HOW TO FORM AN LLC IN ALABAMA
Forming an LLC in Alabama requires submitting the completed Certificate of Name Reservation and the Certificate of Formation to the Alabama Secretary of State.
Once those documents are effectively filed, the following tasks are necessary to establish and maintain your business:
- Drafting and Finalizing an Operating Agreement
- Obtaining an Employer Identification Number
- Applying for Necessary Business Permits and/or Licenses
- Filing an Annual Report & Tax Returns
Alabama Registered Agent LLC Formation Package
We can think of a million other things you would rather stress about.
If you’re in the market to form an LLC, and have countless other business-related tasks on your list, let Alabama Registered Agent LLC help lighten that load.
Alabama Registered Agent LLC Formation Package Includes:
- Completed and Filed Certificate of Formation
- Official Business Documents, Emailed Directly to You
- Access to Your Safe and Secure Client Account
- One Year of Registered Agent Service
- Annual LLC Renewal Reminders
- Transparent and Fair Pricing
We form your Alabama LLC for a flat fee of $435.
|Alabama State Filing Fees||$286|
|Our Formation Service Fee||$100|
|One Year Registered Agent Service||$49|
Why should you choose Alabama Registered Agent LLC to form your LLC?
Forming an LLC in Alabama can be tricky if you take it on yourself. Here at Alabama Registered Agent LLC, we have the know-how and experience to get your LLC formed quickly and correctly.
Alabama LLC Advantages
Generally speaking, forming an LLC is much easier and much less expensive than incorporating a business. Compared to corporations, LLCs have far fewer rules and regulations. While corporations are required to elect a board of directors, hold shareholder meetings, and keep meeting minutes, LLCs are more relaxed when it comes to formalities.
LLCs can elect to be taxed as partnerships, c-corps, s-corps, or as a disregarded entity (also known as a “pass-through” entity). This taxation flexibility lets those forming an LLC pick and choose the right classification for their current and future business needs.
Here’s a DIY guide to forming an LLC in Alabama.
Just in case you might want to give it a go on your own. Don’t worry. If you get in over your head–we’ll still be here to help.
ALABAMA LLC GUIDE
Step-by-Step Instructions to Form an LLC in Alabama
Choose a Name
The first step is choosing a name for your company. The name of your LLC must be distinguishable from any other legal business entity registered in Alabama. The name must also include the words “Limited Liability Company” or the abbreviation “LLC”–with or without the punctuation.
You should check to make sure that the name you want is available. You can do this by searching the Alabama Secretary of State Business Entity Records. If the name you choose for your LLC is not unique, your Certificate of Name Reservation will be rejected.
Complete the Certificate of Name Reservation
The next step is completing and filing the Certificate of Name Reservation.
You will be required to provide the following information on the Certificate of Name Reservation:
- Type of business entity
- Name of company requested
- Name and address of the requester
- Where the filed certificate should be mailed
- Payment information
You can file this document online at the Alabama Secretary of State Online Services website or you can submit it via mail to:
Office of the Secretary of State
PO Box 5616
Montgomery, AL 36103
If you submit the Certificate of Name Reservation via mail, you are not required to submit it with a cover letter and there is no guaranteed processing time.
If you choose to file the certificate online, you will have the option to immediately proceed to filing the Certificate of Formation to form your LLC. If you file the Certificate of Name Registration by mail, you will have to wait until you receive confirmation or registration from the Alabama Secretary of State.
Filing Method Fee Approval Time Online $28 Instant $10 Varies Mail-Expedited $25 Within 24 Hours of Receipt
If you prefer to file by mail, a copy of the form is available online on the Alabama Secretary of State Name reservation Request Form for Domestic Entities website. If you complete this step online, a form is not necessary.
If it isn’t already obvious, filing online is very simply and requires far fewer steps than completing the LLC formation process via mail.
Choose a Registered Agent
All LLCs formed in Alabama are required to select a registered agent. A registered agent is a third party entity or individual who is elected by the initial organizers of the LLC to receive any legal correspondence–including service of legal process–and reminders from the Alabama Secretary of State office on behalf of the company.
The registered agent must have a physical street address located in Alabama. A PO box address is not valid. If your LLC does not maintain a registered agent in Alabama, the state will have the authority to administratively dissolve your LLC.
Alabama Registered Agent LLC can serve as your registered agent for $35 a year.
Can I be my own registered agent?
Yes–however, to do so, you must have a physical street address in Alabama. Serving as your own registered agent may also be problematic for those who want to keep their personal information private. Hiring a registered agent service keeps your personal information off public record.
Complete the Certificate of Formation
The next step is filing the completed Certificate of Formation with the Office of the Judge of Probate in the country where the LLC’s initial registered office is located.
A PDF of the Certificate of Formation is available for download on the Alabama Secretary of State Business Downloads website. This form must be typed. If it is handwritten, it will be rejected.
The Certificate of Formation requires the following information:
- The name of the LLC
- A copy of the Name Reservation Certificate (if filing by mail)
- The name and address of the registered agent
- Signature of the organizer
Who is the organizer?
