Alabama is a wonderful place to start a business, offering countless small-scale startup opportunities. But it is best that you choose a limited liability structure to ensure your personal assets remain safe from creditors in case your business ever comes under a lawsuit. Moreover, it also offers favorable tax conditions to business owners.
If you’re interested in learning how to start an LLC in Alabama, you’ve come to the right place. Here are all the steps you’ll need to follow:
Pick a Name for Your Alabama LLC
One of the first things you’ll have to do to start an LLC in Alabama is name your business. Naming a business can be challenging as you want to come up with something unique and catchy, and, of course, the name should also correlate to your business.
But above all else, you must comply with the state naming guidelines. Every state has a set of rules. Here are some naming requirements that must be followed in the state of Alabama:
The name you choose should be distinguishable from any existing business name in Alabama. Follow this link to check for the availability of names.
The name you choose should contain “limited liability company.” You may also use the following abbreviations instead of the full name:
Special words, such as FBI, treasury, etc., cannot be used as they might create a false association of your LLC with governmental organizations.
Obtain the Federal EIN Number for Your LLC
The federal government assigns an employer identification number to all LLCs for tax purposes. Through the EIN, you can open up your bank account, make your business recognized by federal and state authorities and hire employees for your business.
There is no fee for obtaining the EIN. Click here to get one for your Alabama LLC now.
Find a Registered Agent for Your Company
When starting an LLC in Alabama, the state requires you to appoint a registered agent. A registered agent acts as the state’s first point of contact for your business. The agent’s responsibility is to receive all legal documents and notices as your LLC’s representative.
The agent can be a person or company authorized to offer registered agent services in Alabama. As per state laws, the registered agent, be it a person or an organization, must have an official address in Alabama and be available on-site during business hours to collect legal notices and documents.
You can appoint yourself or a member of your LLC as a registered agent.
File Your LLC’s Certificate of Formation
After appointing your registered agent, you will be ready to file your Certificate of Formation. The certificate must be filed with the Alabama Secretary of State.
Once you’re done with this step, you can officially start an LLC in Alabama. In most other states, the Certificate of Formation is known as the Articles of Organization. The filing fee for this step is $200. You may file the documents online or via mail.
Here’s everything you will need:
The name of your Alabama LLC
The name and address of your LLC’s registered agent
The starting date of your LLC, in case it is different from the filing date
The signature of the person that wants to organize the LLC
Apply for the Necessary Licenses and Permits
Starting an LLC in Alabama may or may not require you to obtain licenses and permits. The requirements vary by the nature of your business and location.
If your LLC sells products or services, you may need to get a store and business privilege license. The licenses can easily be obtained from the Alabama county probate office.
Additionally, you will also require a seller’s permit. If the product/service is sold at retail, it will also be subjected to sales tax.
Some businesses may also require additional licenses and permits to operate. Follow this link to see if any apply to your LLC.
Form an Operating Agreement (Optional)
Forming an operating agreement is highly recommended, but it is not a state requirement, so you can always skip this step. But having one will only turn out ot be in your favor.
It is an internal document that clearly describes the ownership of your LLC and the roles of managers and members. It also forms standard procedures for onboarding and letting go of members and employees.
Here’s what you can include in the operating agreement:
How the LLC ownership will be distributed among the members of your LLC
The roles and responsibilities of all the members
The standard procedure for letting go of an LLC member or when the LLC winds down
How your LLC will be taxed (corporation, sole proprietorship, etc.)
Purchase Insurance Plans
Having insurance plans backs up your business in times of crisis and emergencies. It reduces the risks to your LLC considerably.
Here are some insurance policies you should consider purchasing:
Worker’s compensation insurance
Personal liability insurance
General liability insurance
Start a Business Website
Once you have completed all the essential steps required to start an LLC in Alabama, the next thing to do is set up a business website.
For service-based businesses, it is important that you set up an easy-to-operate webpage that allows visitors to learn about the services you provide and even book consultations online.
Choose Trady.com to achieve the ultimate web design for your Alamaba LLC. We can help you make online bookings and payments manageable and hassle-free.
Market Your LLC
After you have a working website, the next thing you must do is market your LLC. After conducting detailed market research, find your target audience and pitch your business accordingly.
Whether you want to use social media marketing or opt for search ads, Trady.com can provide you with an effective marketing strategy at affordable pricing. Get started today.