Form an Alabama LLC
Ready to start your limited liability company? Transform your organization into a legal business entity in three easy steps today with LegalZoom. As an LLC, you'll gain the ability to protect your personal assets from financial risk and enjoy the benefits of a corporation with fewer formalities. We'll help you choose how you want to organize your LLC and walk you through the whole process.
When you form your Alabama LLC with LegalZoom, we prepare and file your articles of organization with the county probate judge where the initial registered office of the company is located. We also conduct a name search for your Alabama LLC to assist you in the preparation of your operating agreement and other customized services corresponding to your needs. Once your articles of organization have been successfully filed, your Alabama LLC begins its existence as a legal business entity.
LegalZoom LLC Overview
Registering an LLC Name: Choosing a business name is one of the first steps in the process of forming your Alabama Limited Liability Company. The name that you choose:
Must contain, as the last words of the name, "limited liability company" or the abbreviation "L.L.C.," or "LLC." The word "limited" may be abbreviated as "Ltd.," and the word "company" may be abbreviated as "Co."
Must be distinguishable from any other registered Alabama Limited Liability Company or other business entity and any reserved names on record
Must not imply that it was formed for a purpose different than stated in the articles
LegalZoom allows you to choose up to 3 names, in order of preference. We will conduct a name check for your Alabama Limited Liability Company before filing to see which names are available.
How to Register: Once you have chosen an available name, LegalZoom can help you register your name with the state.
Articles of Organization: In any Alabama LLC formation, articles of organization must be signed by the members named in the articles, or by an organizer, and then filed with the Alabama county probate judge. State law requires that certain information be included in your articles of organization of your Alabama LLC formation. This information must include:
The company name
The period of the LLC's duration (this period may be perpetual or for a set amount of time)
The purpose of organization (this may be specified or you are allowed to use the phrase "any or all lawful conduct for which a limited liability company may be organized")
The location and mailing address of the company's registered office and the name of the company's registered agent (If you don't have a registered agent, LegalZoom can arrange to be your legal agent ?see below for additional details)
The names and mailing addresses of the initial member or members, and, if any, the organizer of the limited liability company.
The right, if given, of the member or members to admit additional members, and the terms and conditions of their admission
The circumstances, if any, under which the resignation of membership of one or more members will result in dissolution of the limited liability company
A statement that the company will be managed by a manager or managers, if applicable, and their names and mailing addresses
Any other provisions for internal regulation
Filing: Your LLC is considered organized once the articles of organization and two copies are delivered to the probate judge, and the judge finds that they are in compliance with state requirements. One certified copy of the articles of organization will be issued, and the other certified copy will be returned to the organizer or members. Within 10 days after the issuance of the certified copy of the articles of organization a certified copy of the articles of organization will be given to Secretary of State, indicating the place, date, and time of filing of the articles of organization.
Additionally, an Alabama LLC formation generally requires inclusion and/or consideration of the following:
Operating Agreement: Although not required, LLC members may adopt an operating agreement for the company, which may also be amended and repealed as allowed by the agreement or applicable law. The articles of organization may contain restrictions or prohibitions on the power of the members to adopt, amend, or repeal an operating agreement. If there is more than one member, any operating agreement shall initially be agreed to, in writing, by all of the members.
Membership: A limited liability company must have one or more members. Requirements:
Minimum Number of Members: One or more.
Eligibility Requirements: A member must be an individual.
Procedure for Membership: The member may acquire an interest in the LLC either (1) directly from the company, in compliance with any operating agreement of the company or (2) with the written consent of all of the members of the company if an operating agreement of the company does not provide for acquiring an interest directly from the company.
Resignation of Membership: Certain prohibitions exist surrounding the ability of a member to resign from the company.
A member may not resign from a limited liability company except in accordance with the operating agreement of the company.
Unless the operating agreement provides otherwise, a member may not resign from a limited liability company before the dissolution and winding up of the limited liability company.
An LLC may pursue certain remedies against a resigning member if the resignation violates the operating agreement.
Contribution:The contributions of a member to the limited liability company may be in cash, property, services previously rendered, or a promissory note or other binding obligation to pay cash, convey property, or to render services.
Registered Agent In Alabama
LegalZoom can also provide your business with a registered agent in Alabama. Every Limited Liability Company in Alabama must also have a registered agent in Alabama-- the person or office designated to receive official state correspondence and notice if the company is "served" with a lawsuit.
Eligibility Requirements: A registered agent in Alabama may be either (1) an individual resident of Alabama, (2) an Alabama business entity or (3) an out-of-state business entity with an office in Alabama.
Registered Office: The registered office may be a place of its business in Alabama.
Alabama Secretary of State
Once an Alabama LLC has been created, the Alabama Secretary of State will require certain recurring responsibilities and duties. The most important of these are explained below. For further information, refer to the Alabama Secretary of State office.
Records:The Alabama Secretary of State requires that each limited liability company keep the following records open to inspection at its office:
A current list of the full name and last known business or residence street address of each member, and each manager, if any.
A copy of the filed articles of organization and all amendments thereto, together with executed copies of any powers of attorney pursuant to which any documents have been executed.
Copies of the limited liability company's federal, state, and local income tax returns and reports, if any, for the three most recent years.
Copies of any then effective operating agreements including any amendments thereto.
Copies of any financial statements of the limited liability company for the three most recent years.
A limited liability company is dissolved upon the happening of any one of the following events:
Events specified in the articles of organization or the operating agreement
Written consent of all members to dissolve
When there is no remaining member, unless either of the following applies:
The holders of all the financial rights in the limited liability company agree in writing.
The legal existence and business of the limited liability company is continued and one or more new members are appointed.
When the limited liability company is not the successor limited liability company in the merger or consolidation with one or more limited liability companies or other entities
Entry of a court order
An LLC can offer certain tax advantages over a corporation, including the availability of more deductions. Additionally, an LLC is not required to be a separate tax entity like a corporation;instead, it can be a "pass-through entity," so that the LLC owners report business losses or profits on their personal tax returns, like a partnership.
Federal Income Tax: Unless you elect to tax the limited liability company as a corporation, the IRS treats single-member LLCs as sole proprietorships for tax purposes. This means the LLC itself does not pay taxes and does not have to file a tax return. Unless you elect to tax the limited Liability company as a corporation, the IRS treats multi-owned LLCs as partnerships for tax purposes. This means that LLC owners each pay taxes on their lawful share of the profits on their personal income tax returns, not the LLC itself. If you desire, by filing IRS Form 8832, you may elect corporate taxation if you regularly need to keep a substantial amount of profits in your LLC.
State Income Tax: The LLC tax rate for Alabama is variable, based on Alabama taxable net income.
Federal Tax Identification Number: Your LLC may need to obtain a federal tax identification number (also known as an employment identification number/ EIN), which is similar to an individual's social security number. Generally, you will not need a separate EIN number for your LLC as long as you are the sole owner and the LLC has no employees. However, if you are not the sole owner of the LLC or if the LLC has employees, your LLC will need a separate EIN number to open a bank account and for certain tax filing requirements LegalZoom can prepare your Federal Tax ID Application if you have not already done so.
Filings must be made with the probate judge of the county in which the LLC was organized, along with the appropriate state filing fee. When appropriate, two checks must accompany the document, one payable to the judge of probate and one payable to the State of Alabama, covering all charges for the Alabama Secretary of State. The check for the Secretary of State will be forwarded by the judge of probate to the Alabama Secretary of State (to be deposited in the Secretary of State Limited Liability Companies Fund).