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Written by : Devin Bazin
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today we're talking about how to set up an llc in alabama my name is eric and in this video i'm going to show you three different methods that you can go about doing this so if you want to go the diy route and do it yourself or pay a little bit more money and have an attorney help you but i'm also going to have a tip on how you can actually get a free consult with an attorney if you do plan on going that route but more important than how you do it is making sure you're doing it correctly so if you're not familiar with terms such as piercing the corporate veil registered agent or commingling funds i'm going to be explaining all three of these terms and why they're important for making sure you have a legit llc now to get started let's talk about the first way you can set it up if you were to go to google and just kind of google something like alabama file llc the first organic listing here is the state website now taking a quick look at this probably one of the first things you notice is the secretary of state the 200 filing fee there are other fees actually associated with this beyond this because if you look down here it says uh as far as the procedures you must obtain a certificate of name reservation and when you click on this link here you'll notice that there's an additional 25 dollar processing fee for getting the name reservation so now you're up to 225 and then there's fees like for paying for credit card really you're going to be paying somewhere around 225 to 240 in fees to get your llc set up as of making this video there is no way around that if you go through an attorney they may bake it into their fees but you are going to pay the state of alabama a minimum of 225 to set up your llc more likely after all your fees are included probably around 237 now if you go back here you may be wondering too what's the difference between a domestic llc filing and a foreign llc filing if your business is located in alabama you have an alabama state address you're gonna be setting up most likely a domestic llc but let's say that you had a business that was in texas you would have a domestic llc in the state of texas but then you may get a foreign llc in the state of alabama the reason some businesses would do that is they're doing business inside of texas but perhaps they do business outside of their state in alabama and they want additional protection so they set up a foreign llc in alabama in addition to their domestic llc in texas hopefully that makes sense 95 of people you're just gonna be setting up a domestic llc so before i show you how to file the llc uh pdf here i just know in the description below are links to all the resources mentioned in this video most of those are free resources if it was an affiliate link i'll mark it as a paid link but i just want to make you aware that those links and resources are all available for you below so i'm going to click on this pdf here and when this opens up here a lot of information you got to fill out on your own the problem that i have with a lot of the state websites is they don't do the greatest job of educating you as you're going through the process and a good example of that is the registered agent as you recall the beginning of this video we mentioned you know we're gonna be talking about that a lot of people don't know what the registered agent does for your llc and they may make a mistake in who they choose to be the registered agent so one of the things i want to talk about before i get to registered agent is exactly what is an llc what an llc does um a lot of people get confused they think there might be some tax benefit to setting it up there is not it's simply for limiting your liability so you can think of your business right you have your business assets it could be furniture it could be your office space all sorts of things as far as your business assets and then you have your personal assets that could be your personal home car personal bank accounts what an llc does is it draws a division between your business assets and your personal assets so if unfortunately if you were ever sued what's going to happen is they can come after your business assets but not your personal so you get sued they're not coming you know and getting your car out of your driveway at home but what that attorney suing you is going to try to do is pierce the corporate veil that's some legal jargon basically saying they're trying to find cracks in your llc and saying this is not a legit llc and they're going to erase that division the corporate veil between your personal and business assets and try to come after not just your business assets but your personal assets as well one of the ways they may try to do this is if you don't have a proper registered agent so what exactly is a registered agent there's a good article on this on ink file if you're not familiar with ink file it's an online legal tool to set up your llc and if we scroll down here they got a little checklist of what your registered agent does for you it's official letters and correspondence from your secretary of state service of process notices which is basically if you were to be sued making sure you're getting the proper documents showing up in court and those things official federal government correspondence information notifications tax forms and requests for payments and requests to complete permits company filings or reports basically a registered agent is a third party that is in your state they must have a state address and they're making sure that you're dotting your eyes and crossing your t's and doing everything you're supposed to be doing from a document standpoint or annual reports and filings so that's the issue that i have with the state website is sometimes people might say you know what my cousin that lives down the street lives in the state i'm gonna have him be my registered agent but that person doesn't actually know what they're doing and they may actually make it so that there's a crack in your llc because they didn't do something they were supposed to do so i always recommend to have a professional registered agent handle these duties and tasks for you so that's why i don't really love the the state website is it just doesn't do a great job of educating you and holding your hand as you're going through the process now if you were to go through a tool such as ink file the interesting thing about it is when you land on here it says that they've helped over 500 000 businesses or they've launched over 500 000 businesses since 2004 but as you scroll down it's as little as zero dollars plus state fee so the state fee we already talked about but you're probably wondering like how does a service like this do this for zero dollars well i'm gonna get to that right now if you were to click launch my business uh what you'd do is you'd go to llc and alabama and as i mentioned earlier there's a link in the description as well for inc file and uh you can see the silver package here it's 237 one-time payment but the package fee is zero dollars and then the 237 as you can see here that is all going to the state this is just a
Thanks for your comment Zonia Ip, have a nice day.
