Alabama LLC

How to Start an LLC in Alabama

Many entrepreneurs choose to form an LLC in Alabama because they can enjoy the protections of larger corporations without some of the limitations. They can separate their business liability and debts from their personal liability. This article will explain how you can set up your own LLC in Alabama in a few simple steps.

Name your Alabama LLC

All LLCs in Alabama must have a name that makes it easy to differentiate them from other businesses. This name must be reserved before you can file your Certificate of Formation. Your name can include the name of one of the members of your LLC. However, it cannot be very similar to that of an existing company or use words which are associated with government agencies, such as "Treasury". For example, if you try to get "Mary's FBI Security" approved for your security company, you'll probably be asked to change it.

If you're in certain sectors, such as medicine, you must submit copies of your license and other documents before you will be allowed to use terms that are associated with your profession. For example, if your name is related to banking, you'll require a letter from the Alabama Banking Commissioner's office.

Similarly, if an existing company is called, "Rick's Kayak Adventures LLC", your company is unlikely o be approved if you call it "Ricks Kayak Adventure Limited Liability Company". These names are too similar and could cause someone who is suing the previous company to send documents to you instead.

It's better to avoid problems by ensuring that your name is unique. You can search the Alabama Secretary of State's database for free, right from your home or office. A Name Search will return all of the existing businesses that have names that are similar to the one you would like to use. If you don't find any and meet all the other naming criteria, it's likely that your filing will be approved.

In Alabama, all LLCs must clearly indicate their business structure.

Select A Registered Agent

A registered agent is a person or business that can accept legal document on your behalf. They are also allowed to send documents for your LLC and serve as a point of contact between your LLC and the government. If the Secretary of State's office wants to send documents to you, they will send it to your registered agent in Alabama.

Your registered agent cannot use a P.O. box. They must use a physical address and be able to receive legal documents during regular business hours. If a person is nominated as your registered agent, they must be at least 18 years old. The name of your registered agent and address of your registered office should be included when you are filing your Certificate of Formation.

File your Certificate of Formation

Each LLC in Alabama is created via a Certificate of Formation. In Alabama, you must obtain a Certificate of Name Reservation from the Secretary of State before you file the documents that form your new limited liability company. Your Certificate of Name Reservation should be submitted along with your Certificate of Formation. You can file online, in person or by mail.

The cost of filing for domestic LLCs is $2000 and payment should be made to the Alabama Secretary of State. A foreign LLC filing costs $150. It can take up to 14 business days for your filing to be approved and then, you can apply for your Employer Identification Number (EIN}. If you want to hire employees or need a business bank account, you should get an EIN.

Create an Operating Agreement

Your LLC in Alabama may have one member or several members. In either case, it's a good idea to create an operating agreement. With a single-member LLC, this demonstrates that your business is separate from you. With a multi-member LLC, your operating agreement establishes the ownership and business agreement among the members of the LLC.

Your operating agreement says who is responsible for managing the business every day. It also describes the responsibilities of each member. It gives details on voting rights and how any profits or losses from the business will be allocated among the members. This means that conflicts can be resolved more peacefully if they arise.