In Alabama, How Do You Form A Series LLC?

 

A series LLC in Alabama is a form of LLC that offers its owners and members unique liability and tax advantages. The series LLC is made up of a master LLC and one or more sub-series that branch out of it.

It is not difficult to establish your own Series LLC in Alabama. It’s easy with our step-by-step instructions!

Identify Your Series LLC
Select a Registered Agent and submit the Certificate of Formation.
Make an Operating Agreement for a Series LLC.
Get an EIN.

An illustration of how a series L L C permits its members to split a “parent” L L C’s assets and activities into a number of “child” series.

Step 1: Create a company name for your Alabama Series LLC.

You should know the answers to the following questions before naming your series LLC:

What are the legal requirements for naming an Alabama series LLC?
What are the standard name guidelines for a series LLC?
Is the name of my company accessible in Alabama?
Is my company name accessible as a URL, and if yes, how can I get it?

1. Series LLC name regulations differ per state. You are just obliged to observe typical LLC name rules in Alabama. Before completing your series LLC Articles of Formation, you must also complete the Certificate of Name Reservation for the parent LLC.

Alabama LLC Naming Regulations:

The word “limited liability corporation” or one of its acronyms must be in your name (LLC or L.L.C.).
Your LLC’s name cannot include terms that may be confused with a government organization.
Restricted terms (e.g., bank, attorney, university) may need extra documentation and the participation of a licensed professional, such as a doctor or lawyer, in your LLC.

2. Consider the following basic guidelines for making the titles of your series more identifiable, unified, and clear:

Include the phrase “protected series” in the name of each organization.
The parent LLC should be named in a manner that differentiates it from the kid series.
Include the parent LLC’s entire name in the name of each kid series.
The name of the asset should be included in the name of the kid series. This gives the public and creditors a better view of the assets.

3. Does my company name exist in Alabama? Do a name search on the State of Alabama website to ensure that the name you choose isn’t already used.

4. Set aside the name. You must submit a name reservation request to the Alabama Secretary of State either online or by mail. (The cost is $28 online and $10 by mail.)

5. Can I get a URL for my company name? We propose that you investigate if your company’s name is accessible as a web domain. Even if you don’t intend to create a company website right away, you may wish to purchase the URL to prevent others from doing so.

Step 2: Select a Registered Agent for Alabama Series LLC.

You must name a Registered Agent for your Alabama series LLC. The parent LLC’s Registered Agent must be the same for each child series.

What exactly is a Registered Agent? A registered agent is a person or corporation that agrees to deliver and receive legal documents on your LLC’s behalf. Service of process of legal action (if you are sued) and state filings are examples of such paperwork.

Who is eligible to be a Registered Agent? A registered agent must be an Alabama person or a company allowed to do business in Alabama. You may choose someone from your organization, even yourself.

Step 3: Submit your Certificate of Formation.

You must submit the Certificate of Formation with the State of Alabama to register your series LLC.

This may be done online or in the mail.

Section 5 of the Certificate of Formation provides a checkbox to indicate if you are incorporating a series LLC.

Step 4: Draft an Operating Agreement for a Series LLC.

When founding a series LLC in Alabama, an operating agreement is necessary. The operating agreement does not need to be submitted to the state.

What exactly is an operating agreement? An operating agreement is a legal document that outlines an LLC’s ownership and running processes.

Why are operating agreements necessary? The operating agreement is critical for a series LLC since it defines the series’ liability limits (asset protection).

Step 5: Get an EIN

What exactly is an EIN? A corporate entity is identified by its Employer Identification Number (EIN) or Federal Tax Identification Number. Each of your series LLC’s offspring series will need an EIN.

Why do I need an EIN? An EIN is necessary for the following activities:

To establish a commercial bank account for the firm
In terms of federal and state taxation
To recruit workers for the firm

How can I get an EIN for my LLC series? The IRS does not have precise procedures for obtaining an EIN for a series LLC’s child series. For each subsequent EIN, experts recommend utilizing the name of your series LLC coupled with the name of the child series.