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Form an LLC in Alabama.

$49 + State Fee & 1st Year FREE Registered Agent

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Your LLC’s Name

Your new LLC’s name must be distinguishable from any other Alabama business entity name that is reserved or registered with the Corporate Section of the Alabama Secretary of State’s office. It must contain, at the end, one of the following: “Limited Liability Company,” “LLC,” or “L.L.C.” The term “Limited” is allowed to be abbreviated as “Ltd.” and “Company” may be abbreviated as “Co.” The name must not state or imply that the LLC was formed for some purpose other than that stated in the articles of organization.

The Alabama Secretary of State’s office does not reserve names for domestic LLCs.

Articles of Organization

Forming your new Alabama LLC means that you have to file an original and two copies of the LLC’s articles of organization with the local county probate judge. Once the judge finds that the articles are in compliance with state law, the judge will issue (publish) one certified copy of the articles, return one to the LLC, and forward the third within 10 days to the Corporate Section of the Alabama Secretary of State’s office. Filing requires a $40 fee payable to the Alabama Secretary of State, and another $35 payable to the county probate judge, for a total of $75. The articles must be signed by all the members named in the articles, or alternatively, an organizer.

Your new LLC’s articles must list:

  • The LLC’s name,
  • The LLC’s duration (either perpetual or for a specified time period)
  • The LLC’s purpose (either specific or “any or all lawful conduct for which a limited liability company may be organized”)
  • The location and mailing address of the LLC’s registered office
  • The name of the LLC’s registered agent
  • Names and addresses of the initial member(s)
  • Name and address of the LLC’s organizer (if any)
  • Whether the LLC will be member-managed or manager-managed
  • If manager-managed, names and addresses of the manager(s)
  • The rights, if any, of the member(s) to admit additional members
  • Terms and conditions for admission of new members
  • Any circumstances under which the resignation of one or more members will require dissolution of the LLC
  • Any other provisions for the LLC’s operation desired to be included by the member(s)

Registered Agent and Office

All Alabama LLCs must have designated a registered agent in the state-someone to receive official state legal and administrative correspondence, including if the organization is served with a lawsuit. An LLC registered agent may be an individual who resides in Alabama or a business entity registered to conduct business in the state. The registered office may be a place of business for the LLC.

Operating Agreement

The LLC’s second most important document is its operating agreement, which can be changed by the members as specified in the agreement itself (or by state law if the operating agreement or the articles don’t address it). Having an operating agreement is not legally required by the state, but it’s a vitally important internal document that sets forth how the LLC will run. The operating agreement needs to list the LLC’s members, how much each one has invested, how any profits will be distributed, and how much relative weight each member has when voting.

The operating agreement may also include requirements for meetings (notice, quorum, voting rules, etc.) and similar functions, but it doesn’t have to. Often, it can restate or expand upon operating measures already contained in state law. It also may include restrictions on the members’ authority to change or repeal the operating agreement or a provision thereof. If there is more than one member, the operating agreement must initially be unanimously approved in writing.

Membership in the LLC

Alabama LLCs must have at least one member. Each member must be an individual person. A member can acquire an interest in the LLC when it is formed, or by some other method laid out in the operating agreement. Becoming a member usually requires a contribution of cash or property to the LLC, or it may take to form of services rendered to the LLC. However, a person may be admitted as a member of the LLC without acquiring a membership interest if the articles of organization or operating agreement allow it and all the members agree.

Unless the operating agreement states otherwise, a member can withdraw from the LLC at any time after giving 30 days’ written notice to the other members. If a member’s withdrawal is in violation of the operating agreement or is due to wrongful conduct by the member, that member can be held personally liable for any financial damages caused by the withdrawal from the LLC, including the cost of paying another person to perform services promised by the withdrawing member.

Ongoing Requirements

Alabama LLCs must keep the following types of records available for inspection at their office:

  • Members’ and managers’ (if any) names and addresses
  • A copy of the articles of organization with any amendments
  • A copy of the operating agreement, along with any amendments
  • Copies of federal, state, and local income tax returns for the past three years
  • Financial statements for the LLC’s the three most recent years

It’s also a good idea to keep copies of the minutes of the various proceedings and committees meetings of the owners or members.

