Simple Steps to Start Your Alabama LLC
Alabama is located in the southeast of the U.S. and is bordered by Tennessee, Georgia and Florida. Known as both the Yellowhammer State and the Cotton State, Alabama’s economy has diversified significantly over the last few decades.
If you want to start your own business in Alabama, one of the best ways to do so is by forming an LLC.
Alabama Limited Liability Companies (LLCs) are a business entity designed for startups and small- and medium-sized businesses. Forming an LLC is fast, easy and inexpensive. LLCs offer many of the protections and advantages of large corporations without all the rules, regulations and compliance issues common to larger business entities.
In Alabama you also have the option to set up a “Series LLC” — these are specialized LLCs designed to allow you to manage multiple separate LLCs under one master, umbrella LLC. We have a helpful guide to Series LLCs to help you decide if they’re right for your new business.
Let’s start by looking at the advantages of forming an Alabama LLC.
Advantages of Forming an LLC in Alabama
Alabama LLCs have several benefits for business owners.
- The preparation to start an Alabama LLC is quick and easy: You can complete all the necessary forms and actions online to start your company. You can gather and prepare the information to start your business in an hour or two.
- An LLC limits your personal liability: Any liabilities created by your Alabama business (debts, obligations and other liabilities) are legally considered to be completely separate from your personal assets as the business owner or founder.
- Alabama LLCs are easy to maintain: LLCs are light on rules and regulations. There’s no need for boards of directors, complex rules and regulations or formal annual meetings.
- LLCs are very easy to manage: General administration is fast and easy. Add and amend members and make other changes with just a little paperwork.
- Taxes are simple: Any income you earn through your Alabama LLC is reported on your personal tax return. This means you won’t run into “double taxation” issues common with larger corporations.
- Turnaround times for forming an LLC in Alabama: You will normally have the option of a “Standard” turnaround time and an “Expedited” turnaround time for forming your LLC. You can learn about those times here.
- Fees for forming an LLC in Alabama: Learn about standard filing costs here.
Start your Alabama LLC in Six Steps
STEP 1: Name Your Alabama LLC
- You will need a distinctive, original name for your Alabama LLC that’s not used by another business in Alabama
- To find out if another company is using your choice of business name, carry out an Alabama business entity name search
- The name should be unique and not able to be confused with the name of another Alabama business
- The name of your business must end with “Limited Liability Company” or the abbreviation “LLC” or “L.L.C.”
- For example: “Alabama Forestry Services and Survey Reports LLC” or “Huxley and Sons, Limited Liability Company”
STEP 2: Provide the Address for Your New Alabama LLC
An Alabama LLC must have a designated street address. That could be your home address (if you’re running the company from your residence), where your office is located or any physical address of your preference — but it must be inside Alabama. It cannot be a P.O. Box.
STEP 3: Assign a Registered Agent for Your Alabama LLC
Every Alabama LLC must have a “Registered Agent.” That could be you, the managing director, owner or a dedicated Registered Agent service. The Registered Agent in Alabama is someone who receives official legal and tax correspondence and has responsibility for filing reports with the Alabama Secretary of State.
At Incfile, all of our packages include a Registered Agent service, which is free for the first year and just $99 per year thereafter. We also have a dashboard where you can log in and easily view any document your Registered Agent has received on your behalf. Here are a few reasons you might want to appoint Incfile as your Registered Agent service:
- The Registered Agent must have a physical street address in the state where you are forming the company. Some people establish companies outside of the state they live in and will need to use a Registered Agent service to provide the address.
- You always need to have someone on hand to receive important documents for your business during business hours (typically 9 a.m. to 5 p.m. Monday to Friday). Therefore, a person must always be available to sign for legal correspondence.
- The Registered Agent’s name and address are part of the public record and available through the Alabama Secretary of State's website. If you would prefer your name and address are not published, this is a good reason to choose a Registered Agent service.
- If you change your Alabama business address or move out of state, you don’t need to file additional documentation with the Secretary of State for the new address of your Registered Agent. You will need to set up a new Registered Agent service in the new state.
STEP 4: Gather Information for Filing With the State
You will need to gather together certain information about your proposed business for filing with the Alabama Secretary of State. We’ll guide you through everything you need to do when you create your business with us.
STEP 5: You Need to File a Certificate of Formation With the Alabama Secretary of State
STEP 6: You Can Create an Alabama LLC Operating Agreement
Alabama LLCs aren’t required to have an Operating Agreement, but they are extremely useful for several reasons. Your Operating Agreement covers how the business will be run, how managers and members are chosen, the rights and duties of members and several other key areas. Learn how to create your Operating Agreement here.
If you’re interested in having your Operating Agreement created for you, Incfile will draft a general Operating Agreement within most of our online business formation packages. It can also be selected as an add-on option in our Silver package. This Operating Agreement will be a basic template that you can make changes to anytime you see fit.
You can find lots more useful information on how to form an LLC here. It answers questions like:
- Who can form an LLC?
- Where should you form an LLC?
- When should you form an LLC?
- What are the ongoing responsibilities for an LLC?
Starting Your Alabama LLC: Useful Resources
Form an Alabama LLC Without Breaking the Bank
Incfile provides a cost-effective service to help you create your LLC. We guide you through the process and handle most of the administrative steps on your behalf, such as filing the Certificate of Formation. Our basic package also provides free Registered Agent service for the first year. If you're looking for help starting an LLC, our comprehensive services provide outstanding value.