Start an Alabama LLC

Naming your LLC is both a legal consideration and a marketing one. The main requirement: make sure your desired name isn’t already taken in your state, online, or as a federal trademark within your industry.

This means checking:

• The Alabama Secretary of State database
• Online to see if your name (or something close to it) is available as a domain name
• The USPTO database for live trademarks identical or similar to your business name

Once you have an available business name in mind, you’ll want to tack on an identifier like “LLC” or “Limited Liability Company.” If you file by mail, you’ll need to reserve your business name first by filing a Name Reservation Request form and waiting on approval. If you file your LLC online, you can take care of the name reservation step at the same time.

Next up, you’ll want to secure a domain name for your website. Why are these important? Just like you need a street address to help people find you on a map, you need a domain name to help people find you on the web.

For domain names, it’s better to register earlier rather than later. There are two basic reasons why:

• Credibility: When you bother to establish a professional domain name, you’re letting customers know you take your work seriously.
• Consistency: A domain name that connects to your brand name makes it simpler for customers to remember you, which makes them more likely to seek you out.

Northwest is a Business Identity provider, we offer domain names in-house. Just go to our domain search page, type in the name you want, and we’ll let you know which ones are available.

All LLCs in the state are required to appoint an Alabama registered agent. A registered agent is an individual or a company (like Northwest) designated to receive legal and state mail on behalf of your business.

Hire Northwest as your registered agent, and get more. You get access to a host of business services all geared toward creating and maintaining your business identity: online and off.

Your Alabama registered agent must:

• Have a physical address in Alabama (no P.O. Boxes)
• Be present at that address during regular business hours (9 AM to 5 PM)
• Agree to accept service of process on behalf of your LLC

The registered agent you use is a key part of your business identity. What’s a business identity? It’s the way you present yourself to the world, including potential customers and clients. You start building a business identity as soon as you form a business, and at Northwest, our Registered Agent Service can help strengthen that identity.

To officially form your LLC in the Yellowhammer State, you’ll need to complete a Alabama’s Certificate of Formation (LLC). This is a permanent public record, and everything you list here will be searchable online.

Here’s the information you’ll need to provide.

Required:

• Company name: Make sure it’s available and includes an indicator like “LLC.”
• Effective date: You can choose a specific date for your LLC filing to take effect (no more than 90 days after the signed date). If you leave this blank, the filing becomes effective the day it’s received by the state.
• Registered agent: Includes the registered agent’s name and address. 
• Series, professional, or non-profit: Only check the box if your LLC is one of these. Otherwise leave it blank.

Optional

• Other provisions (like names of each LLC member) can be attached to the Certificate of Formation.

An operating agreement acts as a road map for every big picture scenario your business is likely to face. While Alabama does not require LLCs to have an operating agreement, it’s just good business practice for you to draw one up. Your agreement can include anything you want, but here’s a basic list of what your Alabama operating agreement should focus on:

• Initial investments
• Distribution of profits and losses
• Voting rights and decision-making
• Transfer of membership interest
• Removing a member
• Dissolving the business

Remember, your operating agreement is an internal document, so it won’t need to be filed with the state, but you should keep it on file with your LLC’s founding documents.

Not sure where to start? Save time with our free attorney-approved Alabama LLC operating agreement template.

An Employer Identification Number (EIN) is like a social security number, but for businesses instead of individuals. The IRS uses your EIN to identify your LLC on tax filings. Getting an EIN is also an important step in setting up a business bank account.

You can get your EIN for free from the IRS, or you can keep it simple and hire Northwest, and we’ll get your EIN for you.

Most state LLCs will need to get a Business Privilege License (not to be confused with the Alabama Business Privilege Tax Return). This is a state-wide license, but you’ll need to obtain it through your local County Probate Office. If you’re doing business in multiple counties, you’ll need to apply for a license in each county. The Business Privilege License needs to be renewed annually. Licensing fees vary by county and profession.

Learn all about how to get a business license in Alabama.

Alabama requires all new LLCs to file an Initial Business Privilege Tax Return with the Alabama Department of Revenue. The report is due within 2.5 months of business formation. The tax rate for the Business Privilege Tax (BPT) is based on the entity’s federal taxable income apportioned to Alabama. Tax rates range from $0.25 to $1.75 for each $1,000 of net worth located in Alabama.

After your LLC files its initial report, you will need to file an Alabama Business Privilege Tax Return and Annual Report each year by April 15th. Check out our guide for more on how to file an annual report in Alabama.

*This is informational commentary, not advice. This information is intended strictly for informational purposes and does not constitute legal advice or a substitute for legal counsel. This information is not intended to create, nor does your receipt, viewing, or use of it constitute, an attorney-client relationship. More information is available in our Terms of Service.