How to File an Alabama LLC Certificate of Formation

Choosing an LLC Name

Before anything else, you will need to decide on an LLC name. You must include a business name on your Certificate of Formation, and if the Secretary of State deems that name unacceptable or unavailable, the document will be rejected, so make sure you nail down a good name right away.

As you settle on a name, adhere to the state’s business naming requirements by ensuring that it contains the terms “Limited Liability Company,” “L.L.C.,” or “LLC,” and does not include any terms that would identify it as a banking, insurance, or government entity. Finally, your chosen name must not already be in use. Perform a business name search to determine if it’s distinguishable in the Secretary of State’s records.

Once you’ve found your perfect name, you must reserve it by filing a Name Reservation Request Form before including it on your Certificate of Formation. This reservation lasts for one whole year and you can renew it at least 90 days before it expires. Every Alabama LLC must have a name reservation before filing its formation documents anyway, so you should go ahead and take care of it now.

Choosing an Alabama Registered Agent

A registered agent is your LLC’s liaison to the state, the mediator who takes care of all your important legal, tax, and compliance documents, keeping your business in good standing. Registered agent information is an essential part of your Certificate of Formation, and your form will be rejected if you don’t include it. So, be sure to touch base with your desired agent before sitting down to file.

This agent will fall into one of two categories: individual or business entity. If you choose an individual, that person must be an Alabama resident with a physical and mailing address in the state. But if you go with a business entity (like a registered agent service) it must be authorized to do business in Alabama.

Quick Note: If your first choice doesn’t work out, don’t worry. You can always change your registered agent in the future.

Preparing to File Your Alabama Certificate of Formation

Now for the main event: the Certificate of Formation. Here’s your opportunity to get your LLC officially on record and authorized to conduct business in Alabama.

You’re likely itching to start your LLC and since the Certificate of Formation is the document that officially gets it going, you probably want to submit it ASAP. To streamline the process, gather the necessary information beforehand and you’ll breeze right through. Here’s what you’ll need:

• LLC name
• A copy of your name reservation certificate
• Name and address of the person who prepared the form
• Registered agent name and address
• Confirmation that the LLC has at least one member
• Whether or not the LLC is a series, nonprofit, or professional LLC
• An effective date up to 90 days after the filing (optional)
• The LLC organizer’s name, title, and signature
• Credit card information (if paying by card)

Along with your Certificate of Formation, you must also submit a copy of your Name Reservation Certificate.

In most states, you would submit your formation documents to the Secretary of State’s office, but in Alabama, you won’t. Instead, you’ll submit the original document and two copies to the Office of the Judge of Probate in your LLC’s home county (find a list of county probate judges here). The Probate Judge will then submit your forms to the Secretary of State’s office.

There are a couple of fees associated with the Certificate of Formation so have a credit card or check ready to go. The fees are as follows:

$100 – Standard processing

$200 – Expedited processing

$50 – Minimum Probate Judge fee

Certain judges have specific payment rules and requirements – some don’t accept credit cards or expedited processing, for example – so check with your county’s Probate Judge before filing to make sure you’re following the correct protocol.

Standard processing time varies depending on which filing option you choose. If you’re in a hurry, online filing is always the fastest route. If you want to file on paper but still want a quick formation, the expedited processing option, which will process within 24 hours after it’s received, might be a good choice. Otherwise, processing will typically take 3-5 business days.

However, during heavier processing times, it can take as long as 14 business days. Keep in mind that your specific county could have a significant influence on these turnaround times, and formations can take much longer than this during peak periods in busy counties.

Filing Options

Depending on your LLC’s county, you have three different, but equally valid, filing options: mail, in person, and online. After confirming filing procedures with your county’s Probate Judge, choose the one that best suits your timeline and preferences.

Mail

Download a paper application here. Once you’ve filled it out and included your Name Reservation Certificate, mail the original plus two copies to the Office of the Judge of Probate in the county where the LLC will be located.

In-Person

Or, if you want to get out for some fresh air, you can hand-deliver the documents directly to the County Probate Judge’s office.

Online

You also have the option of filing your Certificate of Formation online. This is the fastest and easiest method, and the one we typically choose when forming LLCs ourselves.

The filing date is effective immediately on the date that the Probate Judge files your Certificate. You do have an option to delay the filing, but it must be filed within 90 days after the Certificate application is signed.

What About Foreign LLCs?

