{"id":21839,"date":"2021-07-31T15:27:15","date_gmt":"2021-07-31T15:27:15","guid":{"rendered":"https:\/\/boostsuite.com\/?page_id=21839"},"modified":"2024-08-27T05:50:21","modified_gmt":"2024-08-27T09:50:21","slug":"alabama","status":"publish","type":"page","link":"https:\/\/boostsuite.com\/how-to-start-an-llc\/alabama\/","title":{"rendered":"How to Start an Alabama LLC"},"content":{"rendered":"\n<p>If you\u2019re here, then you\u2019re either considering forming an LLC in Alabama or you\u2019ve already made the decision to form an LLC. Congratulations! Forming an LLC is an exciting time for any company, and it\u2019s a decision that you\u2019ll remember for the rest of your life. No matter what your reason is for seeking information about Alabama LLCs, I\u2019m going to teach you everything you need to know about forming a Limited Liability Company (LLC) in Alabama.&nbsp;<\/p>\n\n\n\n<p>Some of the things I\u2019ll touch on in this article are how to start an LLC, some of the reasons that other small business owners choose to form a Limited Liability Company, the pros and cons of forming an LLC on your own without professional services (like a registered agent or formation service), and more. Armed with all this information, you\u2019ll not only be able to make an informed decision about whether you want to form an LLC, but you\u2019ll have the knowledge to go through with it if you decide an LLC is the right fit for your company.&nbsp;<\/p>\n\n\n\n<p>(If you want to skip to the &#8220;How to Form an LLC&#8221; section, click <a href=\"https:\/\/boostsuite.com\/how-to-start-an-llc\/alabama\/#How_To_Start_An_LLC_In_Alabama\">here.<\/a>)<\/p>\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_69 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #212121;color:#212121\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #212121;color:#212121\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/boostsuite.com\/how-to-start-an-llc\/alabama\/#What_Is_an_Alabama_LLC\" title=\"What Is an Alabama LLC?\">What Is an Alabama LLC?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/boostsuite.com\/how-to-start-an-llc\/alabama\/#Why_Choose_an_LLC\" title=\"Why Choose an LLC?\">Why Choose an LLC?<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/boostsuite.com\/how-to-start-an-llc\/alabama\/#1_Limited_Liability_and_Asset_Protection\" title=\"1. Limited Liability and Asset Protection\">1. Limited Liability and Asset Protection<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/boostsuite.com\/how-to-start-an-llc\/alabama\/#2_Privacy\" title=\"2. Privacy\">2. Privacy<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/boostsuite.com\/how-to-start-an-llc\/alabama\/#3_Taxation\" title=\"3. Taxation\">3. Taxation<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/boostsuite.com\/how-to-start-an-llc\/alabama\/#How_to_Start_an_LLC_in_Alabama\" title=\"How to Start an LLC in Alabama\">How to Start an LLC in Alabama<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/boostsuite.com\/how-to-start-an-llc\/alabama\/#1_Obtain_Certificate_of_Formation_Form\" title=\"1. Obtain Certificate of Formation Form\">1. Obtain Certificate of Formation Form<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/boostsuite.com\/how-to-start-an-llc\/alabama\/#2_Choose_Your_Business_Name\" title=\"2. Choose Your Business Name\">2. Choose Your Business Name<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/boostsuite.com\/how-to-start-an-llc\/alabama\/#3_Choose_an_Alabama_Registered_Agent\" title=\"3. Choose an Alabama Registered Agent\">3. Choose an Alabama Registered Agent<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/boostsuite.com\/how-to-start-an-llc\/alabama\/#4_Choose_Your_LLC_Address\" title=\"4. Choose Your LLC Address\">4. Choose Your LLC Address<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/boostsuite.com\/how-to-start-an-llc\/alabama\/#5_Sign_and_File_Your_Certificate_of_Formation\" title=\"5. Sign and File Your Certificate of Formation\">5. Sign and File Your Certificate of Formation<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/boostsuite.com\/how-to-start-an-llc\/alabama\/#Other_LLC_Activities\" title=\"Other LLC Activities\">Other LLC Activities<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/boostsuite.com\/how-to-start-an-llc\/alabama\/#Alabama_LLC_Fee_Summary\" title=\"Alabama LLC Fee Summary\">Alabama LLC Fee Summary<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/boostsuite.com\/how-to-start-an-llc\/alabama\/#After_Starting_Your_Alabama_LLC\" title=\"After Starting Your Alabama LLC&nbsp;\">After Starting Your Alabama LLC&nbsp;<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/boostsuite.com\/how-to-start-an-llc\/alabama\/#Step_1_Create_an_Operating_Agreement\" title=\"Step 1. Create an Operating Agreement\">Step 1. Create an Operating Agreement<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/boostsuite.com\/how-to-start-an-llc\/alabama\/#Step_2_Apply_For_an_Employer_Identification_Number\" title=\"Step 2. Apply For an Employer Identification Number\">Step 2. Apply For an Employer Identification Number<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/boostsuite.com\/how-to-start-an-llc\/alabama\/#Step_3_Open_a_Business_Bank_Account\" title=\"Step 3. Open a Business Bank Account\">Step 3. Open a Business Bank Account<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/boostsuite.com\/how-to-start-an-llc\/alabama\/#In_Summary\" title=\"In Summary\">In Summary<\/a><\/li><\/ul><\/nav><\/div>\n\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_Is_an_Alabama_LLC\"><\/span>What Is an Alabama LLC?