As filed with the Securities and Exchange Commission on December 30, 2005

Registration No. 333-____

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

FORM S-8

REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

ALLIED CAPITAL CORPORATION

THE 2005 ALLIED CAPITAL CORPORATION

CALCULATION OF REGISTRATION FEE

PART I

INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS

     The documents containing the information specified in Part I of Form S-8 will be sent or given to the participants in The 2005 Allied Capital Corporation Non-Qualified Deferred Compensation Plan II as specified by Rule 428(b)(1) under the Securities Act of 1933. Such documents are not being filed with the SEC in accordance with Part I of Form S-8, but constitute (along with the documents incorporated by reference into this registration statement pursuant to Part II hereof) a prospectus that meets the requirements of Section 10(a) of the Securities Act of 1933.

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PART II

INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

Item 3. Incorporation of Certain Documents by Reference.

     We hereby incorporate, or will be deemed to have incorporated, herein by reference the following documents:

     Each document filed subsequent to the date of this registration statement pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, prior to the filing of a post-effective amendment which indicates that all securities offered have been sold or which deregisters all securities then remaining unsold, shall be deemed to be incorporated in this registration statement by reference and to be a part hereof from the date of the filing of such documents. Any statement contained in a document incorporated or deemed to be incorporated herein by reference shall be deemed to be modified or superseded for purposes of this registration statement to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement.

Item 4. Description of Securities.

     This registration statement covers the registration of Deferred Compensation Obligations (as defined below) to be offered under The 2005 Allied Capital Corporation Non-Qualified Deferred Compensation Plan II (the “DCP II”) to certain executives of Allied Capital Corporation (the “Company”) who are designated as eligible to participate in the DCP II by the Compensation Committee of the Board of Directors of the Company (the “Compensation Committee”).

     The Company’s obligations to pay participants in the DCP II, upon their termination of employment with the Company (as defined in DCP II), a change in control of the Company (as defined in DCP II), or the termination of the DCP II, certain cash performance awards (which are referred to herein as “individual performance awards”) granted to the participant by the Compensation Committee, the receipt of which has been deferred under the DCP II, are referred to as the “Deferred Compensation Obligations.” The Deferred Compensation Obligations are general unsecured obligations of the Company to pay deferred compensation in the future in accordance with the terms of the DCP II from the general assets of the Company. The deferred compensation shall be paid in the form of cash or, to the extent the participant’s deferred compensation is invested in the common stock of the Company, in the form of the Company’s common stock. The Company’s obligation to pay such deferred compensation at a later date is not guaranteed and is subject to the Company’s ability to pay.

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     The following is a brief description of the material features of the DCP II. Such description is qualified in its entirety by reference to the full text of the DCP II, which is incorporated by reference into this registration statement.

     Individual performance awards will be determined by the Compensation Committee annually at the beginning of the year. Then, on a quarterly basis, one quarter of the award will be contributed in cash to a deferred compensation trust. A trustee appointed to oversee the trust will use the cash to purchase shares of the Company’s common stock on the New York Stock Exchange or any other exchange on which the Company’s shares are subsequently traded. The shares purchased by the trustee will then be credited to each executive’s deferral account based on the amount of the individual performance award received by such officer. Although awards and the shares purchased with the awards are placed in trust, the amounts held in the trust remain the general assets of the Company and, thus, the participants will not have an ownership interest in any of the assets of DCP II, the trust, the shares or any other assets held in trust. All assets of DCP II and the trust will be subject to the claims of the Company’s general creditors.

     All of the Company’s executives are eligible to receive individual performance awards and participate in the DCP II. The Compensation Committee, in its sole discretion, shall designate the executives who will participate in the DCP II.

     In the event of termination of employment as a result of resignation, involuntary discharge, or disability, one-third of the participant’s deferral account will be distributed no sooner than six months following the termination of employment, one half of the then current remaining balance will be distributed within 30 days following the first anniversary of his or her employment termination date and the remainder of the account balance will be distributed within 30 days following the second anniversary of the employment termination date. In the event of termination of employment for good reason, as defined in the DCP II, all amounts in a participant’s deferral account will be distributed no sooner than six months following the termination of employment. In the event of termination due to death, one-third of the participant’s deferral account will be distributed 30 days following the distributable event, one half of the then current remaining balance will be distributed within 30 days following the first anniversary of the date of the distributable event and the remainder of the account balance will be distributed within 30 days following the second anniversary of the date of the distributable event. In the event of a “change of control,” all amounts in a participant’s deferral account will be immediately distributed to the participant. “Change of control” is defined in the DCP II to include a variety of events, including significant changes in the Company’s stock ownership, changes in the Board of Directors of the Company, a merger and consolidation of the Company, and the sale or disposition of at least 40% of the Company’s assets. Sixty days following a distributable event, the Company and each participant may, at the discretion of the Company, and subject to the Company’s trading window during that time, redirect the participant’s account to other investment elections.

     During any period of time in which a participant has a deferral account in the DCP II, any dividends declared and paid on shares of common stock allocated to the participant’s account shall be reinvested by the trustee as soon as practicable in shares of the Company’s common stock purchased in the open market.

     All amounts paid to the DCP II will be fully vested at all times. However, a participant who violates certain non-solicitation covenants contained in the DCP II during the two years after the termination of his or her employment will forfeit back to the Company the remaining value of his or her deferral account.

