The process of Legally Closing a Corporation in Alabama is called Dissolution.  After an Alabama Corporation has been Dissolved, it ceases to be Legally Active in the Alabama Secretary of State's records and may no longer Legally conduct business in the state of Alabama.

An Alabama Corporation is created when the AL Secretary of State approves the Formation Documents - Articles of Incorporation.  A record of the Alabama Corporation is added to the list of Corporations which have officially registered with the Alabama Secretary of State.  Once a Corporation is registered with the Alabama Secretary of State, that Corporation immediately has both reporting and tax obligations which incur penalties if the obligations are not met by the required deadlines.

If you've registered an Alabama Corporation with the Alabama Secretary of State and want to cease business activities you have to let the AL Secretary of State know that you intend to close your company.  Only after the AL Secretary of State has made sure that all of the obligations of the Alabama Corporation have been fulfilled will the Secretary of State approve of the closure of the company.

When the Alabama Secretary of State approves the closing of an AL Corporation, that Alabama Corporation is said to be Dissolved.  The process of Dissolving an Alabama Corporation is called Alabama Corporation Dissolution.

Articles of Dissolution for an Alabama Company must be filed with the Office of the Judge of the Probate in the Alabama county where the Alabama Corporation's Certificate of Formation was recorded. The Judge Probate's Office will transmit a certified copy of the Articles of Dissolution for the Alabama Corporation to the Alabama Secretary of State within 10 days after the Dissolution filing is recorded.

Once an Alabama Corporation is dissolved by the Alabama Secretary of State that AL Corporation may not carry on any business except as part of the Winding Up process and to liquidate its company assets.

As soon as an Alabama Corporation is registered with the AL Secretary of State, that Corporation is responsible for recurring obligations of the Alabama Secretary of State and the Alabama Department of Revenue.  If an Alabama Corporation does not file its required reports or pay its tax obligations, then that AL Corporation could be responsible for penalties which compound as time goes by.

Unless you Dissolve (Legally Close) your Alabama Corporation with the Alabama Secretary of State that AL Corporation will be responsible for all recurring fees and penalties until the company has been legally closed.

Alabama Corporation Dissolution is one part of a larger process commonly called the "Winding Up" process.

There are things you need to do before you can request approval of Corporation Dissolution from the Alabama Secretary of State; and things that you have to do after the AL Secretary of State has approved Dissolution of the Alabama Corporation. 

When an Alabama Corporation is originally created, the Organizers may create Bylaws that define how the Corporation will be run.  The Bylaws may include pretty much anything that has to do with running the Corporation, including specific requirements which need to be followed before the Corporation may be Legally Closed.  Before you do anything else, you should review the Bylaws for anything that needs to be done before the Business is Legally Closed.

What you have to do both before and after the Alabama Corporation is Dissolved largely depends on how much stock, if any, has been issued and how much and what kind of debts and liabilities that the Alabama Corporation has.  If the Alabama Corporation has not commenced business then the AL Corporation Dissolution process is easier.

1. Hold a Board of Directors meeting and record a resolution to Dissolve the Alabama Corporation
   
   If a Board of Directors has been appointed for the Alabama Corporation, then the Board is required to adopt a resolution to Dissolve the AL Corporation.  There should be a majority of Board Members who vote Yes to Legally Close the company.  A formal date on which the Corporation will be closed should be specified.  Minutes of the meeting should be recorded and retained in the business records.  If the Board of Directors has not been appointed then the Incorporator(s) have to apply for Dissolution of the Alabama Corporation.
   
   We can transcribe and compile any minutes or approvals into a form that is legally recognized by the Alabama Secretary of State.
   
   
2. Hold a Shareholder meeting to approve Dissolution of the Alabama Corporation
   
   If an Alabama Corporation has issued shares of stock then a meeting of the Shareholders (owners) must be held and recorded. A majority of Corporate Shareholders must approve the Dissolution plan.  The approval actions should be documented and kept in the business records.
   
   If no shares have been issued then the Alabama Corporation Dissolution process is easier.
   
   
3. File all required Business Privilege Tax Return and Annual Reports with the Alabama Secretary of State
   
   The Alabama Secretary of State will not approve the Dissolution of a AL Corporation until all required administrative reports have been filed.
   
   We can file any required Business Privilege Tax Return and Annual Reports with the AL Secretary of State.
   
   
4. Clear up any business debts
   
   All creditors of an Alabama Corporation should be given notice of the pending Corporation Dissolution. Each creditor should be given a mailing address to which they may submit claims as well as a deadline by which claims may be submitted.
   
   While the Alabama Secretary of State does not legally require the publication of a Notice of Dissolution of an Alabama Corporation, publication is a good way to notify anyone who might have a claim against the Alabama Corporation.  Evidence of publication might prove useful down the line if someone makes a claim against the AL Corporation after the Alabama Corporation has been dissolved.
   
   
5. Pay all taxes and administrative fees owed by the Alabama Corporation
   
   The Alabama Secretary of State will definitely not approve the Dissolution of an Alabama Corporation until all outstanding taxes and applicable registration and administrative fees have been paid.