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>An Alabama LLC is a Limited Liability Company formed in the state of Alabama that is governed by the laws, regulations, and statutes of the state of Alabama.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Why_Choose_an_LLC\"><\/span>Why Choose an LLC?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>There are lots of benefits to forming an LLC, many of which you\u2019ll discover on your own over time. But there are three key reasons that small business owners choose Alabama LLCs over other business structures like corporations (C corp or S corp) or sole proprietorships. Here are the most common reasons small business owners choose to form a Limited Liability Company.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"1_Limited_Liability_and_Asset_Protection\"><\/span>1. Limited Liability and Asset Protection<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>As the owner of an Alabama LLC, you cannot be held responsible on a personal level for the debts and liabilities of your LLC. This is one of the main reasons that small business owners choose LLCs over another type of business structure like a corporation (S corp or C corp), and it\u2019s easy to see why.&nbsp;<\/p>\n\n\n\n<p>Let\u2019s say your Alabama business falls victim to some sort of calamity like lawsuits or bankruptcy. In these or other scenarios, if you\u2019ve formed a Limited Liability Company (LLC), then your Alabama LLC\u2019s creditors can\u2019t list your personal assets (like your car, house, personal finances, or any other personal assets you\u2019ve acquired) as financial compensation for the debt owed to them by your LLC.&nbsp;<\/p>\n\n\n\n<p>Times are tough, and if there\u2019s anything that all the stressful events have taught us, it\u2019s that even the biggest, most prepared businesses can be toppled overnight by an unexpected event or natural disaster. Having the extra protection that comes from forming an Alabama LLC is enough to bring peace of mind to many small business owners.&nbsp;<\/p>\n\n\n\n<p>If you encounter some financial or legal problems with your company and have to go out of business, of course, you\u2019ll take a financial hit. But the good news is that if you form an LLC you won\u2019t also lose your personal assets, so you won\u2019t be homeless as well, for instance. Having the extra protection that comes from forming an LLC is enough to bring peace of mind to many small business owners.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"2_Privacy\"><\/span>2. Privacy<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>When you form an LLC in Alabama there are options available to you to ensure that your personal information is protected, which is another reason that many small business owners choose to form Alabama LLCs.&nbsp;<\/p>\n\n\n\n<p>You may wonder why your information would be at risk and why it\u2019s such a big deal to protect it. It\u2019s of vital importance because cybercrime is more commonplace in our technology-based world than in previous years. Cyber criminals are so adept at what they do that they can steal your identity with the smallest bits of information that most people would consider insignificant (like your name and address) and use it to accrue thousands of dollars of debt under your name. And the scariest part is that they can do it so quickly you may not even notice until it\u2019s too late.&nbsp;<\/p>\n\n\n\n<p>By choosing a business structure like a sole proprietorship, C corp or S corp or a partnership, you forfeit your ability to secure your personal information. Owners of these business structures are required by law to register their names and addresses with the Alabama Secretary of State. The Alabama Secretary of State then lists the information on their website and makes them available on the public record. Anyone with access to the internet can find the information by searching the website of the Secretary of State. This means that cyber criminals can easily access your personal information and your desire to keep it from them is irrelevant.&nbsp;<\/p>\n\n\n\n<p>When you form an LLC, you\u2019ve got the option to keep your information off the public record and protect it by hiring an LLC formation service.&nbsp;<\/p>\n\n\n\n<p>LLC formation services are a type of professional service, part of whose job is to provide their information to the Alabama Secretary of State instead of yours, among other services that help you form and establish your Alabama LLC. As the owner of the LLC, you\u2019re allowed to maintain ownership of your Limited Liability Company and keep your information off the public record this way, which is a win-win situation for you.&nbsp;<\/p>\n\n\n\n<p>The two LLC formation services I recommend the most often are <a href=\"https:\/\/boostsuite.com\/reviews\/northwest-registered-agent\/\">Northwest Registered Agent<\/a> and <a href=\"https:\/\/boostsuite.com\/reviews\/zenbusiness\/\">ZenBusiness<\/a>.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"3_Taxation\"><\/span>3. Taxation<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Another reason that small business owners\u2019 decisions are swayed towards forming an LLC in Alabama is the federal tax benefits that Alabama LLCs receive.&nbsp;<\/p>\n\n\n\n<p>If you choose to form a corporation instead of forming an LLC, you\u2019re going to quickly learn about a thing called \u201cdouble taxation.