business zones in the state. Relocating a business to Alabama in an opportunity zone, Foreign-Trade Zone (FTZ), or designated Enterprise Zones can provide different degrees of support, resources, and benefits. Alabama’s startup ecosystem seems to be coming of age as it has become broader with support through tech innovation. Today, the state is home to a diverse and innovation oriented entrepreneurial ecosystem replete with accelerators and incubators.

Competitive Taxes & Incentives

If you plan on moving your business to Alabama then one of the salient highlights is the attractive and competitive taxation environment the state offers. The state is popular amongst entrepreneurs as it is known to have one of the lowest overall tax burdens in the nation. In addition, the state also provides a variety of tax incentive programs that have been carefully designed to provide continued operational savings and make starting a new business cost-effective. The small business incentive programs are one of the principal elements in driving overall business growth and development and include a variety of tax incentive programs, small business grants, loans, and other forms of financial assistance. Whether you opt for entity domestication in Alabama or simply relocating your company, some of the tax incentive programs to consider include Jobs Credit programs, Sales & Property Tax Abatements, Growing Alabama Credit programs, and state-level tax incentives through the Enterprise Zone Program.

Quality of life

One of the salient highlights of relocating a business to Alabama is the exceptional quality of life the state provides. At the top of the list is the low cost of living driven by the cost of housing, where the average sale price of a house is almost 40 percent less than the national average. Alabama enjoys a moderate climate and the public schools here have one of the highest graduation requirements in the nation. The state is blessed with abundant natural resources and is home to diverse natural as well as scenic wonders including the prime Gulf Coast beaches and resort communities.

Steps to Move a Corporation to Alabama

One of the most favored business structures in Alabama is the C corporation. If you are thinking of moving a corporation to Alabama then there are several advantages that this state offers including pro-business regulations and laws. You may have several questions pertaining to moving your business to Alabama, so let us look at the various options available.

Register as a Foreign Corporation

Relocating a business to Alabama can be a complex process if you are unaware of the methods and the state laws. This is one of the favored options for those business owners who plan to expand in the state and want to also keep their company in the home jurisdiction operational. There is a process for moving a corporation to Alabama and it is known as foreign qualification. This process is governed by 2013 Code of Alabama, Title 10A; Article 7 – Foreign Entities. The process for foreign qualification is as follows:

• Designate a registered agent in Alabama for handling service of process pursuant to AL Code § 10A-1-5.31 (2013)
• Conduct a name availability search for the existing name and reserve it if available
• If the existing name is unavailable then you can register a trade name or DBA pursuant to AL Code § 10A-1-5.11 (2020)
• Foreign Corporation (Business or Non-Profit) Application for Registration pursuant to AL Code § 10A-2-15.01 (2020) along with a fee of $150.
• Apply for the necessary business licenses including professional license, local city or county licenses, and regulatory licenses if required

Do you want to start a foreign corporation in Alabama?

Dissolve home Corporation and establish new Corporation in Alabama

The second option for moving your business to Alabama is to dissolve your company in the home state and then incorporate a domestic corporation in the new state. This process of relocating an entity will require you to follow the laws of dissolution in the state where the company has been formed. The process of dissolution will vary from one state to another and may involve administrative, judicial, or voluntary dissolution.

Dissolution in Home State

• You will need to file a Certificate of Dissolution or Articles of Dissolution
• Depending on the state, you may be required to submit a certificate of cancellation
• You will need to obtain the necessary tax clearance by submitting your final tax return
• It is important to address any or all pending claims
• Surrender your business licenses

New Incorporation in Alabama

• Designate and continuously maintain a registered agent in the state pursuant to AL Code § 10A-1-5.31 (2022)
• Identify and reserve a business name using the domestic entity name reservation form
• File Certificate of Incorporation pursuant to AL Code § 10A-2-2.03 (2022) along with the appropriate fee
• Prepare bylaws for Alabama Corporation
• Apply for relevant business licenses and permits including a business privilege license

Incorporate in Alabama with ease!

Steps to Move an LLC to Alabama

A limited-liability company has several advantages over other forms of entity structures and hence is often favored by business owners. If you are thinking of entity domestication in Alabama or relocating your LLC to this state then you can benefit from the robust infrastructure, low taxes and small business incentive programs. There are different options available for moving your business to Alabama, so let us study these processes.

Register as a foreign LLC

If you are thinking of relocating a business to Alabama and if the said structure is that of a limited liability company (LLC) then there are several aspects to consider including creating a deep understanding of state and local business laws. This can often be confusing as the laws in Alabama would differ from those in your home state. The process of moving an LLC to Alabama is known as foreign qualification and will be governed by the Code of Alabama, Title 10 – corporations, partnerships, and associations, Chapter 12 – Limited Liability Company Act, Article 9 – Foreign Limited Liability Companies. In the process of foreign qualification:

• You will need to hire and maintain an Alabama registered agent services for handling service of process and also for managing state annual requirements
• You can use the same business name as currently in use only if it is available. You will need to conduct a name availability search for this name.
• If the existing name is available then you can reserve it. If the name is not available then you need to file a trade name or DBA using the Application to register or Renew Trademark, Service Mark or Trade Name form.
• You will need to file the Foreign Limited Liability Company (LLC) Application for Registration form pursuant to section 10A-1-7.04, Code of Alabama 1975. This will authorize you to conduct business in this state.
• You will also be required to apply for relevant business licenses and permits in the state.

Apply for LLC foreign qualification in Alabama

Dissolve home LLC and form new LLC in Alabama

The transfer of an LLC to Alabama is also possible through the process of dissolution of your company in the home state and forming a new domestic LLC in this state. This process requires you to follow the laws of dissolution of the LLC home state or where the limited-liability company was originally formed. You will also have to follow the laws pertaining to new LLC registration in Alabama. This is one of the easiest ways of moving your business to Alabama. Let’s look at an example to understand this.

Dissolution in Home State

• Depending on the state laws, you will need to file a Statement of Dissolution or Certificate of Dissolution
• You will need to obtain the necessary tax clearances by filing pending state or local taxes
• Clear all pending claims towards customers, partners etc.
• Surrender your business licenses and permits

New LLC Formation in Alabama

• Appoint an Alabama LLC registered agent for service of process pursuant to AL Code § 10A-1-5.31 (2014).
• Identify and reserve a business name using the domestic entity name reservation form
• File Certificate of Formation pursuant to AL Code § 10A-5A-2.01 (2022) along with a fee of $200
• Prepare Alabama LLC operating agreement
• Open a business bank account
• Apply for and obtain necessary business licenses and permits in the state

Register your LLC in Alabama Today!

Move Your Business to Alabama with IncParadise

If you are thinking of moving your business to Alabama then there are different options or methods available which can make your relocation possible. We at IncParadise, one of the top Alabama registered agent services can provide you with relevant information pertaining to entity domestication in Alabama as well as foreign qualification. We can also help in facilitating the paperwork necessary for dissolution in your home state and registration as a domestic entity in Alabama.