The process outlined above works for domestic LLCs (those formed in Alabama), but what if your business is expanding to Alabama from another state? In this case, disregard the Certificate of Formation. Your LLC will go in a different direction.

LLCs coming to Alabama from out of state must instead file an Application for Registration. You can file this form online or by sending a paper application to:

Alabama Secretary of State, Business Services

P.O. Box 5616

Montgomery, Alabama 36103-5616

The Application for Registration costs $150 for standard processing and $250 for expedited service (24 hours).

This process is called foreign qualifying your business and it’s required for all foreign entities. Don’t commence your business activities without foreign qualifying or you might face some serious penalties from the state.

However, after the state has successfully processed your filing, you’re ready to go! Feel free to make deals, sell products, hire employees, and take care of other miscellaneous business responsibilities in Alabama.

Want Help Filing Your Certificate of Formation?

Let’s be honest: you’ve got a lot on your plate. Filing paperwork can take time away from your other tasks, ones more focused on setting your budding LLC up for success.

The good news is that you don’t need to file the Certificate of Formation yourself. But if an attorney is out of your price range, hiring an LLC creation service is a great option.

There’s no shortage of business incorporation services out there, but not all of them are equal. Each one offers different packages, costs, and processing times, so it’s important to find the right fit for your LLC.

While each service has optional upgrades and feature packages, on the most basic level, they will review your business information, prepare your formation documents, and submit them to the Alabama Secretary of State. They will complete everything outlined in this guide and notify you when your Certificate of Formation has been filed. You won’t have to lift a finger.

There are other benefits too. Some services will include a year of free registered agent service when you hire them. Other services offer order tracking, notifications on future documents, assistance drafting your operating agreement, or coverage of certain LLC formation costs.

Important Post-Formation Compliance Issues

Once you’ve successfully filed your Certificate of Formation, your LLC is an official business entity in the state of Alabama. However, this doesn’t mean that your responsibilities have come to an end. There are several other steps you’ll need to take if you want to operate a compliant LLC for years to come.

Acquire a Federal Tax ID Number (EIN)

While an EIN isn’t a requirement for Alabama LLCs, we strongly recommend that every entrepreneur obtains one. An EIN enables your LLC to hire employees, open business bank accounts, file taxes, and take care of several other important aspects of LLC maintenance. Even if you operate a single-member LLC with no employees, you should still have an EIN for your business.

Set Up a Financial Infrastructure

One other crucial step is to solidify the financial aspects of your LLC, first by opening a business bank account. You must have separate bank accounts for your personal use and for business purposes, as this will help you keep your personal and business assets separate, a vitally important consideration for any entrepreneur. If you commingle these assets, you leave yourself wide open for lawsuits, as it would be easy for someone to claim that your business is simply an extension of your own personality and not a separate entity from you as a person.

The other portion of this step is to set up an accounting system. This can either mean that you hire an accountant to take care of your LLC’s bookkeeping, or you could acquire high-quality accounting software like QuickBooks. Either way, you need a reliable means of keeping detailed records for each financial transaction your LLC executes. This is another vital part of keeping your personal and business assets separated, and it will also be enormously helpful come tax time.

Acquire Licenses and Permits

The next step involves obtaining any industry-specific licenses and permits your LLC may need to operate in compliance with state laws. Depending on the nature of your LLC’s business, you may require several permits or you may be able to operate your LLC without any state-level licenses.

Thankfully, Alabama makes it very easy to figure out your business’ licensing needs. All you need to do is visit the state’s Business Licensing page and you’ll find the license and permit applications you require. Make sure to check with your county and locality as well, as there may also be licensing requirements for your business on these levels.

Obtain Business Insurance

This step isn’t a requirement, but it is a strong recommendation. The exact insurance policies your business needs will vary based on the type of products and services you offer, but most LLCs should at least have a general liability insurance policy to protect against common perils like slip-and-fall accidents. In some industries, you might need several different insurance policies to cover all of your financial bases, so do your research ahead of time to determine which types of insurance you should purchase.

File Your Annual Reports

Each year, every LLC in Illinois must file an annual report. This report includes some basic information about your business and keeps the state updated regarding any important changes to your LLC’s structure. The information you’ll need to file this report typically includes the date and jurisdiction where you formed your LLC, your LLC’s name, mailing address, contact person, federal tax ID number or EIN (if applicable), and net worth.