The organizer is the person or persons authorized to file the necessary paperwork to form the LLC. Being an organizer of an LLC does not guarantee any interest in the company and an organizer is not obligated to make any contributions to the company.
File Your Documents
LLC formation documents can be filed by mail or online.
You must submit the original Certificate of Formation, along with two copies of the document, and the approved Certificate of Name Registration to the Office of the Probate Judge of the county that your Alabama registered agent is located in.
Document Required Info. Pages Copies Signor Certificate of Formation Name of LLC, name and address of statutory agent, signature of organizer 2 3 Certificate of Formation Organizer Approved Certificate of Name Registration N.A. 1 1 N.A. N.A. Made Out To Amount Check or Money Order #1 Alabama Secretary of State $100 Check or Money Order #2 Office of the Probate Judge Varies by County
For an additional $100, you can expedite your mail filing. Expedited filings are processed within 24 hours of receipt.
If you complete the LLC formation online, both the Certificate of Name Reservation and Certificate of Formation can be submitted–and paid for–online, at the same time.
To form your LLC online, you can visit the Alabama Secretary of State Online Services website.
Once your LLC is formed, it is a good idea to print several copies of the filed Certificate of Formation for your records.
How can I contact the Alabama Secretary of State?
You can contact the Alabama Secretary of State via phone, fax, and email.
Phone: (334) 242-5324
Fax: (334) 240-3138
Draft and Finalize an Operating Agreement
Once your Alabama LLC is officially formed, you should draft and finalize an operating agreement. Although an operating agreement is not required by Alabama law or filed with any governmental agency it is very important.
The operating agreement outlines information regarding topics such as, but not limited to:
- The rights and responsibilities of members and managers
- The management structure
- How to become a member
- What happens when a member dies
If your LLC does not have an operating agreement, and the entity ends up in court, it will be subject to the default Alabama LLC statutes. These default laws may not serve the best interest of your company. It is smart to preemptively outline the rules and regulations of your LLC–just in case.
Obtain an EIN
An Employer Identification Number is a unique nine-digit number that is issued by the Interval Revenue Service for federal tax purposes. If you are planning to open a business banking account, complete transactions, or hire employees, you are required to obtain an EIN. The process is simple and free. Visit the IRS website for more information.
Apply for Any Necessary Business Permits of Licenses
Business licenses and permit requirements vary between profession and jurisdiction in Alabama. It is a good idea to check and see which ones you will need to operate. The “Alabama Department of Labor: Labor Marketing Information Division Career Resource” is a good place to start. This guide lists all occupations that require licensing and resources for how to obtain a license or permit. In Alabama, your LLC can provide professional services as long as you have the correct licenses to do so.
File Your Annual Report & Tax Returns
In Alabama, LLCs are required to file an annual report (commonly referred to as “Form AL-CAR”) with the company’s annual text return. The company’s first tax return is due two and a half months after the company is formed. After that, the annual reports and tax returns are due annually on April 15th.
How will my LLC be taxed
In Alabama, LLCs are subject to a business privilege tax. The amount of this tax is based on the total amount of income that was passed through the company to the members of the LLC. There is, however, a $100 minimum tax for all LLCs in Alabama regardless if the company was profitable. If you choose to have your LLC taxed as a C-corp, it will be subject to Alabama’s 6.5% corporate tax rate. A C-corp is a tax classification that allows an entity to be taxed as a corporation would.
What is a disregarded entity?
A disregarded entity, also known as a pass-through entity, is not taxed at the federal level. Instead, all of the profits go through the company, without being taxed, to the members and are then taxed as personal income.
What is the difference between an S-corp and a C-corp?
“S-corp” and “C-corp” are tax identifiers used by the IRS for federal tax purposes. S-corps and C-corps are not different types of corporations.
An S-corp is taxed as a disregarded entity, whil a C-corp is taxed as a corporation.
However, an S-corp is subjected to different rules and regulations. For example, an S-corp can only have up to 100 shareholders, must be a domestic company, and can only issue one class of stock. Before you decide what kind of tax entity you want your LLC to be taxed as, you should consult with an accountant or business attorney to make sure your choice is right for your company.
We’re still here.
You can still hire Alabama Registered Agent LLC to form your LLC in Alabama for $435 today.
Where can I learn more about Alabama Business Law?
To learn more about Alabama Business law, you can read the Alabama Business and Nonprofit Entities Code online at the Alabama Legislature website.
LLC Management Structure
As far as the management structure of an LLC, it is up to the forming members to decide what is best for the company. Member-managed LLCs vest all decision-making power equally in the members of the LLC (unless otherwise outlined in the operating agreement). A manager-managed LLC places all decision-making power in a manager or group of managers. In most states, LLCs without operating agreements that state otherwise are, by default, assumed to be member-manager.
Who is a member of an LLC?
LLCs can either be single-member or multi-member. Becoming a member of an LLC requires consent of all current members, unless a membership process is otherwise outlined in the operating agreement. Members an LLC are not obligated to make any contributions to the LLC to become a member.
Who is considered a manager of an LLC?
A manager of an LLC is an individual (or entity) that has been elected by the members of an LLC to oversee the financial and operational happenings of the company. A manager of an LLC can also be a member of the same LLC, although it is not required.