How to Form an LLC in Alabama

Step-by – Alabama LLC Instructions

This guide to setting up an LLC in Alabama offers step-by, detailed instructions on how you can file for formation, get tax IDs, set up company records, and more.

Overview

LLCs are the most common business structure. They are cost-effective, flexible, and easy to operate. The legal formation of an LLC allows you to establish your business, limit your personal liability, and gives you tax flexibility. You will find the steps below helpful as you complete this process.

1. Check Alabama Name Availability

   Your LLC’s legal title may not conflict or be used in conjunction with another registered name. Conduct a name look to verify availability. Your name must not be identical to any other business entity.

   Name Search	Alabama Secretary-of-State – Business Services Division Name searching
   Suffix:	The words “Limited Liability Company”, or the abbreviation L.L.C. or “LLC”. These words and their abbreviation will be the last words of your name. AC §10A-1-5.06

   Next, examine the availability of your chosen name against trademarks registered at the Alabama Secretary of State and the USPTO.

   Alabama Trademark:	Alabama Secretary-of-State trademark search
   Federal Trademark:	USPTO trademark searches

   The final step is to use common sense and search the public domain for your desired business name. The common law rights to a domain name arise from its actual use, not registration. You can search the internet, telephone directories or trade magazines for business and professional license records.

2. Get a name reservation

   Alabama’s name reservation law is mandatory.

   Send an email to:	Alabama Secretary of States http://www.sos.alabama.gov/
   Filing Method	Post, courier, or on-line . Fax and email cannot be accepted.
   Fee:	$10 mail standard processing. $25 mail within 3 business day processing. $28 online 24hr processing
   Turnaround:	Standard mail: within the order received. Expedited Mail: In order received within 3 business days. Online: In less than 24 hours
   Notes:	We recommend filing online. The state will issue you a Certificate of Formation and a Name Reservation Certificate. A license is required to be able to use a profession in a name (e.g., engineering).

3. Hire a Registered Agent

   Before you can officially file to form your Alabama LLC you need to choose who your is. Registered agents are appointed by a business as their legal representative to receive legal and government notices.

   A registered agent is required by law in every state. When you file Alabama articles, an agent must be named.

   This is what our registered agent service can do. You get:

   • Dothan office offers same-day document delivery
   • Instant online access for state forms with our address.
   • Annual fees for all states starting at $89 to $99 with no additional charges

4. Alabama Articles of Organization

   Alabama calls the articles or organization “certificates of formation”. You can use this document to form a limited-liability company.

   You can either fill out the paperwork yourself or hire an LLC formation service. The average state filing fee to form an LLC is around $100.

   Agency:	Alabama Secretary-of-State – Business Services Division
   Form:	Domestic LLC Certificate for Formation
   Filing Method	online and mail.
   Agency Fee	$100 + minimum $50 Office of the Judge of Probate charge + optional $100 expedite cost
   Turnaround:	Approximately 7-10 business day at the probate office. Otherwise, it will take 6 months to get your documents from the secretary of State.
   Law:	Code of Alabama. Title 10A – Alabama Business and Nonprofit Entities Code. Chapter 5. Limited Liability Companies
   Notes:	Send two signed copies and one original to the Office of the Judge of Probate of the local county where the corporation will be registered. Include $100 for the state filing fee, plus the applicable fee for your county (minimum 50). Ask your Office of the Judge of Probate. Attach your Name Reservation Certificate.

5. Establish Company Records

   Your LLC must maintain accurate records and books. Your LLC’s documents begin with your filed articles. Your LLC will produce other official records like:

   • Minutes of a meeting
   • Operating agreement
   • EIN verification letter
   • Amendments and other filings made during the LLC’s lifetime

6. Sign the Operating Agreement

   The which is the governing text for the LLC, can be created (potentially using an example template). This agreement defines the details of how the LLC will be run, including holding an annual meeting. The agreement will then be approved by you at your organizational meeting.

7. Host the Organizational Meeting

   This will be the first meeting of LLC members. For this meeting to take place, you will need your operating agreement and filed articles of organization. Keep a log of the meeting, and keep them in your company record books.

8. Get a Federal Employee Identification Number (EIN).

   A is needed if the LLC has more than one owner or hires employees. It is common to need an EIN in order to open a bank accounts.

   Agency:	Internal Revenue Service
   Form:	IRS SS-4
   Filing Method	Mail, phone or fax
   IRS fee	$0
   Turnaround:	Instantly online or by phone 4 business day by fax. 4-5 weeks by postal mail
   Notes:	The IRS website can only be accessed during specific hours. Print your EIN to close your session. For additional guidance, visit IRS Pub1635: Understanding Your.

9. Get Alabama State Tax Identification Numbers/Accounts

   Alabama offers a state-wide tax registration application.

   Send an email to:	Alabama Department of Revenue http://revenue.alabama.gov/
   Form:	Form COM-101: Alabama Department of Revenue Combined Registration/Application
   Filing Method	Mail or Online
   Fee:	$0
   Turnaround:	Online Orders Take Approximately 3-5 Business Days

10. Prepare the Initial Business Privilege Tax Report

    Alabama Code SS40-14A-2 requires all LLCs to file an initial Business Privilege Return and to pay the tax within two and a half months of being formed.

    Submit to	Alabama Department of Revenue http://revenue.alabama.gov/
    Form:	BPTIN: Initial Business Privileges Tax Return
    Instructions:	Instructions for Preparation of Alabama Department of Revenue Alabama business privilege tax initial privilege tax return
    Filing Method	Mail
    Fee:	Minimum $100

11. Consider Electing C-Corp taxation or S-Corp taxation

    Your LLC automatically receives pass through taxation. The vast majority of LLCs however, keep this tax category. Some LLCs have the option to choose S-Corporation or C-Corp tax treatment.

    • C-Corps have double taxation. Members pay taxes on the profits of the corporation, while members pay taxes when they receive their distributions. C-Corps can offer lower tax rates to retained earnings, if you have more than $250,000 in profits per owner or you will re-invest the majority of your profit back into the business. .

12. Get business licenses & permits

    The necessary licenses or permits are required in order to operate your business legally. Searching by business type and location using the Small Business Administration Business License & Permit search tool is the easiest way to navigate through the vast array of federal, state and local requirements.

    Alabama Business Privilege Certificate

    Agency:	Alabama Department of Revenue-Business Licensing Section
    Law:	Alabama Code SS 40-12-2
    Notes:	Although licenses are required by law, they can only be issued at county level. For more information contact the relevant county probate judges’ office.

     

13. Keep your LLC afloat with ongoing filings

    Federal and state tax returns must be filed.

    For good standing with the secretary, many states require business entities to file an annually required report. See the table below for information on Alabama LLCs.

    Alabama Corporation Annual Report Requirements:

    NOT REQUIRED