Southern hospitality. College football. Gulf coast beaches and barbecues. Alabama is known for many things including craggy mountains and also as a place where businesses of all shapes and sizes set up shop.
You’re ready to register an LLC in Alabama. Next steps? The price? Below are the processes, prices, and paperwork Alabama firms need.
Summary
In addition to its many other advantages, a limited liability corporation (LLC) provides small enterprises with protection from legal responsibility and favorable tax treatment.
Follow these easy steps to get your Alabama limited liability company up and going after you’ve decided that an LLC is the most suitable form of business for your requirements.
Note that you have the option of forming the limited liability company (LLC) yourself, or you may hire a reputable company incorporation firm to do all of the legwork on your behalf.
1. Naming Your LLC in Alabama
Choosing a name for your new Alabama limited liability corporation is the preliminary and most significant stage in the process. Make sure that you pick a name that not only satisfies the naming criteria of the state of Alabama but is also readily searchable by prospective customers.
Be sure to abide by the naming guidelines:
- You are required to have the word “limited liability corporation” or one of its acronyms included in the name of your business (LLC or L.L.C.)
- You are not allowed to use any terms in your company’s name that might lead to confusion with a public entity (e.g., FBI, Treasury, State Department)
- Words that are restricted, such as “bank,” “attorney,” and “university,” may need extra documentation and the participation of a licensed professional, such as a physician or lawyer, in your limited liability company.
- Your name must be unique among Alabama LLCs, corporations, limited partnerships, and LLPs.
Is it possible to register the name in Alabama?
Conduct a Business Entity Search on the website of the Alabama Secretary of State to check whether the name you desire is already in use by another company or organization.
2. Pick a Registered Agent in the state of Alabama
A registered agent in Alabama is required of every limited liability company operating in the state. If the limited liability company (LLC) is taken to court, this refers to a person or company that has agreed to accept service of process on its behalf.
It is possible for the Registered Agent to be either a resident of Alabama or a legal entity that is permitted to do business in the state. The Registered Agent is required to provide evidence of a physical address in Alabama.
What exactly is the role of a Registered Agent?
A Registered Agent receives tax forms, legal paperwork, lawsuit notices, and formal government communication for your firm. Consider the role of your registered agent as that of the point of contact for your company with the state.
Who is eligible to serve as a Registered Agent?
A Registered Agent must either be an individual who resides in Alabama on a permanent basis or a corporation that is permitted to carry out operations in the state of Alabama, such as a company that offers Registered Agent services. You have the option of selecting anybody who works for the organization, including yourself.
3. Submit an application for the Certificate of Formation
The Certificate of Formation is a document that lays forth fundamental information about your limited liability company and is responsible for formally establishing your LLC. Because this form serves as the legal registration for your company with the state, it is essential that all of the details be accurate.
What information should be included on a Certificate of Formation?
When completing the Certificate of Formation for your Alabama LLC, you are required to give the following information:
- LLC’s name
- Term of the LLC is permanent or restricted.
- Address of the main office of the limited liability company Name and address of the registered agent for the limited liability company
- Location where the Secretary of State should send notifications to the limited liability company (LLC) through mail.
- How the Limited Liability Company (LLC) will be run: by its members or by its managers
- Whether or whether the limited liability company will provide business services
- Name and address of each person who organized the limited liability company, as well as the name and address of at least one member or management who has direct knowledge of the activities of the limited liability company.
Putting in an Application for Your Certificate of Formation
In the past, if you wanted to form a business in Alabama that was structured as a limited liability company (LLC), you were needed to file a copy of your application for a Certificate of Formation with the probate court in the county where you planned to locate your new company.
Act 2020-73, which became a part of the legislation of the state of Alabama on January 1, 2021, was responsible for removing this prerequisite from the statutes of that state.
Along with the Certificate of Formation, you are also required to present a copy of the Name Reservation Certificate issued by the Alabama Secretary of State. Mail is the only acceptable method for filing the certificate; filing it online is not an option.
Along with the certificate, you are required to submit payment for the following two filing fees:
- A filing fee of one hundred dollars with the Secretary of State
- A filing fee of $50 should be paid to the Probate Court.
The amount of time required to process orders will vary from place to place. The Judge will file and return a stamped copy of the Certificate of Formation and after that, the certificate will be handed over to the Secretary of State by the Probate Court.
4. Obtain a Certificate From the State Government
After the formation paperwork of the LLC has been submitted and authorized, the state will send you a certificate that proves the LLC’s official existence in response to a written request for a copy together with the appropriate amount of postage.
With this certificate, the limited liability company will be able to get an Employer Identification Number (EIN), as well as business permits and a bank account for the firm.
5. Document your Business Operations agreement
Although establishing a detailed LLC operating agreement is not a legally required step for incorporating a limited liability company in the state of Alabama, it is highly suggested for all new limited liability firms.
The following items should be included in the operating agreement:
- Describe the business structure of the limited liability company.
- Determine the specific duties and commitments that each member of the limited liability company (LLC) has
- The operational structure of the LLC.
Significant legal and logistical challenges might await a limited liability company (LLC) in the absence of an operating agreement that defines the precise responsibilities of its members.
6. Obtain an EIN
A federal employer identification number, commonly known as a tax ID number, will be required of many limited liability companies (LLCs). An Employer Identification Number (EIN) is a nine-digit number that identifies your company to the Internal Revenue Service.
You need an EIN in order to pay federal employer taxes, open a bank account (in most situations), or recruit staff.
On the website of the Internal Revenue Service (IRS), which is accessible without charge, you may check to see whether you need an EIN and submit an application for one online.
Single-member limited liability companies, which are an exemption to the rule that most firms are required to acquire an EIN, may instead use the owner’s Social Security number.
Business Licenses
Depending on the nature of the business they conduct and the location of their operations in Alabama, some limited liability com