Form A Limited Liability Company in Alabama

Name Your LLC

 

The first thing you need to do is name your LLC.   You must make sure that the name of your LLC is original, and you can do so by checking Alabama’s Secretary of State Business Entity Search website to determine if the name is available.  Names must contain “Limited Liability Company” or “Limited Company” or an abbreviation thereof, such as L.L.C. or LLC.  The company name must also not confuse your LLC’s name with known government entities such as the FBI or CIA.

 

Names must be reserved at the time of incorporation and can be done so through the Alabama Secretary of State Name Reservation website or by filing out and mailing in the required form.

 

 

Articles of Organization and Registered Agent

 

Next you are required to fill out the Domestic Limited Liability Company Certificate of Formation form.  In the Articles of Organization you must assign a registered agent, which must be a person or business designated by your new company.  It cannot however, be the new company, but may be a person within the company.  The purpose of a registered agent is to have one person in charge of officially receiving papers or important documents on behalf of the company, such as service of process for a lawsuit, during normal business hours.  The registered agent must have an Alaska State address or be authorized to conduct business in Alaska.   This agent will be designated in the Articles of Organization.  There are companies who provide the service of being a registered agent for other companies.

 

The original and two copies of the forms should be filled out filed in the county of the LLC’s registered office is located.  The filing fees are noted on the forms and will be collected by the County Probate judge.  The address of the each County Probate Judge can be found here.

 

 

Operating Agreement

 

It is recommended (but not required in Alabama) that you also file an Operating Agreement with the State, which will be the governing agreement between the members or co-owners of the LLC. (See this article that talks briefly about how the Operating Agreement protects members of the LLC.)  There are many free Operating Agreements that can be obtained online, but it is recommended that you contact your local counsel to draft a custom operating agreement that is tailored to your situation and business needs.

 

 

Post Filing Requirements

 

In Alabama LLCs must file an Initial Business Privilege Tax Return and Annual Report with the Department of Revenue within 2 ½ months of incorporation.

 

To operate a business successfully in the United States LLCs must have an EIN, which is a Federal Tax identification Number.  An EIN is obtained free of charge from the IRS after a company is formed. This number tracks the business entity and allows the IRS to properly assess and collect taxes, similar to the way a social security number does so for citizens.   Business owners can apply online for an EIN, or print the necessary form and mail it in.  Companies should figure out their State tax obligations at SBA.gov.

 

Depending on the type of business that your LLC will operate, certain business licenses or local permits are required by each state for its operation.  In addition, there are many employer requirements for insurance, employment eligibility verification, income tax withholding, and other reporting requirements depending on your state.  Contact your local counsel or employment specialist to determine which of these requirements you must fulfill.

 

 

Photo by: Jason Ross