Downloadable Alabama S Corporation Kit
Trying to form an S corporation in Alabama? Maybe you should do the set up yourself. The process is actually pretty easy.
I'm going to briefly describe the process so you know what you're getting into. But note, too, that you can purchase and download one of my do-it-yourself S corporation kits for Alabama which will make the work even easier.
Step 1: Form a Corporation or LLC
You form an Alabama LLC or corporation as your first step. And, ironically, this step only takes a few minutes of your time. You simply complete a free form available at the Secretary of State's website. The Secretary of State provides free instructions, but you may not need instructions. The Alabama LLC and incorporation forms make the process easy. You enter bits of information into the form like the business name and address.
After you complete the form, you send it into the state with a check for $100 or information to bill your credit card. And that's it.
Hint: The Alabama Secretary of State website provides free downloads of the necessary forms, available here: http://www.sos.alabama.gov/Downloads/corpForms.aspx
Step 2: Get an ID Number
The next step you take is get a taxpayer identification number for your new LLC or corporation.
Taxpayer identification numbers for LLCs and corporations are like social security numbers, but have a different name--they're called employer identification numbers. To get one of these numbers, you fill out and submit an SS-4 form to the Internal Revenue Service. Note that the Internal Revenue Service website supplies free, downloadable copies of the SS-4 form. Here's the URL: http://www.irs.gov/pub/irs-pdf/fss4.pdf
Step 3: Elect Subchapter S Treatment
The third step you take: Make a Subchapter S election to turn your corporation into a subchapter S corporation or your LLC into a subchapter S LLC. By the way, you just did read that right. Both corporations and limited liability companies can make Subchapter S elections.
To make the S election, the LLC or corporation files a 2553 form with the Internal Revenue Service service center in Ogden, Utah. No separate Alabama sub S election is required. The state of Alabama recognizes the federal election.
Do-it-yourself Alabama Options
You take three simple steps to set up an S corporation in Alabama.
However, that said, if you don't feel comfortable doing this completely on your own, just download a do-it-yourself kit for Alabama. Either kit gives you more detailed, step-by-step instructions on how to properly set up your own S Corporation. As you might expect, because there are two "flavors" of S corps, we sell two versions of the Alabama kit.
Option 1: LLC Version
Probably the cleanest and over time the easiest way to have an S corporation is to form a limited liability company and then make the Sub S election. This S Corporation kit includes a 20+ page PDF document that gives a bit more background on starting an S corporation using a limited liability company, provides the step-by-step instructions for forming an Alabama LLC and obtaining that federal tax identification number, and then carefully discusses why and describes how to make the Subchapter S election.
Of course, the kit includes examples of completed Alabama and federal forms so you know exactly what your forms and documents should look like. And the kit includes two sample operating agreements, one for use with single member Alabama limited liability companies and one for use with multiple member Alabama limited liability companies. (An LLC owner is called a "member.")Purchase and Download
Option 2: Regular Corporation Version
Most small businesses should use an LLC as the platform for their S corporation. But you don't have to go that route. You can also take the traditional approach and create a regular corporation. Once this corporation is set up, you can then make a Subchapter S election for it.
If you want to take the traditional route, consider working from our "regular corporation" kit. This kit provides a 35-page PDF document that describes how to use a traditional corporation as your platform including the precise steps for incorporating in Alabama, for getting your federal tax identification number, and for electing S corporation tax treatment. The kit also includes sample corporate by-laws, which you or even your lawyer can to use for as the basis of your new corporation's by-laws.Purchase and Download
Additional Information You May Find Useful
If you want additional information about how to maximize the tax savings related to running a business or investment venture, you may also be interested in one of our downloadable e-books (see descriptions below). Each book covers a category of tax planning topics that easily save a business owner significant amounts of income or self-employment taxes (potentially thousands of dollars a year) and is instantly downloadable.
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