\u201d&nbsp;<\/p>\n\n\n\n<p>Here is a brief description of double taxation. Corporate profits are all charged a corporate income tax. Then the profits, which have already been taxed, are distributed to the corporate shareholders as dividends. Dividends are taxed as well. So the corporate profits are taxed twice before shareholders even receive them, thus double taxation.&nbsp;<\/p>\n\n\n\n<p>If you form an Alabama LLC then you won\u2019t have to worry about double taxation.&nbsp;<\/p>\n\n\n\n<p>The income of your LLC in Alabama will be taxed at company rates and can then be distributed to LLC members in the form of personal income. Of course, personal income is taxed, but the taxes are not automatically deducted from this income upon receiving it. LLCs typically don\u2019t pay federal taxes initially.&nbsp;<\/p>\n\n\n\n<p>The only additional tax on your Alabama LLC comes in the form of a Business Privilege Tax. The Business Privilege Tax is based on the amount of money that is dispersed to the members of your LLC in Alabama (rather than taxes based on profits of the company), with a minimum charge of $100.<\/p>\n\n\n\n<p>There\u2019s one more tax benefit your LLC will enjoy.&nbsp;<\/p>\n\n\n\n<p>When the Tax Cuts and Jobs Act was introduced in 2017, it established something called the \u201cQualified Business Income Deduction\u201d or QBID. QBID gives LLCs a 20% tax discount. This discount is exclusive to LLCs, which is an excellent reason to form an LLC.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_to_Start_an_LLC_in_Alabama\"><\/span>How to Start an LLC in Alabama<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>You now have a good understanding of what a Limited Liability Company is, as well as the reasons a small business owner would choose to form an LLC in Alabama. Now I can explain how to form an Alabama LLC if you\u2019re still confident that an Alabama LLC is the right fit for your Alabama business. Here are the five steps to forming an LLC in Alabama.&nbsp;<\/p>\n\n\n\n<p>*IMPORTANT* If you\u2019d like to skip a lot of the work involved with forming an LLC, or you\u2019d like someone to guide you through the red tape, form filing, and legal jargon, there is a professional service for just that. They\u2019re called an LLC formation service and they can help you get through the process of establishing your LLC smoothly.<\/p>\n\n\n\n<p>Many formation services are inexpensive and charge fees as low as $0 plus the state filing fee. They will help you submit applications and pay the filing fees necessary to establish your business in Alabama. (However, one of my favorite LLC formation services is <a href=\"https:\/\/boostsuite.com\/reviews\/zenbusiness\/\">ZenBusiness<\/a> and they charge $49 plus the state filing fee.)<\/p>\n\n\n\n<p>For additional guidance on selecting the best LLC formation service for your Alabama LLC today, check out my guide on <a href=\"https:\/\/boostsuite.com\/llc\/\">the Best LLC Formation Services<\/a>.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"1_Obtain_Certificate_of_Formation_Form\"><\/span>1. Obtain Certificate of Formation Form<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The first step you\u2019ll need to complete on your quest to form an Alabama LLC is to get your hands on a Certificate of Formation form. In Alabama, this Certificate must be filed with the Office of the Judge Probate, not the Secretary of State. You must file the Certificate by mail to the Office of the Judge Probate in the same county as the initial registered office for your LLC. The court will proceed to send the Certificate, along with your $100 filing fee, to the Secretary of State. You will also be required to pay a filing fee to the County Probate Court, which varies by county but is typically no less than $50.<\/p>\n\n\n\n<p>You\u2019ll also need to ensure that a copy of your Name Reservation Certificate is attached to your Certificate of Formation when you file them.<\/p>\n\n\n\n<p><a href=\"https:\/\/www.sos.alabama.gov\/sites\/default\/files\/2021-03\/DomesticLLCFormation.pdf\" target=\"_blank\" rel=\"noopener\">This<\/a> is a PDF version of the Certificate of Formation form and it\u2019s the primary form that you\u2019ll need to file with the Office of the Judge Probate to form your Alabama LLC.<\/p>\n\n\n\n<p>The following steps will refer back to the Certificate of Formation form.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"2_Choose_Your_Business_Name\"><\/span>2. Choose Your Business Name<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The next thing you\u2019ll need to begin forming an LLC is a Name Reservation Certificate.<\/p>\n\n\n\n<p>Alabama requires all LLCs to reserve their names before filing any of their LLC formation documents. You can do this online via the Alabama Secretary of State\u2019s <a href=\"https:\/\/www.alabamainteractive.org\/sos\/welcome_nameReservation.action\" target=\"_blank\" rel=\"noopener\">website<\/a> for a $28 fee, and you\u2019ll receive the reservation immediately once you finish the process. You can also use a <a href=\"https:\/\/www.sos.alabama.gov\/sites\/default\/files\/2021-03\/domesticEntityNameReservation.pdf\" target=\"_blank\" rel=\"noopener\">Name Reservation Request Form for Domestic Entities<\/a>, which you can file by mail for a fee of $10. You should still check the Secretary of State\u2019s website for name availability using the <a href=\"https:\/\/arc-sos.state.al.us\/CGI\/CORPNAME.MBR\/INPUT\" target=\"_blank\" rel=\"noopener\">business name database<\/a> before submitting this form.