Steps to Setup Limited Liability Corporation

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Read below to learn how to set up a LLC.

 Steps to Setup Limited Liability Corporation

Step 1:  Choose a Business name and check its availability.

–         You will need your business address, name, number.

–         Check Business name:

 Step 2: File Articles of incorporation with State.

–          Secretary of State and pay the required filing fee.

–          Alabama Secretary State – THE SECRETARY OF STATES FILING FEE IS $40.


 Step 3: Prepare and Sign or Adopt an Operating Agreement:

–          This is not required by the state.

–          The Operating Agreement is an essential document which sets forth the rights, duties and obligations of the members of the LLC. It also sets forth whether the LLC will be managed by the members (owners) or by certain other individuals or entities.

 Step 4: Conduct Organizational Meeting and minutes.

–          This is not required by a LLC.

 Step 5: Written Documentation of Ownership Interests In LLC

–          A Membership Interest may consist of any number of units of the LLC. However, the most important concept is that Membership Interests are usually described as a percentage of the whole (which is 100%) or as a sharing ratio of the whole.

–          Membership interests determine certain legal rights such as voting rights and may be important for making distributions of income.

 Step 6:  Obtain a New Employer ID# (EIN) from the IRS: 

–          This is fairly self evident but each separate legal entity requires a new or different federal tax identification number (EIN) from the Internal Revenue Service (IRS). This is true because the entity is considered separate and apart under the law from the individual owners. The exception to this with LLC’s is when you have a one person LLC. When an LLC is owned and operated by just one person, that person has the option of reporting taxes on his/her own social security number or obtaining a new EIN #.

–          The best and quickest way is via online.


Step 7: Set Up Separate Bank Account(s) for the LLC:

 – Set up business banking at your local Bank branch.  They will need the business name, articles of Incorporation and Tax identification numbers.

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