How to Get an LLC In Alabama
LLCs are the most popular structure for small businesses in Alabama. That's because starting and running a limited liability company (LLC) is very simple and offers important benefits.
LLCs can protect your personal assets (car, house, savings) if something happens to your business. LLCs also offer credibility and options to save on taxes.
It’s easy to form an LLC in Alabama online yourself. Just follow these steps:
- Name Your LLC
- Choose a Registered Agent
- File the AL Certificate of Formation
- Create an LLC Operating Agreement
- Get an EIN
Forming an LLC in Alabama is Easy
You can start an Alabama LLC online by filing the Certificate of Formation with the Secretary of State. The cost to set up an LLC in Alabama is $200.
Follow our How to Get an LLC in Alabama guide below to get started.
Step 1: Create a Name For Your Alabama LLC
Before you register your LLC, you'll need to come up with a name. Your business name needs to be catchy for branding purposes and legitimate for legal purposes.
We go into depth on this topic in our LLC naming guide. We’ll go over the basics below.
Naming Your LLC
First, brainstorm some possibilities. Use our LLC name generator to get the ideas flowing.
Next, make sure your name meets Alabama guidelines:
- it contains the words limited liability company, limited company, LLC, or L.L.C.
- it doesn't contain restricted words or phrases (these often include words like bank, attorney, and university) without approval
- it's distinguishable from any other entity or trade name registered in Alabama
- full list of Alabama naming guidelines
Next, do an Alabama LLC name search with the Secretary of State to find out if your name is available in Alabama.
Reserving Your LLC Name
If you plan to mail in your LLC registration, you'll need to complete the Name Reservation Request for Domestic Entities form at least 2 weeks prior to registration. If you plan to register your LLC online, you'll reserve your business name when you complete the online LLC registration.
If you don't plan on registering your LLC right away, you can reserve your LLC name online for 1 year.
Is the URL available? Before you commit 100% to a name, check to see if there’s a good web domain available.
We recommend buying your domain right away because even if launching a business website isn’t on your radar right now, it will be soon.
Step 2: Appoint an Alabama Registered Agent
When you file your Articles of Organization, you'll need to list a registered agent.
A registered agent's job is to accept legal documents like service of process and tax notices for your LLC.
Your registered agent can be a person or a registered agent service. You can act as your own registered agent, but many business owners choose to use a registered agent service.
Here are a few things to think about before you decide to act as your own registered agent:
- You’ll need to be available during normal (9 am - 5 pm) business hours at the address you provide
- If you run your business from home, you’ll have to make your personal address public
- You could be served with a lawsuit in front of your family or coworkers
Step 3: File the Alabama LLC Certificate of Formation
It’s time to officially form your LLC by completing an LLC name reservation and filing your Certificate of Formation with the Alabama Secretary of State.
Name Reservation Step
If you're filing the Certificate of Formation online, you’ll complete the name reservation when you complete the online Certificate of Formation.
If you're filing your Certificate of Formation by mail, you’ll need to mail in the Name Reservation Request for Domestic Entities form first. You'll get a name reservation certificate from the state within a few weeks. Then, you'll mail in the approved name reservation certificate with your Certificate of Formation.
Certificate of Formation Step
Recommended: Now is a good time to decide if your LLC will be member-managed vs manager-managed.
You'll need to know the following information to complete the form:
- Entity Name
- Copy of the Name Reservation certificate from the Alabama Secretary of State (If filing by mail)
- Registered Agent Name and Registered Office Address
- Type of LLC being formed (conditional)
- Effective Date
For more detailed help with completing the form, visit our Alabama Articles of Organization guide.
Mail Your Articles of Organization:
Send the form and payment (payable to the Secretary of State) to:
Secretary of State
PO Box 5616
Montgomery, AL 36103
How long does it take to get an LLC approved? LLC processing time is 10 days online or by mail, but can be expedited for an additional fee.
Step 4: Create an Alabama LLC Operating Agreement
Creating an Alabama LLC operating agreement (also known in the state as a limited liability company agreement) is the only way to legally lock down your LLC’s management and ownership structure. Having this document in place will give you something to return to if a dispute or lawsuit arises.
Even single-member LLCs benefit from having an operating agreement.
Your operating agreement should outline the following:
- Each member’s responsibilities
- How new members will be admitted
- How existing members may transfer or terminate their membership
- How profits and dividends will be distributed
You can add as many provisions as you want, as long as they don't conflict with Alabama business law. Take a look at our What is an Operating Agreement guide to learn more.
Download a template or create a custom Free Operating Agreement using our tool.
Step 5: Get an EIN
An Employer Identification Number (EIN) is like a Social Security number (SSN) for your company. The IRS and the state of Alabama will use this number to track your business activity.
Your EIN will come in handy when it’s time to:
- Open a business bank account
- File Federal and State taxes
- Hire employees
The best way to get an EIN for your LLC in Alabama is by using the free online application on the IRS website.
Read our Get an EIN guide for instructions.
Steps After Forming an LLC
After forming your LLC, it's important to:
- Open a Business Bank Account. A business bank account legally separates personal finances from business finances. This separation is required to maintain your LLC's corporate veil (your limited liability protection).
- Research Alabama Business Licenses and Permits. For help, visit our How to Get a Alabama Business License guide. There are also business license services that can help.
- File Your Alabama LLC Annual Business Privilege Tax Report. File by mail with the Alabama Department of Revenue. For instructions, read this guide from the Alabama Department of Revenue.
Need Help Forming an LLC?
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