Withdraw a Foreign Alabama LLC or Corporation 

Northwest’s guide to withdrawing a foreign LLC or corporation in Alabama goes over what it means to be a foreign business, the forms you’ll need to file to withdraw or cancel it, the cost to withdraw your business, and everything else you’ll need to know.

Steps to Withdraw a Foreign Alabama Business

If your out-of-state business has ceased operations in Alabama, you should:

1. File paperwork with Alabama’s Secretary of State to withdraw your foreign LLC or corporation.
2. Ensure all tax obligations are satisfied (check with the Alabama’s Department of Revenue).
3. Notify your registered agent in Alabama (if you have one) that you’re withdrawing.

Follow this guide to learn how to withdraw your foreign business from Alabama.

What is a foreign Alabama business?

When companies expand their business to a new state, they’re called “foreign businesses” in their new state. To operate legally, the business needs to register with the new state by completing a process called foreign qualification. Later, if the business stops operating in its “foreign” state, it can withdraw the business by cancelling its foreign registration.

How do I cancel a foreign LLC in Alabama?

To withdraw or cancel your foreign Alabama LLC, you must provide in duplicate the completed Foreign Limited Liability Company Certificate of Withdrawal form, in duplicate, with the filing fee to the Secretary of State by mail.

How do I cancel a foreign corporation in Alabama?

To withdraw or cancel your foreign Alabama corporation in Alabama, you must provide in duplicate the completed Foreign Corporation (Business or Non-Profit) Certificate of Withdrawal form, with the filing fee to the Secretary of State by mail.

How do I file my foreign business withdrawal forms in Alabama?

Foreign withdrawal forms can be filed online with Alabama Online Services, or by mail. Alabama’s Secretary of State requests that you mail two copies of the completed form along with a self-addressed, stamped envelope to:

Alabama Secretary of State
Business Services
P.O. Box 5616
Montgomery, Alabama 36103

Note: You must include the Certificate of Compliance from the Alabama Department of Revenue.

 

Foreign Alabama LLC and Corporation Withdrawal FAQs

How much does it cost to withdraw a foreign business in Alabama?

There is a $100 filing fee for both foreign LLCs and corporations. You may request expedited processing for an additional $100.

Do I need an Alabama Department of Revenue clearance first?

Yes. You will need to obtain and attach a Certificate of Compliance from Alabama’s Department of Revenue, showing that your foreign business has paid all taxes, fees, and fines.

How long does it take the state to process the withdrawal filing?

Normal processing time is approximately two to three weeks after you receive the tax clearance. The tax clearance is usually received in a week after the application is received.

Expedited service shaves the process down to about three days. However, expedited processing only applies to the Secretary of State filing. The Alabama Department of Revenue processes each application in the order they come in.

How will Alabama return notice of withdrawal to me?

If you provide a duplicate copy of the form and a self-addressed, stamped envelope, Alabama’s SOS will send you a confirmation copy by mail.

What if I don’t file a withdrawal and just don’t file my annual report?

In Alabama, the Department of Revenue—not the Secretary of State—handles annual reports, also known as the Business Privilege Tax (replacing the old franchise tax). If you’re closing your foreign business, you need to file your withdrawal right away. Otherwise, fees and interest will keep piling up.

If you fall behind, your status with the Secretary of State will change to “Not in Good Standing.” If you don’t file and pay your Business Privilege Tax within about 120 days of the due date, the Department of Revenue will mail you a notice. You have 60 days to respond. If you don’t, they’ll send your case to collections. This could lead to court action, including wage garnishment or property seizure—plus extra costs.

Bottom line: If you’re closing up shop in Alabama, file your withdrawal ASAP to avoid penalties and legal trouble.

Can a foreign business lose its ability to operate for not filing an annual report?

Eventually, yes. The Alabama Secretary of State no longer revokes entities administratively. The Department of Revenue will conclude its collection action, leaving your company active and in good standing until you skip your next Business Privilege Tax return.

What are the late fees and penalties to re-register if I didn’t withdrawal correctly?

You will need to contact the Alabama Department of Revenue to get the specific amount of fees, penalties and interest due. They collect an annual Business Privilege Tax return from all limited liability companies in Alabama. If the return is not filed and paid when it is due, a penalty of 10% of the amount due is charged or $50, whichever is greater. Then you will continue to add an additional 1% penalty per month it goes unpaid. The Department of Revenue will turn your case over to their Collection Services Division before the following year’s Business Privilege Tax is due. Collection Services Division will get a court order to seize whatever is needed to satisfy your company’s debt to the Department of Revenue. No agency in Alabama will administratively dissolve your business. So if you don’t want to face the same expensive litigation every year, file a proper withdrawal with the Secretary of State.

What is the difference between withdrawing and dissolving a business?

To dissolve a business means officially ending its legal existence in the state where it was formed. Withdrawal refers to removing its registration to operate in a specific state other than its state of formation. Withdrawing an Alabama business means that the business is ending its operations in that state, but can continue to do business in its home state and any other state where it is legally registered.

Learn how to dissolve an Alabama LLC or Alabama corporation.

What if I want to start a foreign LLC or corporation in Alabama?

You’re in luck! Our guides on how to form a foreign Alabama LLC or a foreign Alabama corporation are easy to follow.