How To File the Alabama LLC Certificate of Formation
The process of launching a new business in Alabama is an exciting time for any entrepreneur, but often overwhelming. For many, starting a Limited Liability Company (LLC) is at the top of the list of things to get done, but hiring an attorney may be out of the question because of the cost.
Worry not! Here, I’ll dive into how you can form an LLC yourself, without spending a dime on legal fees.
Filling out the Alabama Certificate of Formation in 8 Steps
To form an LLC in Alabama, the Alabama Certificate of Formation needs to be filed with the Alabama Secretary of State. The Certificate of Formation (also referred to as the Articles of Organization in many states) is the official document that is filed with the Alabama Secretary of State to establish a Limited Liability Company.
Unlike most states that allow you to form an LLC online through the Secretary of State, the only option to file the Alabama Certificate of Formation is by submitting a form to the Alabama Secretary of State.
To get started with filing the Certificate of Formation, visit the Alabama Secretary of State’s website to download the form.
Zenbusiness and IncFile are running a special where you only pay state fees for your LLC formation!
Step 1: Pick a Name for the LLC
The first step in forming an LLC in Alabama, is choosing a unique name for your business that is not already being used by another company. To find out if your business name is unique, first, do an Alabama LLC name search on the Secretary of State’s name database to see if your desired name is available.
The name of an Alabama Limited Liability Company must also include one of the following entity designators at the end of the name:
– Limited Liability Company
– L.L.C.
– LLC
Another unique requirement by the state of Alabama is that before filing the LLC Certificate of Formation paperwork, a Certificate of Name Reservation will need to be submitted to the Alabama Secretary of State. A copy of the filed Certificate of Name Reservation must be attached to the Certificate of Formation before sending it to the Alabama Secretary of State.
The Certificate of Name Reservation can be filed by mail or online. The Alabama LLC Name Reservation Request Form can be filled by mail or online (available immediately), and will cost $25-$28.
Step 2: Appoint a Registered Agent
A registered agent is a person or an entity with a physical address in Alabama who is available during normal business hours to serve as a central point of contact to receive important legal documents, tax notices, summons, subpoenas, etc. on behalf of the LLC. Every Alabama is required to have a registered agent.
The registered agent must be 18 years or older and can be the business owner, a resident of Alabama with a physical address, a legal entity, or a registered agent service.
The registered agent’s address has to be a physical street address since a PO Box isn’t allowed.
In this section, enter the name of the registered agent, their registered office address in the state of Alabama, county, and a mailing address should routine letters need to be sent to a different address.
Step 3: Certify LLC Membership
This section asks the LLC organizer (this can be an owner or unrelated person/company preparing the Certificate of Formation) to certify that there is at least one member of the Limited Liability Company and include their name and address.
Step 4: Select any Special LLC Designations
This section is optional and would be used only when an LLC will form a Series LLC, Professional LLC (PLLC) or a Non-Profit.
Most businesses will skip this section.
A series LLC is basically an umbrella LLC with mini LLCs underneath it. Real estate investors will often use the Series LLC to protect each property individually.
A Professional LLC is only for professions that are licensed in the state of Alabama such as accountants, doctors, lawyers, etc.
Step 5: Decide on the Effective Filing Date
This section provides a way to delay the start of the LLC. Some will choose to delay the effective date of the LLC if they aren’t ready to start the business but want to have the filing out of the way.
To choose today’s date for the start date of the LLC, skip this section, otherwise enter a start day up to 90 days in the future.
Step 6: Add Additional Attachments
This section is also optional but would be used if there were any additional attachments to be filed.
Step 7: Sign and Date the Certificate of Formation
Sign and date the Certificate of Formation
Step 8: File the Alabama Certificate of Formation
There are a few things to check before filing the Certificate of Formation.
1 – Make two copies of the signed Alabama LLC Certificate of Formation and be sure to include the Name Registration certificate.
2 – Mail both copies with a self-addressed, stamped envelope to:
Alabama Secretary of State, Business Services
PO Box 5616
Montgomery, Alabama 36103
3 – Include a check, money order, or credit card payment for $200. If paying by credit card, be sure to fill out and include the Domestic Formation Credit Card Payment Slip that is on page 4 of the downloaded Certificate of Formation)
4 – Be sure to keep a copy for your records.
Estimated Cost: 228 USD
Alabama LLC FAQs
How much does it cost to form an LLC in Alabama?
The cost to form an LLC in Alabama includes the Name Reservation fee of between $25-$28, and a $200 filing fee for the Certificate of Formation.
How long does it take to get an Alabama LLC approved?
Within 7-10 business days after filing the Certificate of Formation, the LLC will be officially formed with the Alabama Secretary of State.
What are the requirements for an LLC name in Alabama?
Under the Alabama Limited Liability Company Act, there are a few guidelines to be aware of when selecting an LLC name in Alabama.
– The business name must be different from any other name that is registered with the Secretary of State’s office. Search available LLC names in Alabama.
– The company name must not imply a business purpose that is different from what the business does.
– The business name must contain the words Limited Liability Company or the abbreviation L.L.C. or LLC.
– Unless the business is licensed by the state, words such as bank, insurance, attorney, etc. can’t be used.
What business licenses are needed in Alabama?
The requirements for business licenses and registrations in Alabama vary depending on what the business does and where it’s located.
Here is a list of common business licenses in Alabama
Does Alabama require an LLC to have an operating agreement?
Alabama Business Statutes, § 10A-5A-1.08 state that an LLC Operating Agreement is optional.
Despite the Operating Agreement not being required, it is recommended to have one as it can help to prevent disputes among members and protect the LLC’s legal status.
Related: Alabama operating agreement template
Do Alabama LLCs need an EIN?
Only Alabama LLCs that either have more than one member, will hire employees, or elect to be taxed as a partnership or corporation are required to get an Employer Identification Number (EIN).
The EIN (also called a Federal Employer Identification Number or FEIN) is a unique 9-digit tax identification number that is assigned by the Internal Revenue Service (IRS).
If the LLC isn’t required to get an EIN (though you can still get one), the LLC will use the social security number of the owner.
Related: Learn how to apply for an EIN at no cost with the IRS
Should I use an LLC formation service or do it myself?
Two of my top formation companies have a special offer where you can get your LLC formed without paying any additional fees (state fees still apply). Check out Zenbusiness and IncFile to learn more.