<\/p>\n\n\n\n<p>Before deciding on a name, it\u2019s important to know that the Alabama Secretary of State requires all businesses and LLCs in the state to have unique names. This means LLC names that are already in use won\u2019t be available, similar to creating a screen name for an online account. You can check the business name database on the Alabama Secretary of State website here to find out whether the name you want to use for your business in Alabama is available.<\/p>\n\n\n\n<p>Under Alabama state law, LLCs are required to have the words Limited Liability Company or the abbreviation LLC or L.L.C. in their name. Your LLC\u2019s name may not include language that implies that it was organized for reasons not outlined in your Certificate of Formation.<\/p>\n\n\n\n<p>If the name you\u2019ve had to register wasn\u2019t to your liking, you can use a Doing Business As (DBA) name, also known as a fictitious name or a trade name.<\/p>\n\n\n\n<p>A trade name or fictitious name is the name that you\u2019ll use for all your LLC\u2019s advertisements and signage. To do this in Alabama, no registration is required. You can simply use the trade name you have in mind. However, you can register your LLC\u2019s trade name with the Alabama Secretary of State in order to let other businesses know the name is in use in Alabama.&nbsp;<\/p>\n\n\n\n<p>Here\u2019s the <a href=\"https:\/\/www.sos.alabama.gov\/sites\/default\/files\/form-files\/trademark-files\/lat-4.pdf\" target=\"_blank\" rel=\"noopener\">Application to Register Trade Name<\/a> in Alabama that you\u2019ll need to file. The state filing fee is $30, and you must file it by mail.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"3_Choose_an_Alabama_Registered_Agent\"><\/span>3. Choose an Alabama Registered Agent<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The next step you\u2019ll need to take on the path to LLC formation is to appoint an <a href=\"https:\/\/boostsuite.com\/best-registered-agent\/alabama\/\">Alabama registered agent<\/a>. This process is important because your registered agent\u2019s name and address are required information for your Certificate of Formation.<\/p>\n\n\n\n<p>Finding a registered agent in Alabama isn\u2019t difficult. The Secretary of State's website provides a list of several registered agents authorized to provide business services in Alabama.<\/p>\n\n\n\n<p>There are several services that an Alabama registered agent must provide as a professional service, such as becoming the point of contact for your business during normal business hours to accept mail and service of process from the Alabama Secretary of State, the Alabama Department of Revenue, and other official state offices and providing your LLC with a registered office address in the state of Alabama.&nbsp;<\/p>\n\n\n\n<p>There are professional registered agent services that will fulfill the legal requirements of your LLC. These registered agent services will guarantee that you receive service of process, mail, and legal documents and protect your personal information. Registered Agent Services cost anywhere from $99\u2013$299 per year.&nbsp;<\/p>\n\n\n\n<p>If you choose to perform the registered agent duties for your LLC yourself, you should know that you\u2019re taking a lot of risks. Because you must provide the name and address of your registered agent to the Secretary of State, if you\u2019re the registered agent your information will be listed on public record as the registered agent for your business. This leaves you vulnerable to cybercrime.&nbsp;<\/p>\n\n\n\n<p>You could also miss service of process or other important mail which could mean that you\u2019re not only unable to defend against legal actions taken against your business, but you could lose your business if the Secretary of State finds that you\u2019re not complying with registered agent requirements because you simply didn\u2019t receive the important mail or documents. Because of this, I <em>always<\/em> suggest the use of a registered agent service for new LLCs.&nbsp;<\/p>\n\n\n\n<p>If you want to use a registered agent service to keep your personal information off the public record and give you peace of mind, you can read my guide on the <a href=\"https:\/\/boostsuite.com\/best-registered-agent\/alabama\/\" data-type=\"page\" data-id=\"20451\">best Alabama registered agent service<\/a>.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"4_Choose_Your_LLC_Address\"><\/span>4. Choose Your LLC Address<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Another bit of important information you\u2019ll need to include on your Certificate of Formation form for your LLC is the address. The street address you list on your LLC\u2019s Certificate of Formation form will be the one registered with the Alabama Secretary of State, much like the LLC name you list. This means that your LLC\u2019s address will be listed on public record on the website of the Secretary of State. The address you list will become the registered office address for your business and it will be the location that important legal documents and mail from offices like the Secretary of State are sent for your company.&nbsp;<\/p>\n\n\n\n<p>You can use the physical street address of your business, but if it doesn\u2019t have one, you\u2019ll have to use your own home address or office address. But no matter which address you choose to use, it\u2019s worth noting that you can\u2019t use a PO Box address.