Form an Alabama LLC
At LawInc we are Alabama LLC formation experts who can help you form a Alabama LLC, the right way. We file the Alabama LLC Articles of Organization with the Alabama Secretary of State Corporations Division and prepare a customized operating agreement. We can also obtain the Alabama LLCâ€™s Taxpayer Identification Number (TIN also known as an EIN or Employer Identification Number), in an quickly as 24 hours. Let LawInc guide you through the process of forming your Alabama LLC.
Let LawInc walk you through the Alabama Limited Liability Company formation process. Our clear, concise and easy to use website, helps keep things simple.
At LawInc we are Alabama LLC formation experts who can help you form a Alabama LLC, the right way. We file the Alabama LLC Articles of Organization with the Alabama Secretary of State Corporations Division and prepare a customized operating agreement. We can also obtain the Alabama LLCâ€™s EIN, in an quickly as 24 hours. Let LawInc guide you through the process of forming your Alabama LLC.
Allow LawInc walk you through the Alabama Limited Liability Company formation process. Our clear, concise and easy to use website, helps keep things simple.
Alabama LLC Name
Alabama LLC Name Registration: The first step in forming an Alabama Limited Liability Company is selecting the business name. Alabama LLC names:
- Must be unique from any other registered Alabama Limited Liability Company or other business entity and any names reserved on record.
- Must end with â€śLimited Liability Company,â€ť â€śLtd. Liability Co.â€ť or â€śLLC.â€ť
- Cannot contain language indicating or implying that itâ€™s organized for anything other than a legal business purpose.
- Cannot contain the following words or their abbreviations: corporation or incorporated.
- Cannot contain a word or phrase that indicates or implies that it is organized for a purpose other than whatâ€™s stated in the articles.
Registering an Alabama LLC Name: After choosing an available LLC name, we will register the name with the AL Sec. of State. LawInc.com permits you to choose up to three names and will conduct a name search for your Alabama LLC, prior to filing.
Alabama LLC Formation
Alabama Articles of Organization: When forming an Alabama LLC, the articles of organization must be executed by the members named in the articles, or by an organizer, and then delivered to the Alabama county probate judge for filing, along with a copy.
Alabama LLC Articles of Organization must include the following:
- LLC name
- LLC duration
- LLC purpose (either specific or â€śany or all lawful conduct for which a limited liability company may be organizedâ€ť)
- Organizersâ€™ name and address
- LLC registered office address
- LLC registered agent address
- LLC registered agent name
- LLC membersâ€™ names and addresses
- LLC organizer name and address (if any)
- Right, if given, of the member(s) to admit additional members, and terms and conditions of admission.
- Circumstances, if any, under which membership resignation will result in dissolution of the Alabama LLC.
- Statement as to whether the Alabama LLC will be member or manager managed.
- Any other internal regulation provisions.
Alabama LLC Filing: The Alabama LLC is considered registered upon delivery of 2 copies of the executed Articles of Organization to the Alabama probate judge and the judge deems them in compliance with state requirements. An issued and certified copy of the articles will be returned to the organizer or members. Within ten days if issuance, a certified copy of the articles of organization will be given to Secretary of State, indicating the filing place, date and time.
Post filing: After filing, Alabama law requires the creation of an operating agreement which dictates the LLC internal affairs and management.
Alabama LLC Membership Requirements:
- Alabama LLCs must have at least 1 or more members.
- Member must be a natural person.
- Member may be admitted by signing, complying or by a vote.
- Member has the power to resign at any time, although certain prohibitions apply, as dictated by the LLC operating agreement.
- Member contribution can be in the form of money, property or services.
Alabama LLC Registered Agent: An Alabama Limited Liability Company must have a registered office and agent, designated to receive official state correspondence and notice if the LLC is sued. The agent must be a (1) natural person residing in Alabama, (2) a domestic LLC or corporation, or (3) a foreign LLC or corporation authorized to do business in Alabama.
Alabama LLC Registered Office: The registered office may be, but is not required to be, the LLC’s place of business.
Alabama LLC Post Formation Requirements
After an Alabama Limited Liability Company has been formed, the Alabama Secretary of State mandates certain ongoing responsibilities and duties.
