The Certificate of Formation is the legal document filed to officially create certain business types in Alabama. Its primary function is to establish the company as a distinct legal entity, separate from its owners. This filing provides a public record of the business’s existence and its compliance with state formation requirements.
What is an Alabama Certificate of Formation?
An Alabama Certificate of Formation is the official document submitted to the Alabama Secretary of State to create a Limited Liability Company (LLC). Governed by Title 10A of the Code of Alabama, this filing legally establishes the LLC, giving it the ability to conduct business, own assets, and enter into contracts in its own name. The certificate’s main purpose is to create a legal distinction between the business and its individual owners, known as members.
This separation provides owners with personal liability protection. Should the business incur debts or face legal action, the owners’ personal assets, such as their homes and savings, are shielded. The filing creates a public record of the LLC’s formation, accessible through the Secretary of State and the local county probate office where the business is registered. It is the first step in the formation process, preceding internal documents like an operating agreement.
Key Information for Your Alabama Certificate of Formation
Preparing to file your Certificate of Formation requires gathering several pieces of information. The name of your LLC must be unique and distinguishable from any other business registered in Alabama. It is a requirement that the name includes the phrase “Limited Liability Company” or one of its approved abbreviations, such as “LLC” or “L.L.C.” Before filing, you must reserve your chosen name with the Secretary of State. This reservation, which costs $28 for online requests or $25 for mailed ones, is valid for one year. You must attach the approved Name Reservation Certificate to your formation documents.
You must also designate a registered agent, who is responsible for receiving official legal and tax documents on behalf of the LLC. This agent must have a physical street address in Alabama, as P.O. boxes are not permitted for this purpose.1Justia Law. Alabama Code § 10A-1-5.31 (2024) – Designation and Maintenance of Registered Agent and Registered Office The Certificate of Formation must list the name of the registered agent and the street address of the registered office. You will also need to provide the address of the LLC’s principal office, where the main business records are kept.
The form requires the names and addresses of the organizers, who are the individuals filing the document; they do not have to be owners of the LLC. While most LLCs have a perpetual duration, you can specify a different term if needed. The certificate must also include a statement confirming the LLC has at least one member. The official, fillable Certificate of Formation form can be found on the Alabama Secretary of State’s website.
How to File Your Alabama Certificate of Formation
Once you have completed the Certificate of Formation, you can submit the documents to the Alabama Secretary of State. The state offers two primary methods for filing: online or by mail. Online filing is the faster option, conducted through the Secretary of State’s online business services portal. This method provides near-immediate confirmation of your LLC’s formation upon successful submission and payment.
For those who prefer to file by mail, two typed copies of the completed Certificate of Formation and the filing fee must be sent to the Secretary of State, Business Services division, at P.O. Box 5616, Montgomery, Alabama 36103. It is recommended to include a self-addressed, stamped envelope to receive a filed copy back for your records. Mailed filings can take one to two weeks for processing.
The standard filing fee for a domestic LLC’s Certificate of Formation is $200. If filing online, this fee, plus a small processing charge, can be paid via credit or debit card. For mail-in submissions, payment must be made by check or money order payable to the Alabama Secretary of State. A portion of this fee, specifically $100, is directed to the treasurer of the county where the LLC’s initial registered agent is located.
Next Steps After Your Certificate is Filed
After your Certificate of Formation is successfully filed and approved by the Alabama Secretary of State, you will receive confirmation. If you filed online, this confirmation is delivered via email almost immediately. For mail filings, an approved and stamped copy of the certificate will be returned to you, which serves as official proof of your LLC’s legal existence.
It is important to keep a copy of the approved Certificate of Formation with your company’s permanent records. Some of the immediate next steps include applying for an Employer Identification Number (EIN) from the IRS, which is required for tax purposes, hiring employees, and opening a business bank account.
Finally, you must address the state’s Business Privilege Tax. An initial return is due to the Alabama Department of Revenue within 2.5 months of formation. However, businesses with a tax liability of $100 or less are exempt from both paying the tax and filing the return.2Alabama Legislature. Rule 810-2-8-.10 Business Privilege Tax Filing Requirements, Clarifications and Explanations