&nbsp;<\/p>\n\n\n\n<p>The last few things you\u2019ll need to make sure that you list on your Certificate of Formation:<\/p>\n\n\n\n<ul>\n<li>The name and signature of the person organizing your LLC<\/li>\n\n\n\n<li>The name and address of the LLC\u2019s registered agent<\/li>\n\n\n\n<li>Your LLC name<\/li>\n\n\n\n<li>The Name Reservation Certificate of your LLC<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"5_Sign_and_File_Your_Certificate_of_Formation\"><\/span>5. Sign and File Your Certificate of Formation<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The last step to forming your Alabama LLC is to double-check your documents for accuracy and then sign and file the certificate along with the documents.<\/p>\n\n\n\n<p>Make sure when filing that you have obtained the required Name Reservation Certificate, as you\u2019ll need to attach that with your Certificate of Formation. As previously mentioned, the LLC Name Reservation Certificate is a prerequisite to filing LLC formation documents in Alabama.<\/p>\n\n\n\n<p>Once you\u2019ve obtained the copy of your Name Reservation Certificate, you\u2019ll need to make sure that your Certificate of Formation also includes the name and address of your Alabama registered agent. Your LLC\u2019s registered agent must have a registered office in Alabama.<\/p>\n\n\n\n<p>If your LLC won\u2019t begin operation until a specific date, you\u2019ll need to list an \u201ceffective date\u201d on your Certificate. The effective date of your LLC is the date when your business will begin operating, so it\u2019s a pretty important bit of information along with your LLC name and address.<\/p>\n\n\n\n<p>Finally, your LLC\u2019s Certificate of Formation must include either your signature or the signature of an attorney-in-fact. Once all these documents have been signed, their accuracy verified, and all the other steps have been completed, you\u2019re ready to sign and file them. You file your Certificate of Formation with the Probate Court in the county of your LLC\u2019s establishment and they then forward it to the Secretary of State. Here\u2019s a list of <a href=\"https:\/\/www.sos.alabama.gov\/city-county-lookup\/probate-judges\" target=\"_blank\" rel=\"noopener\">Probate Judges<\/a> in Alabama.\u00a0For more information about how long the formation process will take, read <a href=\"https:\/\/boostsuite.com\/how-long-does-it-take-to-get-an-llc\/alabama\/\">How Long Does it Take to Get an LLC in Alabama?<\/a><\/p>\n\n\n\n<p>The fee for filing is $100 plus a County Probate Court fee, which varies by county but is usually a minimum of $50.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Other_LLC_Activities\"><\/span>Other LLC Activities<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Filing your Certificate of Formation for your company won\u2019t be your last official act as an LLC owner. You\u2019ll need to participate in several other business-related activities to keep your Alabama LLC in good standing with the Secretary of State.<\/p>\n\n\n\n<p>You will likely need to obtain some business licenses for your LLC to operate in Alabama, depending on the type of business you will be conducting. You\u2019ll have to check with the county probate office or licensing commission for any local business licenses you may need.<\/p>\n\n\n\n<p>LLCs in Alabama also have to register with the Alabama Department of Revenue if they collect sales tax on goods or services. You can register online at the Alabama Department of Revenue\u2019s <a href=\"https:\/\/myalabamataxes.alabama.gov\/_\/#1\" target=\"_blank\" rel=\"noopener\">e-services website<\/a>.<\/p>\n\n\n\n<p>If you are operating outside of the State of Alabama, you will need to follow the process for establishing a foreign LLC, which is similar to the process described in this article for forming a domestic LLC. The main differences are that when appointing a registered or statutory agent, a foreign LLC must use a registered or statutory agent physically located within the state of Alabama and you must register with the Alabama Secretary of State Business Entities Division.&nbsp;<\/p>\n\n\n\n<p>A foreign LLC will also still have to complete a Certificate of Name Reservation just like a domestic LLC and you can file online or by mail. You can register by postal mail here by submitting two signed original copies of a <a href=\"https:\/\/www.sos.alabama.gov\/sites\/default\/files\/2019-01\/ForeignLLCRegistration.pdf\" target=\"_blank\" rel=\"noopener\">Foreign Limited Liability Company Application for Registration<\/a>. The fees for this are $260 if filed online (link <a href=\"https:\/\/www.alabamainteractive.org\/sos\/introduction_input.action\" target=\"_blank\" rel=\"noopener\">here<\/a>) or $150 if filed by mail.<\/p>\n\n\n\n<p>If you choose to file by mail, send the application form along with your Name Reservation Certificate to:<\/p>\n\n\n\n<p><em>Alabama Secretary of State<br>Business Entities Division<br>P.O. Box 5616<br>Montgomery, AL 36103<\/em><\/p>\n\n\n\n<p>It\u2019s also important to ensure that you pay your <a href=\"https:\/\/boostsuite.com\/how-to-start-an-llc\/alabama\/business-taxes\/\">taxes<\/a> and obtain a Certificate of Good Standing. If you forget or neglect any of these activities, it could result in your business not being legally allowed to continue conducting business in the state of Alabama.<\/p>\n\n\n\n<p>This seems like a lot of paperwork to file, and there\u2019s a good reason for that\u2014it is. If you\u2019d prefer help filing these documents, you should consider hiring an Alabama <a href=\"https:\/\/boostsuite.com\/peo\/\">PEO service<\/a> and subscribing to their <a href=\"https:\/\/boostsuite.com\/best-online-legal-services\/\" data-type=\"page\" data-id=\"22183\">online legal services<\/a>. This should cut back on your document filing workload.