Initial Business Privilege Tax Return: Within two and a half months of formation, the LLC must file a business privilege tax return. Failure to do so will invalidate the LLC.
Annual Report: Alabama LLC’s do not have to file an annual report but are required to file annual tax returns on April 15.
Records: Each Alabama LLC shall keep the following records open to inspection at their office:
- A current list of the full name and last-known business, residence, or mailing address of each member, each governor, and chief manager
- A current list of the full name and last-known business, residence, or mailing address of each assignee of financial rights other than a secured party, and a description of the rights assigned
- A copy of the articles of organization and all article amendments
- Copies of any currently effective written bylaws
- Copies of the LLC’s federal, state, and local income tax returns and reports, if any, for the 3 most recent years
- Financial statements
- Records of all proceedings of members for the last 3 years
- Records of all proceedings of the board of governors for the last three years
- Reports made to members generally within the last three years
- Member control agreements
- A statement of all contributions
- An explanation of any restatement of value
- Any written consents obtained from members under this chapter
- A copy of agreements, contracts, or other arrangements or portions of them
Alabama LLC Taxes
Alabama LLC Tax: The LLC tax rate for Alabama is variable, based on Alabama taxable net income.
Alabama LLC Federal Income Tax: An advantage of the LLC is its tax flexibility. LLC members are allowed to select how the entity will be taxed. An LLC may be classified for federal income tax purposes as either a:
- Sole proprietorship
- Partnership, or
Single member LLCs are treated the same as sole proprietorships. Profits are reported on Schedule C as part of your individual 1040 tax return. Self-employment taxes on LLC net income must be paid just as you would with any self-employment business.
Most multi-member LLCs elect to be treated as partnerships by the IRS and file IRS Form 1065. On this form, LLC profits are reported and allocated to each of the owners according to the LLC’s operating agreement. Each owner is given a Schedule K-1, which shows each owner’s share of LLC income or loss. The owner then reports and pays taxes on this income on the owner’s annual 1040 income tax return. It is important to note that as with sole proprietorships, all LLC profits are taxed to the owners, even if they are not actually distributed by the LLC. This situation can arise when the LLC needs to use its profits to pay ongoing expenses.
If pass-through taxation is not desired, an LLC may elect to be taxed as a corporation by completing IRS Form 8832. If this election is made, the LLC is taxed as a C corporation by the federal government. Because the corporate income tax rates for the first $75,000 of corporate taxable income are lower than the individual income tax rates that apply to the taxable income of non-corporate taxpayers, it is possible a net income tax savings can result from this tax election.
State Income Tax: Alabama LLCs are subject to a variable tax rate, based on taxable net income.
Alabama LLC Federal Tax Identification Number/Employer Identification Number (EIN): The Federal Tax Identification Number, also known as the Employer Identification Number (EIN) is a number that is assigned to a business by the Internal Revenue Service. An EIN is like a Social Security Number for a business. It is a requisite for certain business functions such as opening bank accounts or hiring employees. An EIN will be required if the LLC has more than one owner, or any employees. LawInc.com can prepare your EIN application or even obtain your EIN for you, if youâ€™d like.
Alabama LLC Dissolution
To dissolve an Alabama LLC, you must provide the completed original and 2 copies of the Domestic Limited Liability Company Articles of Dissolution form, to the Probate Judge in the County where the original Articles of Organization were filed. An original signature is required. The filing fee is $100 Secretary of State fee + $5 Probate fee (varies).
Acts Triggering Dissolution: An LLC is dissolved upon the happening of any one of the following events:
When the period designated in the articles for the duration of the LLC expires:
- By court order
- By action of the organizers
- By action of the members
- Upon the termination of a member, but only if (a) the articles or operating agreement specifically indicate that the termination causes dissolution, or (b) if the last or sole member terminates membership and at least 1 member is not admitted within 180 days
- A merger occurs in which the LLC is not the surviving organization
- Upon the termination of a member, but only if (a) the articles or operating agreement specifically provide that the termination causes dissolution, or (b) if the last or sole member terminates membership and at least one member is not admitted within 180 days
- A merger occurs in which the LLC is not the surviving organization