     The DCP II will be administered by the Compensation Committee. The Compensation Committee will have full power and authority, subject to the provisions of the DCP II, to promulgate such rules and regulations as it deems necessary for the proper administration of the DCP II, to interpret the provisions and supervise the administration of the DCP II, and to take all actions in connection therewith or in relation thereto as it deems necessary or advisable.

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     The DCP II is a non-qualified plan, and no participant or other person will own any interest in particular assets of the Company or any of the Company’s subsidiaries by reason of the right to receive any payment under the DCP II.

     The Board of Directors of the Company reserves the right to amend, terminate, or discontinue the DCP II, provided that no such action will adversely affect a participant’s rights under the DCP II with respect to the amounts paid to his or her deferral account. No amendment will be effective unless approved by the Company’s stockholders if stockholder approval of such amendment is required to comply with any applicable law, regulation or stock exchange rule. Upon termination of the DCP II, any amounts credited to the deferral account of a participant will be distributed in full to such participant in accordance with the terms of DCP II.

Item 5. Interests of Named Experts and Counsel.

     Not Applicable.

Item 6. Indemnification of Directors and Officers.

     Section 2-418 of the Maryland General Corporation Law provides that a Maryland corporation may indemnify any director of the corporation and any person who, while a director of the corporation, is or was serving at the request of the corporation as a director, officer, partner, trustee, employee, or agent of another foreign or domestic corporation, partnership, joint venture, trust, other enterprise or employee benefit plan, made a party to any proceeding by reason of service in that capacity unless it is established that the act or omission of the director was material to the matter giving rise to the proceeding and was committed in bad faith or was the result of active and deliberate dishonesty; or the director actually received an improper personal benefit in money, property or services; or, in the case of any criminal proceeding, the director had reasonable cause to believe that the act or omission was unlawful. Indemnification may be made against judgments, penalties, fines, settlements, and reasonable expenses actually incurred by the director in connection with the proceeding, but if the proceeding was one by or in the right of the corporation, indemnification may not be made in respect of any proceeding in which the director shall have been adjudged to be liable to the corporation. Such indemnification may not be made unless authorized for a specific proceeding after a determination has been made, in the manner prescribed by the law, that indemnification is permissible in the circumstances because the director has met the applicable standard of conduct. On the other hand, the director must be indemnified for expenses if he or she has been successful in the defense of the proceeding or as otherwise ordered by a court. The law also prescribes the circumstances under which the corporation may advance expenses to, or obtain insurance or similar cover for, directors.

     The law also provides for comparable indemnification for corporate officers and agents.

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     The Restated Articles of Incorporation of Allied Capital Corporation provide that its directors and officers shall, and its agents in the discretion of the board of directors may be indemnified to the fullest extent permitted from time to time by the laws of Maryland (with such power to indemnify officers and directors limited to the scope provided for in Section 2-418 as currently in force), provided, however, that such indemnification is limited by the Investment Company Act of 1940 or by any valid rule, regulation or order of the Securities and Exchange Commission thereunder. Allied Capital Corporation’s bylaws, however, provide that Allied Capital Corporation may not indemnify any director or officer against liability to Allied Capital Corporation or its security holders to which he or she might otherwise be subject by reason of such person’s willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his or her office unless a determination is made by final decision of a court, by vote of a majority of a quorum of directors who are disinterested, non-party directors or by independent legal counsel that the liability for which indemnification is sought did not arise out of such disabling conduct.

     Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of Allied Capital Corporation pursuant to the provisions described above, or otherwise, Allied Capital Corporation has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by Allied Capital Corporation of expenses incurred or paid by a director, officer or controlling person in the successful defense of an action, suit or proceeding) is asserted by a director, officer or controlling person in connection with the securities being registered, Allied Capital Corporation will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of the court of the issue.

     Allied Capital Corporation carries liability insurance for the benefit of its directors and officers on a claims-made basis of up to $50,000,000, subject to a $1,000,000 retention and the other terms thereof. Allied Capital Corporation also maintains an additional $20,000,000 of insurance coverage for the benefit of its directors and officers.

     Allied Capital Corporation has entered into indemnification agreements with its directors and certain senior officers. The indemnification agreements attempt to provide these directors and senior officers the maximum indemnification permitted under Maryland law and the Investment Company Act of 1940. Each indemnification agreement provides that Allied Capital Corporation shall indemnify the director or senior officer who is a party to the agreement (an “Indemnitee”) if, by reason of his or her corporate status, the Indemnitee is, or is threatened to be, made a party to or a witness in any threatened, pending, or completed proceeding, other than a proceeding by or in the right of Allied Capital Corporation.

     At present, these is no pending litigation or proceeding involving an Indemnitee where indemnification would be required or permitted under the indemnification agreement.

Item 7. Exemption from Registration Claimed.

     Not applicable.

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Item 8. Exhibits.

Item 9. Undertakings.

     (a) The undersigned registrant hereby undertakes:

     (1)     To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

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     provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) above shall not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Securities and Exchange Commission by the registrant pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”) that are incorporated by reference in the registration statement.

     (b) The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

     (c) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

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SIGNATURES

     Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Washington, D.C., on this 30^th day of December, 2005.

POWER OF ATTORNEY

     KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints William L. Walton and Joan M. Sweeney as his/her true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him/her and in his/her name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this Registration Statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent, full power and authority to do and perform each and every act and thing required and necessary to be done in and about the premises, as fully to all intents and purposes as he/she might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his/her substitute or substitutes, could lawfully do or cause to be done by virtue hereof.

     Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities and on the dates indicated.

EXHIBIT INDEX