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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 Domingo You, have a nice day.
- Towanda Boone, Staff Member
ready to incorporate an llc in alabama but unsure where to begin today you will learn about the most common ways to start your business including the correct forms you'll need how to register your llc critical naming requirements and all other important tips and tricks then as a bonus later on in the video i will reveal to you a trustworthy registered agent who will help set up your llc for free so make sure to stick with me until the end alabama llcs are cost effective and easy to set up the state of alabama like other states has several specific llc requirements there are three main ways you can start an llc in alabama first is the diy or do-it-yourself process where you mostly depend on alabama state's website the second way is hiring a professional service that practically offers more efficiency and security in the process of creating your llc while the third one is hiring an attorney we will skip the attorney hiring portion because that's expensive and most business owners won't need that service first let's take a look at the steps required for starting an llc on your own step one name your business before anything else you will have to think of the llc's legal business name each llc in alabama must have a distinct llc name that is not currently in use you must include the terms limited liability company or an abbreviation such as llc you cannot include phrases such as a corporation which would lead people to believe you are a different business organization knowing if your business name is taken or not is very easy just go to google and type in the words business entity records alabama secretary of state and click the first search result i also have the link in the description below for your convenience it will lead you to a landing page of business entity records in alabama scroll down a little and you will see some search options which makes checking the availability of your business name easier generally you can click the first option entity name and type in your business name for example i am typing a very common business name here car wash express which will give you a list of existing business names a unique business name will say no match is found just like this random name i typed in step 2 alabama requires llc to have a registered agent an agent has a physical address a po box is not allowed and is available during business hours this agent will serve as the llc's primary point of contact for receiving key legal papers tax warnings summons subpoenas and so on you can register yourself or someone in your company but i highly recommend getting a professional registered agent as they have more knowledge by protecting your company in cases of possible cracks while i agree that family members or friends are reliable enough to be trusted as your llc's agent you are more comfortable sleeping at night knowing that your agent is professional and trained to manage legal documents to avoid problems concerning court schedules filing reports with the secretary of state etc besides hiring a professional registered agent is not expensive in fact there are companies who offer a free registered agent as part of your package when you form your llc through them inc file is a company i recommend which has this free service inc file offers a free registered agent on your first year of signing up for their service during that free year you can already take advantage of a professional and trained agent to receive legal documents on your behalf a dashboard where you can always access these correspondences that your agent has received as well as email notifications and automatic forwarding whenever your registered agent receives documents step 3 filing the alabama llc certificate of formation after that you must file the certificate of formation with the alabama secretary of state's business entities division and the office of the judge of probate to officially incorporate a domestic alabama limited liability company the alabama state filing cost for llc's is two hundred dollars for domestic llcs and 150 dollars for foreign llcs what's the difference good question basically a domestic llc means that you are already a resident of alabama and you want to build a business in alabama foreign llc on the other hand is for people living outside alabama but wants to start a business or a franchise of their business in alabama with that said most businesses would be applying for a domestic llc you can file the certificate of formation online or by mailing it to the secretary of state expect the llc certification process to take approximately two weeks step four prepare an operating agreement now an operating agreement is a good idea to have in place with the other members if your llc has more than one member although a limited liability company operating agreement is not necessary for alabama your operating agreement should clarify how your company or business will handle big picture issues such as allocating earnings and losses and dissolving the company your operating agreement should also cover the transfer of membership interest profits or losses and distributions initial investments decision-making powers voting rights and management and lastly dissolving the business step 5 obtain an ein an ein or employer identification number is a federal tax id issued by the irs your ein is used by them to readily identify your firm and tax filings all alabama firms pay a business privilege tax and the state requires you to have an ein to file you may also be required to provide your ein when opening a bank account or applying for municipal permits or licenses obtaining an ein is a slightly longer process compared to their previous steps i'm sure you know anything to do with the irs is confusing this is another reason why getting a professional registered agent is way more convenient as they can do this for you as part of their service now let's talk about the second option to form an llc and that is hiring a professional formation service professional formation services do all the steps you should be doing on your own from filing necessary forms to acting as your registered agent you usually have to allocate a specific budget for this option as i already mentioned earlier inc file is one of the best companies out there to help you form your llc you can click on the link in the description to get access to this deal inc file is one of a kind as it offers a free package with services such as preparing and filing your articles of organization well you still have to pay 237 dollars for the state fees which you would have to do anyway if you chose the diy option but looking at the bigger picture all other companies will still charge their service fee on top of state filing fees inc file does not collect this fee this plan already includes a free registered agent for your first year of subscription and 119 dollars annually moving forward if you decide to continue the service after the first year inc files next packages are the gold and platinum packages which both have package fees already on top of the 237 dollar state fee each package has its own set of servic
Thanks Jacob your participation is very much appreciated
- Towanda Boone
About the author
I've studied moral psychology, descriptive ethics, value theory at Wisconsin School of Professional Psychology in Milwaukee and I am an expert in carcinology. I usually feel weird. My previous job was sales representatives (agricultural products) I held this position for 7 years, I love talking about craft and hacky sack. Huge fan of Lucas Til I practice wrestling: freestyle and collect radio premiums.