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Alabama_LLC_Fee_Summary\"><\/span>Alabama LLC Fee Summary<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><a href=\"https:\/\/boostsuite.com\/how-to-start-an-llc\/cost\/\">How much does it cost to form an LLC<\/a> in Alabama? Whether you\u2019ve chosen to start your LLC on your own or decided to hire an LLC formation service, there are several filing fees and taxes LLC in Alabama will be charged. Here\u2019s a list of some of the taxes and filing fees you can expect to pay for your LLC.<\/p>\n\n\n\n<p><strong>Certificate of Formation:<\/strong> $100 plus $50+ county probate court filing fee&nbsp;<br><strong>Name Reservation Certificate:<\/strong> $28 online, $10 by mail<br><strong>Registered Agent Fee:<\/strong> $99\u2013$299<br><strong>Annual Repo<\/strong>r<strong>t\/Business Privilege Tax:<\/strong> Minimum $100<br><strong>State Personal Income Tax:<\/strong> 2\u20135%<br><strong>State Corporate Income Tax:<\/strong> 6.5%<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"After_Starting_Your_Alabama_LLC\"><\/span>After Starting Your Alabama LLC&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Starting your LLC is only the first step on the path to business success. It\u2019s important that you celebrate this business victory, so do something memorable and enjoyable! But you can\u2019t relax for too long because there\u2019s still work to be done after your LLC is formed.<\/p>\n\n\n\n<p>In Alabama, LLCs are required to file a Business Privilege Tax Return along with their annual report. The Business Privilege Tax Return includes your LLC\u2019s annual report, and both the tax return and the annual report must be filed within three and a half months from the beginning of your LLC\u2019s tax year.&nbsp;<\/p>\n\n\n\n<p>The Business Privilege Tax is a tax levied on all money disbursed to the members of your LLC. Normally, LLCs are considered a pass-through entity. This means that the responsibility of federal tax filing is transferred to the LLC members. Typically, LLCs don\u2019t pay a federal tax on their income.<\/p>\n\n\n\n<p>However, Alabama imposes a tax on the LLC members for the money they receive from the LLC operations. This amount is, of course, based on how much income the LLC passes through to its members, with the minimum amount you can be charged set at $100. All LLCs in Alabama are required to file business privilege tax returns along with their annual report, with the first one being due two and a half months after your LLC is up and running, or the effective date of your LLC, whichever is applicable. To learn about online filing requirements click <a href=\"https:\/\/revenue.alabama.gov\/services\/\" target=\"_blank\" rel=\"noopener\">here<\/a>.&nbsp;<\/p>\n\n\n\n<p>Here are the three other important steps you\u2019ll need to complete after filing your Certificate of Formation.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Step_1_Create_an_Operating_Agreement\"><\/span>Step 1. Create an Operating Agreement<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Alabama LLCs aren\u2019t under any obligation from the State to draft Operating Agreements, but it\u2019s still in your business\u2019s best interest to do so. Without an operating agreement, your LLC\u2019s operations will be governed by Alabama LLC laws and regulations, which may not be ideal for your company.<\/p>\n\n\n\n<p>Think of your business entity like a computer. The LLC functions similarly to the case, protecting the important parts. The LLC Operating Agreement would function as its operating system by establishing procedures for the software (members and\/or managers) and hardware (employees) and how they respond to input.<\/p>\n\n\n\n<p>An Operating Agreement serves as both a contract between LLC members and a list of precise instructions regarding business operations. The Operating Agreement should list every LLC member, before proceeding to establish all the managerial, financial, structural, and operational procedures of your business, along with the effective date of your LLC.<\/p>\n\n\n\n<p>*IMPORTANT* Before drafting the Operating Agreement for your business, decide on whether your business entity will use a single-member or a multimember managerial system.&nbsp;It\u2019s important to have a guide for the delegation of responsibilities and to whom those responsibilities should be delegated. In a multimember managerial system, the managers vote on important business decisions.<\/p>\n\n\n\n<p>An Operating Agreement typically begins with a list of each LLC member. It will then proceed to clarify which members will make high-level business decisions and proceed to list the percentages of ownership, profits, and losses of each member. Your agreement should thoroughly explain the duties of each LLC member as well as their interactions and relationship with each other and each department. Drafting your Operating Agreement in this manner ensures that the LLC members know their roles, which members or departments they should be interacting with, who the managers and superiors are, and the tasks assigned to each of your LLC\u2019s departments in order to reduce internal conflict.<\/p>\n\n\n\n<p>A well-written Operating Agreement should also include procedures to handle an LLC member leaving or a new LLC member joining the business. Many first-time business owners leave this out of their Agreements, but if you add it in then your business will have a clearly written set of instructions about how to proceed if there is a falling out between LLC members. Having clearly written procedures available for these situations is extremely helpful during difficult times or periods of unexpected growth.