- Devin Bazin, Staff Member
hey y'all my name is Rob drum her estate broker and real estate investor here in Birmingham Alabama I read a blog at rob drum about us where I do a lot of market analysis and stories about our market real estate investing all that today I'm going to tell you how I opened an LLC in Alabama I'm not an attorney I don't pretend to be an attorney I'm not giving legal advice and I don't even recommend that you do what I did but I had some agents that I work with ask me how I opened my entity my LLC and so I told them I'd make a video and show them exactly how I did it it might save you a little bit of money but it's kind of a lot of effort and I don't know if it's worth doing it this way but here's what I did so there's four steps reserved your name with the Alabama Secretary of State filed the Articles of Incorporation with fallibilist Secretary of State and then go and get an EIN number from the IRS and then you take all that and you open a bank account so that right there pretty much lays it out I'm gonna go into more detail but if you you know can just all the directions and kind of figure things out and you can take those four steps and stop the video right here but we'll get into it I'll show you exactly which screens you want to go to and hopefully not take up too much of your time here so first you go reserve the name that's a is the website for Alabama Secretary of State check the good business services name reservation menu name reservation non-subscriber they're gonna hit you for $28 and then you just kind of follow the screens enter all the information that you want they've got specific instructions for how you can name your LLC what it needs to contain or not contain and I'll show you it's that Secretary of State website business services name reservation menu name reservation and here's what I tell you you know what your costs are gonna be twenty eight bucks for nonsubscribers you're probably not a subscriber so I'm not so Secretary of State fees a hundred bucks and then you're also gonna get where I'm trying to remember depending under County they may or may not have a filing fee for the county somewhere in the range of 30 to 60 bucks so you're all-in fee on this is gonna be under 200 depends on which county you're in and if you want an expedited processing or how you're going about this so you just click non-subscriber and then you just give them your information and this is gonna reserve your name for the new entity and once you've done that it'll kind of follow you through the fields and kind of transition you straight into filing your Articles of Incorporation when I was looking at this earlier it looked like it may be possible now to e-file your articles and not have to go up to the courthouse to do it um but I haven't done that so I don't can't really speak on it but it looked like that was something they were trying to offer um so let's go back to this filing the Articles of Incorporation these are I'll show you how to get to this form but it may just you may be able to just continue from doing your name reservation straight into it but you'll go to the same Secretary of State website click business forms make sure you go to limited liability company and then download this form right here domestic LLC's certificate of formation and read the instructions very carefully because there's a lot in there and it tells you exactly what you need to do and you just need to follow the instructions and then you take that to the probate court you want to register your entity so let's see what this looks like Secretary of State website business services business forms then you just scroll down to the heading I guess it's not this having domestic corporations you're doing an LLC so you want limited liability companies and then there it is domestic LLC certificate of formation and here's the form kind of scary-looking but I just filled it out myself you want to read all these instructions because there's a lot in there it's a lot of instructions there so I think you they ask you for your the name of your company and that should match up to the name reservation that you already made and then they ask you who's filling out the form registered agent that's I recently had to change mine but I just was my own registered agent but you could have an attorney be a registered agent I wouldn't mess with all this without consulting an attorney probably because I don't know what all that is and and you pretty much just fill all this out they tell you how to pay where to send the money and that's pretty much all there is to this form I mean once you follow the instructions on how to file it how to get it get it registered so then you've got everything registered with the state that you need now you need to get legal with federal government and the IRS and it's probably easiest just to walk you through their website because it's a little trickier there's lots of fun stuff you can do here but what we want to do is file business and self-employed employer ID number and then right here you tell them apply for an ein and then you tell them again apply online now and then they take you to this website and there's a lot to read here to definitely read through all this we were doing LLC they tell you a lot about LLC's how they work this you're getting into some tax stuff as far as the number of people in your LLC the state where you're registered this is stuff that you want to have a conversation with the CPA about the treatment of your LLC but as far as getting it open you know you can go ahead and put um put just yourself for however many members you have so that'll just walk you through you know they ask you all this stuff there's four address but what you end up with is a form that says here's your new entity number four tax filing purposes and you're officially official with the IRS so you take those two things and take them to your local banker I would recommend using a community bank that works with small businesses I've had a lot of success with that and it's somebody who's gonna be able to support you and what you're doing locally so they're gonna you basically take on your Articles of Incorporation in your EIN and they can give you a bank account for your new entity if you have anything if you have multiple members or if you have anything that's complex as far as ownership operating responsibilities financials I would definitely not try to write that operating agreement yourself I would would take that to an attorney and he'll help you not only write it but think through how everything is gonna work in your new company that's I have not tried to do that myself and I wouldn't and and honestly at this point I don't know if I would try to create a new entity this way but that's how I've done it a couple times and so if you want to is how you do it at that point you're in business get to work and all for the races so thank you for watching this hopefully it helps you if you're looking to start a entity in the state of Alabama my name again is Rob drum I'm a real estate broker here and he XP Realty and I'll put my information in my contact informat
Thanks Ronnie your participation is very much appreciated
- Devin Bazin
About the author
I've studied high-performance computing at Tri-State Bible College in South Point and I am an expert in classical archaeology. I usually feel bittersweet. My previous job was poets and lyricists I held this position for 21 years, I love talking about pyrography and art. Huge fan of Russell Brand I practice cycling: mountain bike) and collect stamps.
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