Dissolution

An LLC is dissolved when any one of the following events occurs:

  • Event(s) specified in the articles of organization or operating agreement
  • Agreement to dissolve by all members
  • Event that makes it illegal for the LLC to continue
  • When there is no remaining member, unless (a) the holders of all financial rights agree in writing, or (b) the LLC’s legal existence and business is continued and one or more new members are appointed
  • Judicial decree ordering dissolution

Taxes

An LLC by its nature offers some tax advantages over a corporate structure, including access to more deductions, since the LLC is not required to be a separate tax entity like a corporation. Instead, an LLC is considered a “pass-through entity” for tax purposes, meaning LLC owners report business profits and losses on their individual tax returns.

The Alabama tax rate for income from an LLC varies, based on the amount of Alabama taxable net income per reporting period.

Learn more about forming an LLC in Alabama

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silver

$49

+ $163 (state fee)

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The Basics To Get You Started Preliminary company name clearance and filing of Articles of Organization.

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of our competitors advertise.

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Gold

$149

+ $163 (state fee)

everything from silver+

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EIN / Tax ID Number Providing an EIN is required to open a
business bank account and is required to
file business tax returns.

Personalized Operating Agreement Includes most common provisions to protect members from liability

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Platinum

$299

+ $163 (state fee)

everything from
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Expedited Filing Expedited processing speeds the turn- around time for your order.

Customized LLC Kit Personalized slip binder and embossed seal with your company name and date of fomation.

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Commonly Asked Questions For Starting a Alabama LLC

How is an LLC Taxed?
For federal income tax purposes the profits of an LLC (Limited Liability Company) "pass through" to the personal income of the members/owners. In the case of a single member LLC it is taxed the same as a sole proprietorship (i.e. typically filed on the schedule C of the owner's personal income tax filing). In the case of a multi member member it is taxed the same as a partnership (i.e. a 1065 partnership return is filed with the IRS, with a schedule K-1 being supplied to each partner/member showing the proportional profit/loss allocated to them, with this being filed on the schedule C or E).
NOTE: These are general tax explanations and may not apply to everyone. You should confer with the appropriate accounting/tax specialists to make sure you understand your personal tax liability.
What is the Management Structure of an LLC?
An LLC is typically managed by its members/owners (referred to as member-managed). In that respect an LLC is unlike a corporation, which has a much more rigid and defined management structure, including directors and officers. All owners of the LLC are typically referred to as members, and they can have control and voting interest proportional to their ownership interest, or in proportions different from their ownership interest; however the members agree.
Are Non-US Residents allowed to own a Corporation of LLC?
There are no citizenship or residence requirements for ownership of a C Corporation or an LLC. The S Corporation however does not allow nonresident aliens to be shareholders (owner), but any US citizen or resident alien may be a shareholder (owner). You would, of course, require an in state street address for the state to forward official legal and tax correspondence including service of process, known as the registered agent address, but neither residency nor citizenship is required for ownership of a C Corporation or an LLC.
Can I form an LLC with just one member?
There was a time when almost every state required the LLC to have two or more members, but that is no longer the case. This important change came in response to revised IRS regulations that clearly permitted single-member LLCs. As a result, in most states, if you plan to be the sole owner of a business and you wish to limit your personal liability, you can choose between forming a corporation or an LLC.
What is an Operating Agreement?
The operating agreement is akin to a partnership agreement for a General Partnership or Limited Liability Partnership (LLP). It is an internal contract amongst the members/owners of the LLC, and it lays out such things as ownership interest, member responsibilities, accounting method, adding or removing members, terms for concluding the LLC, etc. It is generally not required by a given state for forming an LLC (with the exception of New York), although it is certainly recommended. When dealing with private companies for financing issues (loans, mortgages, etc.) it may be required by that company. A customizable operating agreement is included with the LLC/Corp Kit.
Can another business entity be a member of an LLC?

In the majority of states, The members of an LLC can be individuals, corporations, or other LLCs. These members of the LLC can be out of state residents or even foreign nationals. Furthermore there is no limit to the amount of members that an LLC can have.

The flexibility of an LLC in contrast to an S Corporation is stark considering the S corporations are limited to 75 shareholders who must either be United States citizens or Lawful Permanent Residents.

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