<\/p>\n\n\n\n<p>The importance of a well-written Operating Agreement becomes clear during the beginning stages of your LLC. It explains the duties of each LLC member, their pay, and provides detailed business operation procedures.<\/p>\n\n\n\n<p>To clarify: Operating Agreements list the specifications for the operation of your business and your business is required to operate according to the guidelines established in your Agreement, so a poorly written Agreement means your business may not experience the kind of growth you anticipated. It\u2019s easy to forget to leave room in the Operating Agreement for things like business growth, change, or innovation. Well-written Operating Agreements enable you to sit back and watch as your business thrives without being confined by vague or confusing instructions, but poorly written Operating Agreements can hold your business back and stifle your growth.<\/p>\n\n\n\n<p>If you haven\u2019t written an operating agreement before, there are services that can help you.<\/p>\n\n\n\n<p>You can get a <a href=\"https:\/\/boostsuite.com\/go\/nwra\/oa\">free template for an operating agreement<\/a> from Northwest Registered Agent\u2019s website. If you need help with the wording of the document, many formation services will draft your LLC Operating Agreement as part of their service package. If you would rather draft the LLC Operating Agreement yourself, consider contracting some online legal services to assist in doing it right the first time.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Step_2_Apply_For_an_Employer_Identification_Number\"><\/span>Step 2. Apply For an Employer Identification Number<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Alabama LLCs with multiple members or that plan to hire employees or open a bank account that is solely for your LLC need an EIN, or an Employer Identification Number. You can obtain an EIN from the IRS, which qualifies your business for certain permits and licenses. Small businesses aren't required to hire employees to get an EIN from the IRS. The EIN is simply an identification number for businesses, much like a Social Security Number or Serial Number.<\/p>\n\n\n\n<p>An EIN is a number used to identify businesses in a similar way that a Social Security Number is used to identify individuals. You can obtain an EIN from the IRS through the Internal Revenue Service (IRS). Applying for an EIN is also surprisingly simple to do as well.<\/p>\n\n\n\n<p>Many LLC formation services found in the State of Alabama will apply for an EIN for your LLC on your behalf as part of their services, which streamlines the entire process. You can also obtain an EIN yourself without the help of an LLC formation service. This can be done by going to the <a href=\"https:\/\/sa.www4.irs.gov\/modiein\/individual\/system-unavailable.jsp\" target=\"_blank\" rel=\"noopener\">IRS website<\/a> Monday\u2013Friday between the hours of 7 a.m. and 10 p.m., fill out, and submit the EIN application<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Step_3_Open_a_Business_Bank_Account\"><\/span>Step 3. Open a Business Bank Account<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The last step you need to take to ensure that your business will succeed is to open a bank account dedicated to business transactions.<\/p>\n\n\n\n<p>Small business owners often overlook this step and will run both business and personal transactions through the same account. They assume that having one bank account will somehow save them trouble, but there are two good reasons you shouldn\u2019t do this.<\/p>\n\n\n\n<p>First, it can be very helpful with tax filing to open a dedicated business bank account. A lot of the small business owners who also use their personal accounts for business purposes mistakenly think they will be able to remember which of their transactions were for personal reasons when it\u2019s time to file federal tax returns. It\u2019s easier when you have a separate bank account for your business because you get a statement that lists all your business transactions on one account.&nbsp;<\/p>\n\n\n\n<p>Second, having a dedicated business bank account maintains your personal liability and asset protection. Running business transactions through your personal account means your personal information and your personal funds in the account can be vulnerable if you are sued. This completely negates the asset protection you receive when you form an LLC.&nbsp;<\/p>\n\n\n\n<p>So opening a bank account dedicated to your LLC will make filing tax returns each year much easier and also maintains your personal asset protection.&nbsp;<\/p>\n\n\n\n<p>You\u2019ll need to obtain a \u201cbank kit\u201d to open a bank account for your LLC. This kit contains certified copies of many of the formation documents you\u2019ve been obtaining so far, such as your Certificate of Formation, EIN, Operating Agreement, and initial resolution.&nbsp;<\/p>\n\n\n\n<p>A lot of LLC formation services in Alabama will create a bank kit for your company as part of their business services, which can save you the trouble of collating these documents yourself.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"In_Summary\"><\/span>In Summary<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Congratulations on your decision to form an LLC in Alabama! This decision was truly a huge step towards business independence.