The are several steps to follow to correctly form a limited liability company (LLC) in Alabama. These include selecting a name, filing a Certificate of Formation in your county, appointing a registered agent, preparing an optional operating agreement and paying a county fee of $200. Once all paperwork is filled and registered with the Alabama Secretary o State, a new Alabama LLC is created. The guide below provides step by step instructions for creating a LLC in Alabama and get your business up and running.
Step 1. Select a name for your LLC
Step 2. Appoint a Registered Agent
Step 3. File the Certificate of Formation
Step 4. Prepare an Operating Agreement
Step 5. Obtain an EIN
Step1. Select a Name for Your LLC
Choosing a company name is the first and most important step of forming an LLC in Alabama. Be sure to choose a name that complies with Alabama naming requirements and is easily searchable by potential clients.
1. Follow the naming guidelines:
According Alabama law an LLC’s name must include words “limited liability company” or one of its abbreviations (LLC or L.L.C.). The name may not include any words that could cause the LLC to be confused with a government agency, nor can it imply it is established for a purpose contrary to that identified in the articles of organization.
The LLC must be distinguishable from the name of any other Alabama limited liability company, corporation, limited partnership, or registered limited liability partnership on file with the Alabama Secretary of State.
If you include the words Bank, Attorney, Doctor, Lawyer, or any other restricted words, you may be required to file additional paperwork and obtain a special license.
Restricted words (e.g., Bank, Attorney, University) may require additional paperwork
2. Check to see if the name is available.
The last thing you want to do is register a name that is already being used by another entity. Use the Business Entity Search tool on the Alabama Secretary of State’s website to check name availability.
3. Reserve the name.
You can reserve your LLC name by filing your LLC formation documents online or by mail with the Secretary of State. After filing your name, you’ll receive your name reservation at the end of the process as long as it’s available.
You can also submit a Name Reservation Request Form for Domestic Entities form by postal mail to the Alabama Secretary of State’s office. Again, before submitting the form, make sure your name is available by performing a business entity search on the Alabama Secretary of State’s business name database.
Note: In your Articles of Organization you can use a trade name, or “DBA” (Doing Business As), instead of using your LLC’s official legal name. To establish a DBA, simply starting using the name or file an Application to Register Trade Name in Alabama with the Secretary of State by mail for a fee of $30. (Registration of a DBA in Alabama is not required by law but puts other business at notice.)
Step2. Appoint a Registered Agent
Alabama LLCs are required to appoint an agent of service of process, more commonly known as a Registered Agent. The registered agent can be either an individual or business entity that is responsible for accepting legal papers, tax documents, notice of lawsuit or other government corrspondence on behalf of the LLC. You can find a list of registered agents on the Alabama Secretary of State website.
You may also elect someone in your company—including yourself—to be the registered agent for your LLC.
Step3. File the Certificate of Formation
You can file the Certificate of Formation by postal mail with the Office of Judge of Probate in the county where your LLC is registered. The probate court will file the form and provide you with a certified copy. The court then transfers the certificate of formation to the Secretary of State of Alabama. To find the correct probate judge for your county visit the Alabama Secretary of State: Probate Judges web page.
You must provide the following information in the Certificate of Formation.
- Name of the LLC
- Name and address of the registered agent
- Designation of the LLC (series LLC, non-profit LLC, or professional LLC)
- Effective date of the LLC
- Authorized signature (by organizer or attorney-in-fact.)
Before filing the Certificate of Formation by postal mail, you’ll need to mail in the a completed Name Reservation Request for Domestic Entities. A few weeks after mailing in the Name Reservation Request for Domestic Entities form, you should receive by return mail a name reservation certificate. Now, mail in the name reservation certificate with with your Certificate of Formation to complete the filing. The mailing address is:
Secretary of State
P.O. Box 5606 M
Montgomery, Alabama 36103-5616
The fee for filing the Certificate of Formation is $200.
The Alabama Certificate of Formation can also be filed online with the Alabama Secretary of State Online Services. Note: Not all counties support online filing.
If you currently have an LLC and are looking to conduct business in the state of Alabama, you’ll need to form a foreign LLC. Forming a foreign LLC enables your company to operate in the state of Alabama. The application for formation of a foreign LLC can be completed online or by postal mail by filling out the Foreign Limited Liability Company (LLC) Application for Registration form and mailing it to:
Office of the Secretary of State
P.O. Box 5616
Montgomery, AL 36103
Step4. Prepare an Operating Agreement
An Operating Agreement is not required to form an LLC in Alabama, but is highly recommended. The operating agreement—in Alabama referred to as a limited liability agreement—is a legal document establishing ownership interests and operating procedures of the LLC. It outlines the rights and responsibilities of LLC members and managers. The operating agreement also helps show the LLC is a fully separate business entity whereby preserving the limited liability of its members. When an operating agreement is not created, the LLC falls under the governing laws of Alabama pertaining to LLC operations.
Step5. Obtain an EIN
If you’re forming an LLC with more than one member, you’ll need to obtain an EIN (Employer Identification Number) from the IRS. For single member LLCs, an EIN is not required unless the LLC elects to be taxed as a corporation instead of a sole proprietorship. An EIN can be obtained by completing an online EIN application provided by the IRS. There is no fee to apply for an EIN.
While not always required, an EIN helps identify a business for tax purposes and is useful for conducting business. An EIN number is required to set up a bank account, file federal and state taxes, and hire employees.
An EIN can also be obtained by filling out an Application for Employer Identification Number form and mailing it to:
Internal Revenue Service
Attn: EIN Operation
Cincinnati, OH 45999
or fax to: (855) 641-6935