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An Alabama certificate of good standing (AL) is a legal document that verifies that your limited liability company (LLC) or corporation was correctly formed and is in good standing with the state.
This Certificate of Good Standing Alabama guide will explain how to get a certificate of good standing in Alabama and the requirements to get a good standing certificate.
What is a Certificate of Good Standing?
The certificate- of good standing, aka “certificate of existence,” confirms that a company is up-to-date with its filings and has no legal issues preventing it from conducting business.
This state document verifies that you have legally formed your LLC or corporation and that your company is properly maintained.
Requirements for Getting an Alabama Certificate of Good Standing
In Alabama, the certificate of good standing is known as a certificate of compliance or the Alabama department of revenue certificate of good standing. To qualify for an Alabama certificate of compliance, make sure your corporation or LLC is up-to-date with the following state compliance requirements.
Obtain Business Licenses & Permits
Follow federal, state, and local licensing guidelines to operate your business in Alabama in a state-compliant manner. Some examples include health permits, building permits, medical and other professional licenses, etc.
To find more about state licensing requirements, visit the Alabama Department of Revenue website.
Pay State Taxes
Different businesses are subjected to different taxes, including withholding tax, sales tax, Unemployment Insurance (UI) tax, etc. Depending on your business activity, you must register for various forms of Alabama state tax.
Alabama also imposes a franchise tax called a Business Privilege Tax. This tax is based on the business’s income from the previous year.
Visit the Alabama Department of Revenue’s Business Essential for State Taxpayers (BEST) section to know the specifics of taxes that your business owes to the state.
Timely Submit Annual Reports
All Alabama corporations and LLCs must file an annual report that summarizes your business’s finances over the past year.
The Department of Revenue requires your business to submit an annual report as part of the Business Privilege Tax filing. The minimum Business Privilege Tax is $100, and the exact amount of this tax is based on the company’s last year’s income. The filing deadline for Business Privilege Tax is April 15.
How Do I Get a Certificate of Good Standing in Alabama?
Once your business is up-to-date with all filings and compliance requirements, you can order your certificate of Good Standing from the state authority.
The Alabama certificate of compliance is requested from the Alabama Department of Revenue. To order your certificate of compliance online from the Alabama Department of Revenue, click the following link.
The filing Cost for the Alabama Certificate of Compliance is $14.
Why Do I Need a Certificate of Good Standing in Alabama?
While you don’t necessarily need a certificate of compliance to run your LLC or corporation in Alabama, there are several instances where you may need to get one. These include:
- Opening a business bank account
- Applying for a business loan or line of credit from a bank
- Purchasing business insurance
- Trying to lease commercial space
- Soliciting funds from potential investors
- You want to register your LLC or other business in another state as a foreign or out-of-state LLC
- You want to Transfer or domesticate your business to another state
- You’re selling your business, and the buyer wants proof that the company is in good legal standing
- You are contracting with another company
- You need to show compliance with government regulations in any other situation
FAQs on Alabama Certificate of Good Standing
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