In Alabama, the most common structure for real estate enterprises is an LLC. This is due to the ease with which a limited liability corporation (LLC) may be formed and operated.
If your real estate firm is sued, an LLC may safeguard your personal assets (vehicle, home, money). LLCs also provide credibility and tax-saving possibilities.
It Is Simple to Form a Real Estate LLC in Alabama
In Alabama, you may form a real estate LLC by filing the Certificate of Formation with the AL Secretary of State. In Alabama, forming a real estate LLC costs $200.
The first step in organizing a real estate LLC is to choose a firm name. You must offer your company a distinct name that complies with Alabama naming regulations.
When you submit your Certificate of Formation, you will formally register your name.
A registered agent must be included when you submit your Certificate of Formation.
The role of a registered agent is to receive legal papers such as service of process and tax notifications on behalf of your LLC.
A person or a registered agent service might serve as the registered agent for your real estate LLC. Although you may serve as your own registered agent, many company owners choose to employ a registered agent service.
Consider the following while selecting a registered agent:
You must submit the Certificate of Formation with the Alabama Secretary of State to register your Alabama LLC. This may be done online or in the mail.
You must send a copy of your Name Reservation Certificate when submitting the Certificate of Formation by mail. Online filers have the option of reserving their name at the time of creation.
An LLC operating agreement is a legal document that defines your real estate LLC’s ownership and member responsibilities.
An operating agreement may benefit even single-member LLCs.
Your operating agreement should include the following provisions:
You may include conditions in your real estate LLC operating agreement as long as they do not violate Alabama law.
The US Internal Revenue Service (IRS) uses an Employer Identification Number (EIN) to identify and tax firms. It’s essentially a business’s Social Security number.
Following the Formation of a Real Estate LLC