1. Distribute all remaining assets of the Alabama Corporation
   
   If the Alabama Corporation has any remaining assets, these may be divided according to the Shareholders' ownership interests in the AL Corporation. All distributions to Corporate Shareholders must be reported to the IRS.  Refer to the Corporation Bylaws for specific requirements, if any, for asset distribution.
   
   
2. Close all business bank accounts of the Alabama Corporation
   
   If there are any business accounts that have been opened for the Alabama Corporation then those accounts must be closed.  If any Corporate business accounts are left open there may be liability and obligations of the Dissolved Alabama Corporation which could lead to legal problems.
   
   
3. Cancel all local business licenses and permits of the AL Corporation
   
   If the Alabama Corporation has obtained any state, regional, county or city business licenses or permits, there may be cancellation requirements associated with those licenses or permits.  Each of those must be cancelled to avoid any reporting or fiscal obligations the Alabama Corporation may have.  This includes business registration licenses as well as reseller permits.
   
   
4. File IRS Form 966
   
   A Dissolved Alabama Corporations may be required to file IRS Form 966 with the US Internal Revenue Service.  This filing is required within 30 days after the final Dissolution plan is approved.  Filing IRS Form 966 lets the Federal Government know that the Alabama Corporation has been legally Dissolved so that it may take the appropriate actions.
   
   
   We can prepare IRS Form 966 for you to file.
   
   
5. Cancel the IRS account associated with the AL Corporation's Federal Tax ID (EIN)
   
   A Federal Tax ID, or Federal Employer Identification Number (EIN), is like a Social Security Number for the Alabama Corporation.  Once the IRS links an EIN to an Alabama Corporation, that EIN stays with the Alabama Corporation even after the Company has been Dissolved by the Alabama Secretary of State.
   
   When the IRS processes the final tax return for the Alabama Corporation, they automatically make the EIN inactive.  However, the account associated with the EIN is not automatically closed.  Closing the account associated with the EIN lessens the likelihood of any problems with the EIN account, or with the IRS, in the future.
   
   If you should decide to revive the Alabama Corporation down the line the IRS will reactivate the old EIN for your new Business.
   
   Before an Alabama Corporation can close an EIN account, it must be in Good Standing with the IRS.  The Alabama Corporation must have filed all required tax returns and paid any applicable fees and penalties due to the IRS.  The Alabama Corporation cannot close its EIN account until the IRS has received payment for any tax amounts the Company may owe.
   
   
   We can prepare the formal documents which you can sign and submit to the IRS in order to close the account associated with your EIN.
   
   
6. Keep Records of all Pertinent Business Documents
   
   In order to avoid problems down the line, you should keep copies of all tax filings, contracts and employment records on file as well as Certified Copies of all company documents filed with the Secretary of State.  This includes your Formation Documents - your original Articles of Incorporation and any Amendments - and all Dissolution douments.

You notify the IRS that your Alabama Corporation has been Closed on the final tax return that is filed for your Business. 

If you have employees and file taxes quarterly with IRS Form 941, Employers Quarterly Tax Return, check the appropriate box on that form to let the IRS know that your Corporation has Closed.  If you file yearly taxes do the same on IRS Form 944, Employers Yearly Tax Return. You should also attach a statement to the return showing the name of the person keeping the payroll records and the address where those records will be retained.

When you opened your Alabama Corporation you most likely were assigned a Federal Employer Identification Number (EIN).  Once the IRS links an EIN to a Corporation, that EIN stays with the Corporation even after the Company has been Dissolved.  If you don't plan to reopen your Alabama Corporation after it has been Closed, you should cancel the EIN account that has been assigned to your Company.

The time it takes to Dissolve an Alabama Corporation varies depending on how long it takes to complete the actions that are required in each specific case - holding meetings, closing accounts, distributing assets, etc.

Once the initial actions are completed, the Alabama Secretary of State usually takes around 3-4 business weeks to process the Articles of Dissolution.

Processing times for Alabama Corporation Dissolution filings vary depending on the work load of the Secretary of State's staff.  We've found that normal processing of Alabama Dissolution filings takes the state around 3-4 business weeks.
We are dependent on, and have no control over, the staff and systems of the Alabama Secretary of State . In our experience 3-4 business weeks is the time it usually takes the Alabama Secretary of State to process an Alabama Dissolution filing. We get your Alabama Corporation Dissolution filing to the AL Secretary of State as soon as possible after we receive your order. Once it is at the state we have no control over the Alabama Dissolution approval process.

The total cost to Dissolve an Alabama Corporation varies depending on exactly what is required for each specific AL Dissolution.  We charge $249 plus any state fees for our Alabama Corporation Dissolution services.

We also offer these Alabama Corporation Dissolution services separately.

If there are Foreign Corporations in states other than Alabama that are tied to the Domestic Alabama Corporation then each of those Foreign Corporations must be Dissolved before the Alabama Corporation can be legally Dissolved.

The company name of a Dissolved Alabama Corporation may not be used by another Alabama Corporation or LLC within 120 days of the date on which the Alabama Secretary of State approved the Dissolution of the Alabama Corporation. After 120 days the company name becomes available to any Alabama Corporation or LLC. There are no protections on the use of a Alabama company name after 120 days from the date of Dissolution.