The very first thing to do is ensure that the name you’d like isn’t already taken, doesn’t contain restricted words, or is too similar to another name under the eyes of state law. Before doing anything else, use the Alabama Business Entity Search system to check, and if there are potential trademark issues conduct another quick search using the TESS System through the U.S. Patent Office.
A couple other points: make sure you have ‘LLC’ at the end of your company name or one of the other accepted forms, and keep in mind that you can also file a Domestic Entity Name Reservation form for a $10 fee (with expedited delivery options at higher-fee prices as well).
Every Alabama company must select a Registered Agent to represent their LLC to receive and help to handle legal paperwork like all state filings & important business forms, legal notices, etc.
Basic requirements are that this agent be an Alabama resident/company with an Alabama street address. That said, you can hire an outside professional and pay up to $160/year, or get a Registered Agent free when you start the LLC with a filing service like IncFile or CorpNet.
Most states have you file your Articles of Incorporation to the Secretary of State, but in Alabama you file a Certificate of Formation with the Judge of Probate Court Office through mail in the county where your LLC’s office address is located. The Probate Court then forwards the form to the Secretary of State together with the filing fee.
Filing Fee: $100 to the Sec. of State and a separate fee for the Probate Court
The next step to forming an Alabama LLC is to obtain an EIN, or Employer Identification Number, which is a unique social security-style number for your brand so you can open business bank accounts, file state/federal taxes, hire employees, etc. Most business activity is tracked using this number so it’s not optional by any means.
The EIN can be obtained for free directly through the IRS Website.
An Operating Agreement may not be a legal requirement when you start a business, but it’s recommended that you draft one for your business because it officially lays out operation procedures and the fine details of ownership. It’s about protecting you, your team, and the brand’s LLC status.
If you need help drafting customized form, check out Rocket Lawyer’s LLC Operating Agreement tool. Many people find it helpful if they don’t have a lawyer and aren’t working with an LLC filing service.
No Alabama LLC would be complete without its own, unique, branded business account. And it’s not all about the perks banks are offering these days, but security, making tax time far easier, and being able to completely separate this data from any personal or outside data.
Can you use the same bank you currently bank at on a personal level? Sure, but you may want to do a little shopping around to see who has the best perks and deals. We’re fans of Capital One and Chase.
Obviously this is groundwork you can’t neglect. To do so means you risk unexpected fees, fines, and so forth. Instead, do what it takes to understand and get right under Alabama state tax laws as early to conception as possible.
To get started yourself bookmark the Birmingham district office of the Small Business Administration, and the Dept. of Revenue’s Business Licensing section because they’re likely going to be go-to sources for a variety of things along the way. If you need help, look into professional Business License Research packages that takes care of all the document-sourcing legwork.
Every business has a plan of some sort, from basement whiteboards to scribble-infested hard copy paper. However, when it’s time to get serious a professional business plan is the only way to go. This is the framework, the blueprints, the game plan!
There are free very basic templates available, you could take business planning classes, or try a business plan software which help you tackle each component, from marketing & demographics to management & financials.
QUICK LINKS TO BUSINESS PLANNING
If you want your LLC to be taken seriously, build a professional website. While there are tons of options, to keep this article relatively simple we’ll just say that Wix and Weebly are a couple of the best platforms for the non-tech savvy entrepreneurs.
Do you need a complex mind-blowing website? No, probably not. But there needs to be something people can engage with and use to investigate your brand. Either way they both business website builders offer free trials and are very easy to use.
Note that this article on how to form an LLC in Alabama isn’t a legal document or legal advice. It’s for informational purposes and the information above is subject to change. For specific legal questions regarding how to form an LLC in Alabama or business in general, please consult with a lawyer or other accredited professional.