How to form an LLC in Alabama – Step by step guide.

This guide will show you on how to form an LLC in Alabama, forming an LLC can be easy. While a Limited Liability Company can be formed in a few easy steps we always recommend using the services of professionals, we recommend LegalZoom, they can set all of this up for you for only $149 plus any state fee.

1. Find a name for your LLC

The first and most important step in forming an LLC is to find a name. Start by doing some research and make sure the name you choose is suited for the business you want to begin and is easily to identify by your clients.

There are naming guidelines in Alabama! Your entity name must contain one following words: “Limited Liability Company”, “L.L.C” or “LLC”. Also, keep in mind that there are also some words that are restricted to be part of the name, for example “Bank”, “Banc”, “Banque”, or licensed individuals like “Doctor”. It is possible to have restricted words but they require additional paperwork. Basically, make sure your name does not confuse people with any federal or state agency.

Make sure your name is not taken in Alabama. Navigate to the State of Alabama  website and do a name search to determine if your name is not being used by another entity. If your name is available, you must complete the name reservation online with the Alabama  Secretary of State.

Find the perfect URL name as well. Check that the name you give your LLC is also available as a domain name, obviously this is not a legal requirement but it is nice to have. Even if you are not planning on setting up a website now, buying the domain name will prevent other from taking it from you and it is also very inexpensive. Having a domain will also give you the ability to set up branded email addresses, eg. [email protected]

2. Pick a Registered Agent

It is mandatory to nominate a Registered Agent in Alabama.

What is a Registered Agent? A registered agent, or also called “resident agent”, is the person designated by an LLC to officially receive documents from the state and in some cases to be served should the LLC ever be sued. Other important documents this person will receive includes annual state filings.

A registered agent must be a resident of Alabama  or a corporation officially authorized to do business in Alabama . You may elect anyone within your company, including yourself. A physical address must be provided and PO Boxes are not allowed. You might find that using you home address is inconvenient because all LLC addresses become public records.

3. Submit the Articles of Organization

Forming an LLC in Alabama:

Submit the Articles of Organization for a “Domestic LLC”

Download the PDF:
Articles of Organization for Alabama

Nonrefundable $100 fee applies. $100 for expedited services.

Follow the instructions on the form you choose.

4. Draft up an Operating Agreement

Although is not always required it is a good idea to draft up an operating agreement. An operating agreement among an LLC is an agreement that outlines member’s financial and managerial rights and duties. Every LLC should have one. In California, New York, Missouri, Maine, or Alabama it is mandatory to have one.

Hint! LegalZoom provides Registered Agent services, it comes with a private address for LLC documents.

Congratulations at this point you have formed your Limited Liability Company, but wait…there’s more.

5. Obtain an Employer Identification Number

You must obtain an Employer Identification Number (EIN). An EIN, also known as a Federal Tax Identification Number, is a nine-digit number assigned by the IRS. The IRS uses this number to identify your company for tax purposes, think of it as a Social Security Number for your LLC.

What is an EIN for? An EIN is necessary in order to open bank accounts, for tax purposes, hire employees, among others.

 

To apply for an EIN the business owner need to submit a form to the IRS after forming the LLC, it is free of charge, and it can be done by:

Applying online

or

Printing and mail in this form.

Follow the instructions on the form you choose.