Most states did not adopt laws allowing the formation of LLCs, or limited liability companies, until the late 1980s to mid 1990s. Wyoming was the first state to adopt such a law in 1977 in an attempt to attract business to its state. Other states followed suit after an IRS ruling determined how LLCs would be taxed. Alabama first passed its Limited Liability Company Act in 1993, and various revisions have been adopted since.
Prepare or have your attorney prepare your articles of organization. A standardized form for these articles may be found on the secretary of state’s website (see Resources). Choose “Business Services” then scroll to the “Download Forms” link. From the resulting “Business Entities Downloads” page, click on the “Start Download” link beside the “Domestic LLC Articles of Organization Guidelines” option and download the form provided. Print out and complete the form with the name of the LLC, the duration or length of time the LLC will be in effect, the name of the registered agent and her address, as well as the names of all the members and any managers of the LLC.
File the articles of organization by visiting the probate judge’s office in the county where the LLC is organized. Alabama requires filing the documents at the county level. The county office forwards the necessary paperwork to the state for filing with the secretary of state’s office. County filing fees vary, with amounts being found on most county websites. State filing fees are $40 as of December 2010. Provide two checks at the time of filing, one for county and one for state filing fees.
Prepare an operating agreement, or have an attorney prepare one for your LLC. An operating agreement is optional in Alabama, but many commercial investment LLCs or LLCs with unrelated members may consider an operating agreement essential to the operation of the business. An operating agreement, being the governing document for the LLC, defines the rules and regulations under which the business may operate. If an LLC doesn’t have an operating agreement, state law will govern the actions of the LLC.