Form an LLC in Alabama for Free

Before you can start your new LLC in Alabama, it’s important to choose a name for it. The business name you choose for your LLC must be unique and also comply with the LLC naming rules of the state of Alabama.

Some things to keep in mind include:

• The name must use LLC, Limited Liability Company, or L.L.C.
• You must choose a unique name that’s not used by any other business in the state. Verify this with the state’s business name database.
• Don’t use restricted words (like bank) and the name must not include any names of federal agencies like CIA, FBI, etc.

Once you’ve chosen a business name, you need to reserve it to ensure no other company ends up picking it before you do. You can file an application to reserve your business name for up to 90 days. It’s also possible to renew this duration.

Additionally, it’s important to purchase a domain name for your business. This will ensure that no one else picks it up as it could harm your brand at a later stage. It’s also a good idea to claim your social media handles before anyone else does.

The state of Alabama requires businesses to have a Registered Agent within the state who can receive documentation and legal communications on their behalf. While you can be your own Registered Agent, you’d have to be present at the registered office during all normal working hours. 

Instead, you could hire Inc Authority as your Registered Agent and have them receive the communication for you. They’ll even share the received communication with you instantly so you can act upon it.

This is especially helpful for foreign LLCs that may not have an office in the state of Alabama.

When you start your LLC in Alabama, you’ll also need to choose your LLC type. Now, this decision may be simple if you’re starting a new business. You’d have to opt for a domestic LLC. But if you have a business in another state, you could choose to start a domestic or foreign LLC. 

Make your choice well as the filing fees for foreign LLCs are just $150 while domestic Alabama LLCs will cost $200.

To formally start your LLC in Alabama, you have to file your Certificate of Formation with the Secretary of State. This is essentially the Articles of Organization.

You’ll need to prepare your Alabama LLC Certificate of Formation and submit it to the Secretary of State to get your LLC formation process started. Inc Authority will handle this process for you, so all you have to do is provide the required documents and information and you’re good to go.

You’ll also need to create an LLC Operating Agreement for your business in Alabama. This document essentially outlines how your LLC will conduct business. It includes things like:

• Roles and responsibilities of the LLC members
• Name and address of the Registered Agent
• Whether the LLC will be managed by members or managers
• Contribution of members and their share of profits
• Procedure to add or remove members from the Alabama LLC

The Operating Agreement comes in handy when any organizational issues pop up. It’s also a handy document that helps keep your organization’s operations running smoothly. If you don’t have an agreement in place, the courts will take decisions related to your business in case of any legal disputes within the members.

Your LLC in Alabama isn’t legally formed until now. While you’ve filed and submitted your Certificate of Formation to the Secretary of State, your business only starts legally when this certificate is approved. 

So, once the Secretary of State approves your application, you’ll receive your Certificate of Formation confirming your LLC formally exists in the state of Alabama. You have to use this certificate to apply for your business bank account and EIN, among other things.

If you want to hire employees or conduct even the most basic business transactions like sending and receiving payments, you’ll need to get an Employer Identification Number (EIN). This is basically your LLC’s federal tax ID number. It’s necessary to get an EIN for every LLC in Alabama, so make sure you apply for it before you start your operations.

It’s imperative that you open a separate bank account for your business to conduct transactions for it. This will help keep your business and personal finances separate—something that’s important to maintain the limited liability cover of LLCs. 

By opening your business bank account, you’ll be able to make and receive payments for your products or services. To open one, you’ll need to submit your Certificate of Formation, EIN, and other personal identification documents as requested by the bank. 

The state of Alabama requires you to keep certain important documents in your registered office. Some of the documents you need to have in your LLCs office include:

• A list of all the members of your Alabama LLC along with their updated addresses.
• A copy of your Certificate of Formation along with any amendments that you may have made.
• Your LLC’s Operating Agreement or its copy.
• Any financial statements you’ve filed with the Department of Revenue. 

It’s important to keep these documents handy in your office to remain in good standing with the state and ensure smooth business continuity. 

While your LLC may be operational by now, it’s important to get certain licenses and permits for it to operate legally. These will completely depend on the nature of your business and you’ll need to check if you need these licenses at both the state and federal levels. 

For instance, you may need a fire safety license if you run a restaurant or eatery. Similarly, if you intend to serve liquor, you may need a liquor license from the state. 

Every business in Alabama is required to file an Alabama Business Privilege tax return with the Department of Revenue according to Alabama Law. This must be done on or before 3.5 months of the tax year for your new LLC in Alabama. 

The rate of Business Privilege tax varies in Alabama based on the revenue of your new LLC. So make sure you’re representing your revenues accurately in your return and paying the relevant tax to keep your business in the good books of the state of Alabama.

Here are the features you’ll get with the free plan:

• Business name check: You can use Inc Authority’s website to quickly check if your desired business name is already in use within your state by using their free search tool.

• Registered Agent services: Inc Authority will work as your Registered Agent for one year for free.

• Digital document storage: Your business formation documents like Certificate of Formation will be saved digitally.

• Tax advisory: Inc Authority will help with your taxation, including the Business Privilege Tax.

• LLC formation: From filing your Certificate of Formation to paying the filing fees,

• S-Corp election and filing: You might want to get your LLC taxed as an S-Corp. If that’s the case, Inc Authority will do the S-Corp filing for your LLC in Alabama without any additional fees.

• Business funding analysis: You may need some financial support in the form of funding or debt. Inc Authority will analyze your business needs and suggest the best modes of financing for your new LLC in Alabama. 

In a nutshell, the free plan has everything you need to get your LLC off the ground in the state of Alabama. You only need to pay the state filing fee, and Inc Authority will do the filing process for you. 

Price: Free