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how to form an LLC in Alabama Alabama is an excellent place to form a new LLC with the third-lowest tax burden in the country Alabama boasts inexpensive labor and a great cost of living every state has slightly different requirements for forming an LLC follow along closely to learn the required steps for creating your own limited liability company in the state of Alabama there are two ways to form an LLC in Alabama you can form one yourself or you can hire a service to do it for you let's start by looking at the five basic requirements to form an LLC and Alabama on your own you can also find these steps and more detail on our website linked in the description below 1 name your LLC every state has its own rules about what kind of names are allowed for LLC's in general you will need to observe these naming guidelines your name must include the phrase limited liability company for one of its abbreviations LLC or LLC with a period following H letter restricted words such as Bank Attorney law office etc may require additional paperwork and may also need a licensed professional to be part of the LLC your name cannot include words that could confuse your LLC with a government agency such as FBI Treasury State Department etc you cannot use a name that has already been registered to see if your name is available in your state you'll need to do a name search this free service is available on your state's Secretary of State website check out our free guide for finding the direct link to your state we also recommend that you check to see if your business name is available as a web domain even if you don't plan to make a business website today you may want to buy the URL in order to prevent others from requiring it to choose a registered agent Alabama requires that you nominate a registered agent for your LLC who is your business's point of contact with the state the registered agent can be an individual within the company including yourself or you can hire a professional service authorized to do business in Alabama they will send and receive legal papers on your behalf these documents include official correspondence like legal summons and document filings which your registered agent will receive and forward to you your registered agent will help remind you to file the Cerie reports failure to properly maintain your LLC can result in fines and dissolution so this assistance is valuable 3 file the certificate of formation to register your Alabama LLC you will need to file the certificate of formation with the state of Alabama this can be done online or by mail whether filing online or by mail you will have to pay a fee to the probate county judge on top of the other filing costs the exact fee varies by county so contact your local probate office for more information you should also decide whether your LLC will be member managed or manager managed member managed means all members of the LLC manage the company this is good for small organizations where everyone is involved in the day-to-day operations the second option is manager managed where individuals are appointed to manage the LLC this is appropriate for larger organizations where not everyone is involved in the day-to-day affairs of the business for create an operating agreement although not every state requires it you should always create an operating agreement to establish ownership terms and member roles for your LLC this foundational document is the core of your LLC and will help you maintain your organization as well as further establish your LLC is a separate legal entity there are six main sections of an operating agreement organization outlines when and where the company was created who the members are and how the ownership is structured management and voting addresses how the company is managed as well as how the members vote capital contributions covers which members financially support the LLC and how more funds will be raced in the future distributions outlines how the company's profits and losses are shared among members membership changes describes the process for adding or removing members as well as if and when members can transfer their ownership shares and dissolution which explains the circumstances in which the LLC may be dissolved an operating agreement is an internal document it does not need to be filed with the state however it should be updated every time there is a change in membership or management at the company you can download a free sample operating agreement or create a custom one using our free operating agreement tool at how to start an LLC com 5 obtain an EIN lastly you'll need to get an employer identification number or ein from the IRS also known as a federal tax identification number your EIN is like a social security number for your LLC and is how the IRS tracks your business for tax purposes an EIN is also necessary to open a business banking account and legally hire employees Aeons are free of charge and can be obtained from the IRS online or through the mail and with that you will have formed an Alabama LLC on your own option to hire professional service the second way to create an Alabama LLC is to hire professional service to create your LLC for you hiring a professional service to file your forms and act as your registered agent for the LLC will cost you an additional fifty to one hundred and fifty dollars however there are several benefits to working with a pro a higher registered agent helps with getting your reports filed on time helps you stay organized by keeping your business mail separate and is available at all regular business hours to accept official mail and legal papers on your LLC's behalf a final and important additional benefit of using a service is privacy a professional service will provide a level of privacy by withholding your personal name and home address from the LLC's contact information there are many reasons why you might not want your personal information easily accessible and associated with your business hiring a professional LLC for mation service is an easy way to accomplish this now that you've seen the different requirements in ways you can form an LLC in Alabama visit our site and take some time to research your options and establish a solid foundation for your business activities click on the links in the description below to research the top five professional formation services or get more information on how to form an Alabama LLC on your own now you know all the steps to form an LLC in your state for a more detailed guide go to how to start an LLC com you can also create an operating agreement and use our business plan tool free of charge give the video a like if you found it useful and subscribe if you'd like to see more and if you have questions or encounter any roadblocks leave a comment below good luck and starting your small business you
Thanks for your comment Willard Tuzzio, have a nice day.
- Carmen Sacre, Staff Member
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 Johnathan your participation is very much appreciated
- Carmen Sacre
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I've studied ceramic engineering at Irell and Manella Graduate School of Biological Sciences in Duarte and I am an expert in mississippian culture. I usually feel rushed. My previous job was traffic administrator (freight & passenger) I held this position for 27 years, I love talking about digital hoarding and furniture building. Huge fan of Kevin Hart I practice cycling and collect baseball cards.
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