Forming an LLC in Alabama

Created by FindLaw's team of attorney writers and editors.

If you're ready to begin forming an LLC, knowing the specific formation laws in your state and the steps you'll need to take can end up saving you a lot of time and money in the long run. This article tells you what you need to know about forming an LLC in Alabama and includes helpful links to do-it-yourself forms and to the state statutes that apply.

Forms for Alabama LLC Formation

Forming an Alabama LLC requires preparing and filing specific documents with the state. For your convenience, FindLaw offers an Alabama LLC Formation Package which contains the forms you'll need to create your LLC in the state.

LLC Attributes

An LLC or "limited liability company" has elements of corporations and partnerships. LLCs offer owners/members protection against personal liability for the company's debts and judgments in a similar way that a corporation does. An LLC also offers tax advantages in the same way that a partnership does.

Professional Services LLCs

Alabama allows organizers to form LLCs for the purpose of providing professional services, such as dentistry or accounting. However, only one specific type of service can be provided and all the owners must be licensed or registered to perform the service that is the basis for the LLC's formation.

Overview of Forming an LLC in Alabama

There are slight differences in LLC formation requirements that vary by jurisdiction, which is why it's important to understand the specific laws and procedures that apply to you. See the chart below for an overview of the steps you'll need to take to form an LLC in Alabama.

Statutes

Alabama Code Title 10A Alabama Business and Nonprofit Entities:

Name the LLC

Alabama law requires that the LLC names must:

  • Contain the term "Limited Liability Company"; or
  • Approved abbreviations "L.L.C." or "LLC"; and
  • Be different from the names of existing businesses that are already registered with the Alabama Secretary of State.

Perform a Name Check

Check with the Alabama Secretary of State for name conflicts.

Reserve LLC Name Prior to Filing

Unlike other states where name reservation is optional, Alabama mandates that you reserve the LLC name (via regular mail) with the Secretary of State and pay a fee before you file the formation documents.

Select a Registered Agent

Every Alabama LLC must have an agent for service of process in the event that the company is ever sued. The registered agent may be one of the following:

  • An individual who resides in Alabama; or
  • An Alabama business entity; or
  • A business entity that has an Alabama office.


File Articles of Organization

You must file the Certificate of Organization with a County Probate Court in the county where the company's initial registered office is located. This differs from other states where you file with the Secretary of State.

The filing (which includes fees) must include the following information:

  • The LLC's name, purpose, and address;
  • The registered office's name and address; and
  • The names and addresses of the organizers and managers (if applicable).

Create an Operating Agreement

Alabama doesn't require them, but it's recommended that you create an operating agreement to ensure that your business operates effectively.

Comply with Tax and Regulatory Requirements and Determine Necessary Business Licenses/Permits

If your company sells goods and collects sales tax, or has employees, you will likely have to register with the Alabama Department of Revenue.

All Alabama LLCs are required to file a Business Privilege Tax Return and Annual Report with the Department of Revenue on or before three and one-half months after the beginning of the LLC's taxable year. A minimum $100 tax must be paid annually.

IRS Employer Identification Number

If your LLC has more than one member, then you must apply for an Employer Identification Number (EIN).

Business Licenses

You may also have to obtain local and state business licenses, depending on the type of business and the location.

Foreign LLCs

All LLCs organized outside of the state must register with the Alabama Secretary of State to do business in Alabama. All foreign LLCs must appoint a registered agent for process of service who is physically located in Alabama.

Note: State laws are always subject to change through the passage of new legislation, rulings in the higher courts (including federal decisions), ballot initiatives, and other means. While we strive to provide the most current information available, please consult an attorney or conduct your own legal research to verify the state law(s) you are researching.

Forming an LLC in Alabama: Related Resources

Forming an LLC in Alabama? Connect with an Attorney

Although forming an Alabama LLC is relatively easy once you have the right forms, you should take time to ensure that you're setting up your business on the best possible legal footing. If you have LLC formation questions, get legal insight from an expert by connecting with an Alabama business organizations attorney near you.

Next Steps: Search for a Local Attorney

Contact a qualified attorney.