&nbsp;<\/p>\n\n\n\n<p>If you\u2019ve decided to skip using an <a href=\"https:\/\/boostsuite.com\/llc\/\">LLC formation service<\/a> (which can charge fees as little as $0 plus state filing fees), here are the five steps you\u2019ll need to take to form an LLC in Alabama:<\/p>\n\n\n\n<ol>\n<li>Obtain the Certificate of Formation form<\/li>\n\n\n\n<li>Name your LLC<\/li>\n\n\n\n<li><a href=\"https:\/\/boostsuite.com\/best-registered-agent\/alabama\/\" data-type=\"page\" data-id=\"20451\">Choose your Registered Agent<\/a><\/li>\n\n\n\n<li>Choose your LLC address<\/li>\n\n\n\n<li>Sign and file your Certificate of Formation<\/li>\n<\/ol>\n\n\n\n<p>The excessive amount of red tape, stacks of forms to file, applications to fill out and submit (some of which you can file online or by mail), legal jargon, and filing fees necessary to start an Alabama LLC can all feel very overwhelming. But completing this massive workload on your own can leave you with a feeling of accomplishment. This feeling of elation makes it worth all your time and hard work!<\/p>\n\n\n\n<p>Congratulations on your new Alabama LLC and good luck on your business journey!<\/p>\n\n\n<style>\r\n    \/* Style pour le conteneur *\/\r\n    .conteneur {\r\n        border: 2px solid #307FB3;\r\n        \/* Couleur de bordure sp\u00e9cifi\u00e9e *\/\r\n        padding: 10px;\r\n        width: auto;\r\n        \/* Largeur automatique pour s'adapter au contenu *\/\r\n        max-width: 400px;\r\n        \/* Largeur maximale si le contenu est tr\u00e8s long *\/\r\n        margin: 0 auto;\r\n        \/* Centre le conteneur horizontalement *\/\r\n    }\r\n\r\n    \/* Style pour le titre *\/\r\n    .titre {\r\n        font-size: 1.2em;\r\n        font-weight: bold;\r\n        margin-bottom: 10px;\r\n    }\r\n\r\n    \/* Style pour la liste sans bullet point *\/\r\n    .liste-sans-puces {\r\n        list-style-type: none;\r\n        padding: 0;\r\n        margin: 0;\r\n    }\r\n\r\n    \/* Style pour les liens dans la liste *\/\r\n    .liste-sans-puces a {\r\n        text-decoration: none;\r\n        color: black;\r\n        \/* Couleur du texte des liens *\/\r\n        display: block;\r\n        \/* Pour occuper toute la largeur du conteneur *\/\r\n        padding: 5px;\r\n        \/* Espacement entre les liens *\/\r\n    }\r\n\r\n    \/* Style pour les liens au survol *\/\r\n    .liste-sans-puces a:hover {\r\n        background-color: #f0f0f0;\r\n        \/* Couleur de fond au survol *\/\r\n    }\r\n<\/style><!-- Conteneur avec bordure bleue -->\r\n<div class=\"conteneur\">\r\n    <!-- Titre -->\r\n    <div class=\"titre\">Business Management and Compliance Services in the State of Alabama<\/div><!-- Liste sans bullet point -->\r\n    \t<ul class=\"liste-sans-puces\">\r\n       \t\t<li><a href=\"https:\/\/boostsuite.com\/peo\/alabama\/\">Best PEO in Alabama<\/a><\/li>\r\n        \t<li><a href=\"https:\/\/boostsuite.com\/best-registered-agent\/alabama\/\">Best Registered Agent in Alabama<\/a><\/li>\r\n\t\t\t<li><a href=\"https:\/\/boostsuite.com\/llc\/alabama\/\">Best LLC Services in Alabama<\/a><\/li>\r\n\t\t\t<li><a href=\"https:\/\/boostsuite.com\/how-to-start-an-llc\/alabama\/\">How to start an LLC in Alabama<\/a><\/li>\r\n\t\t\t<li><a href=\"https:\/\/boostsuite.com\/how-long-does-it-take-to-get-an-llc\/alabama\/\">How long does it take to get an LLC in Alabama<\/a><\/li>\r\n   \t\t<\/ul>\r\n<\/div><br>\n","protected":false},"excerpt":{"rendered":"<p>If you\u2019re here, then you\u2019re either considering forming an LLC in Alabama or you\u2019ve already made the decision to form an LLC. Congratulations! Forming an &#8230; <a title=\"How to Start an Alabama LLC\" class=\"read-more\" href=\"https:\/\/boostsuite.com\/how-to-start-an-llc\/alabama\/\" aria-label=\"Read more about How to Start an Alabama LLC\">Read more<\/a><\/p>\n","protected":false},"author":3,"featured_media":0,"parent":20481,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"footnotes":""},"featured_image_urls_v2":{"full":"","thumbnail":"","medium":"","medium_large":"","large":"","1536x1536":"","2048x2048":""},"post_excerpt_stackable_v2":"<p>If you\u2019re here, then you\u2019re either considering forming an LLC in Alabama or you\u2019ve already made the decision to form an LLC. Congratulations! Forming an LLC is an exciting time for any company, and it\u2019s a decision that you\u2019ll remember for the rest of your life. No matter what your reason is for seeking information about Alabama LLCs, I\u2019m going to teach you everything you need to know about forming a Limited Liability Company (LLC) in Alabama.&nbsp; Some of the things I\u2019ll touch on in this article are how to start an LLC, some of the reasons that other small&hellip;<\/p>\n","category_list_v2":"","author_info_v2":{"name":"Aaron Kra","url":"https:\/\/boostsuite.com\/author\/aaron\/"},"comments_num_v2":"0 comments","_links":{"self":[{"href":"https:\/\/boostsuite.com\/wp-json\/wp\/v2\/pages\/21839"}],"collection":[{"href":"https:\/\/boostsuite.com\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/boostsuite.com\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/boostsuite.com\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/boostsuite.com\/wp-json\/wp\/v2\/comments?post=21839"}],"version-history":[{"count":14,"href":"https:\/\/boostsuite.com\/wp-json\/wp\/v2\/pages\/21839\/revisions"}],"predecessor-version":[{"id":29549,"href":"https:\/\/boostsuite.com\/wp-json\/wp\/v2\/pages\/21839\/revisions\/29549"}],"up":[{"embeddable":true,"href":"https:\/\/boostsuite.com\/wp-json\/wp\/v2\/pages\/20481"}],"wp:attachment":[{"href":"https:\/\/boostsuite.com\/wp-json\/wp\/v2\/media?parent=21839"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}