Find out how to qualify your LLC to conduct business in Alabama.
If you own a company that was founded in a state other than Alabama, you must qualify or register it in Alabama in order to conduct business there. The requirements for qualifying your international (non-Alabama) limited liability corporation (LLC) to conduct business in Alabama are summarized below.
It should be noted that, unlike other states, Alabama does not have particular legislation for registering international LLCs. Instead, Alabama has a set of regulations that govern foreign company registration in general. These companies are referred to as foreign entities under Alabama law.
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What exactly is a Foreign LLC?
If your LLC is founded in another state, it is referred to as a foreign LLC in Alabama. In other words, being foreign does not imply being from another nation. Instead, it signifies that your company was formed under the laws of another state. A domestic LLC, on the other hand, is one that is created in the state in which it operates. This is a prevalent phrase in the United States. An LLC founded in Indiana, for example, is a foreign LLC in Illinois.
Doing Business in Alabama
According to Alabama foreign entity rules, if you are “transacting business” in Alabama, you must register your foreign LLC with the state. What exactly does this mean? In fact, Alabama law, like other states’, does not define the word “transacting business” in regard to overseas registrations.
State regulations determining when foreign enterprises must collect state sales tax in their state, on the other hand, give some advice on the subject. To be obligated to collect state sales tax on sales to citizens of a state, a firm must have a physical presence in, or nexus with, that state. In general, physical presence and nexus are synonymous and refer to:
a storage facility in the state
A shop in the state, an office in the state, or a sales representative in the state are all examples of state-based businesses.
Certain exclusions may apply, and the regulations might become more convoluted in situations such as Internet sales. However, if you have an office, a shop, a warehouse, or workers in another state, you must register your LLC as a foreign corporation in that state.
Some Activities Are Exempt
Certain acts, in general, do not constitute doing business in a state. In contrast to other states, Alabama’s corporate entity statutes do not specify any excluded activities. The following activities are expressly designated as exempt in most other states:
defending or settling a lawsuit dealing with internal business affairs such as holding member or manager meetings having a bank account in the state selling through independent contractors soliciting or obtaining orders that require acceptance outside the state before they become contracts creating or acquiring certain types of indebtedness sec
If your LLC’s sole activity in Alabama is one or more of the things above, you will most likely not need to register with the state. However, since Alabama law does not clearly mention any exempt activity, you should get further advice from a local company counsel.
Registration Application
You must submit a Foreign Limited Liability Company (LLC) Application for Registration with the Alabama Secretary of State to register your company in Alabama (SOS). The application form may be downloaded on the SOS website.
To complete the application, you must give the same information that you would provide to register an LLC in your home state. More precisely, for an Alabama registration application, you must provide:
If necessary, the full legal name of your LLC as recorded in the state where it was formed, as well as the fictitious name under which your LLC will operate in Alabama (a fictitious name is required if your LLC’s original name or something very similar is already in use by another Alabama registered business, or the original name does not meet the state’s LLC naming requirements because it does not include the words “Limited Liability Company” or the abbreviation “LLC” or “L.L
If a fake name is required, a statement verifying that the fictitious name has been duly adopted by the LLC members and the signer of the application under Section 10A-1-7.07 of the Alabama Code (covering Alabama’s corporate naming requirements) may be made.
the street address and, if different, the postal address of your LLC’s primary office the state in which your LLC was founded the date your LLC was created
a declaration attesting to the existence of your LLC as a legal LLC under the statutes of the state in which it was founded the name of your LLC’s registered agent in Alabama
the street address of your LLC’s original registered agent in Alabama and, if different, the agent’s postal address; the date your LLC started or will begin conducting business in Alabama; and an authorized signature.
You have the option of filing by mail or online. The standard filing cost is $150.
What Happens If You Do Not Sign Up?
If your LLC operates in Alabama without being registered, it will be unable to file a case in any of the state’s courts. Furthermore, the LLC may be susceptible to late filing costs and a state action to prevent it from conducting business in Alabama. However, not being registered does not render your LLC’s contracts null and void or bar your LLC from defending a lawsuit in Alabama. Furthermore, the restriction on a member’s personal culpability is not lifted just because the firm conducts business in Alabama without being registered.
Forming a Foreign Corporation
The regulations and standards for international qualifying in Alabama are generally the same whether your company is structured as a corporation or an LLC. For paperwork, information, and filing requirements for registering a foreign company in Alabama, see the Alabama Secretary of State’s website.