How to Start an LLC in Alabama

Step 1: Name Your Alabama LLC

Before you get started, you will need to pick a suitable name for your Alabama LLC. 

This will need to comply with all applicable naming requirements under Alabama law and be both succinct and memorable, as this will make it easily searchable by your potential clients.

1. Important Naming Guidelines for Alabama LLCs:

• Your name must include the phrase “limited liability company” or one of its abbreviations (LLC or L.L.C.).
• Your LLC’s business entity name cannot contain words that could lead to confusion between your business and a government agency (e.g., FBI, Treasury, State Department, etc.).
• Certain words — such as “Bank,” “Attorney,” and “University” — are restricted, meaning that your LLC may need to obtain specific paperwork, as well as hire a licensed individual, in order to include them. 
• Your name must be sufficiently distinguishable from any other Alabama limited liability company, corporation, limited partnership, or registered limited liability partnership.

For more information, see the Alabama Code guidelines for naming LLCs.

2. Conduct a Business Name Search in Alabama

To check whether your desired name has already been taken by another business entity in Alabama, you can elect to perform a Business Entity Search on the Alabama Secretary of State’s website.

For more information, you can have a look at our Alabama LLC Name Search guide.

3. Reserve Your LLC’s Name 

If you plan to mail in your LLC registration, you will need to complete the Name Reservation Request for Domestic Entities form at least two weeks prior to registration. 

If you plan to start your LLC online, you will reserve your business name automatically when you complete your LLC’s registration.

Keep in mind that even if you don’t plan on registering your LLC right away, it might be a good idea to reserve your LLC name online for up to one year ($25 processing fee).

4. Conduct a Domain Name Search

We recommend that you check online to see if your business name is available as a web domain. Even if you don’t plan to make a business website right away, this is an extremely important step as it will prevent others from acquiring it, potentially saving you both time and money in the long term.

Once you have verified your name is available, you may now select a professional service to complete the LLC formation process for you.

FAQ: Naming an Alabama LLC

Step 2: Choose a Registered Agent in Alabama

After you find the right name for your LLC, you will need to nominate an Alabama registered agent. This is a necessary step in your Certificate of Formation (i.e., the document used to file and register your LLC with the Secretary of State).

What is a registered agent? A registered agent is an individual or business entity responsible for receiving important tax forms, legal documents, notice of lawsuits, and official government correspondence on behalf of your business. In essence, your registered agent is your business’s primary point of contact with the state.

Who can be a registered agent? A registered agent must be a resident of Alabama or a corporation authorized to transact business in the state. You can choose to elect an individual within the company (e.g., yourself, etc.), use a business attorney, or hire a registered agent service.

FAQ: Nominating a Registered Agent

Step 3: File the Alabama LLC Certificate of Formation

To register your LLC in Alabama, you’ll need to reserve your LLC name and file the Certificate of Formation with the Secretary of State. You can do this online or by mail.

Before filing, make sure you have completed your Certificate of Formation correctly. You will need to have filled in the following sections:

• The name of your LLC
• A copy of your name reservation certificate (if filing by mail)
• The name and address of your LLC’s registered agent
• The mailing address of the registered office (if different from street address)
• The date upon which this document will become effective (if not immediately)
• The name and signature of the organizer

File the Alabama Certificate of Formation

OPTION 1: File Online With Alabama Interactive

File Online

– OR –

OPTION 2: File by Mail

Download PDF

State Filing Cost: $200

Mailing Address: 
Secretary of State
Business Services
P.O. Box 5616
Montgomery, AL 36103-5616.

For help with completing the form, visit our Alabama Certificate of Formation guide.

If you’re expanding your existing business to the state of Alabama, you’ll need to register as a foreign limited liability company (LLC).

FAQ: Filing Alabama LLC Documents

Step 4: Create Your Alabama LLC Operating Agreement

An operating agreement, known in Alabama as a limited liability company agreement, isn’t required for Alabama LLCs, but it’s a good practice to have one.

An operating agreement is a legal document outlining the ownership and operating procedures of an LLC.

A comprehensive operating agreement ensures that all LLC members are on the same page and reduces the risk of future conflict.

You can use the free tool in our Business Center to create a custom operating agreement in minutes — or download our free templates:

• Alabama Single-Member LLC Operating Agreement
• Alabama Multi-Member LLC Operating Agreement

FAQ: Creating an Alabama LLC Operating Agreement

Step 5: Get an Alabama LLC EIN

You can get an Employer Identification Number (EIN) from the IRS for free. It is used to identify business entities and keep track of a business’s tax reporting. It is essentially a Social Security number (SSN) for the company.

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

• To open a business bank account for the company
• For federal and state tax purposes
• To hire employees for the company

Where do I get an EIN? An EIN is obtained from the IRS (free of charge) by the business owner after forming the company. This can be done online or by mail.

FOR INTERNATIONAL APPLICANTS: You do not need an SSN to get an EIN. Learn more here.

Get an EIN

Option 1: Request an EIN from the IRS

Apply Online

– OR –

Option 2: Apply for an EIN by Mail or Fax

Download Form

Mail to:
Internal Revenue Service
Attn: EIN Operation
Cincinnati, OH 45999

Fax: (855) 641-6935

Fee: Free

FAQ: Getting an EIN

Step 6: File Your Initial Business Privilege Tax Return 

In Alabama, all LLCs are required to file their Initial Business Privilege Tax (BPT) return within 2.5 months of formation. 

You can complete this filing online using the Alabama Department of Revenue website or by mail using Form BPT-IN. The minimum fee is $50 but may increase depending on federable taxable income and net worth. 

You will be required to file a BPT return and pay the business privilege tax yearly by April 15th.

Best LLC Services in Alabama Compared

For a comprehensive comparison, read our Best LLC Service review. We reviewed and ranked the top LLC formation services to help you determine the best fit for your new business. 

Important Next Steps to Protect Your Alabama LLC

After you’ve formed your LLC, you’ll need to complete key steps in order to:

• Separate your personal and business assets
• Stay compliant with state and federal laws

Get a Business Bank Account & Credit Card

Using a dedicated business banking account and business credit card is essential for personal asset protection.

When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your LLC is sued. In business law, this is referred to as piercing your corporate veil.

You can protect your business with these two steps:

1. Opening a business bank account:

• Separates your personal assets from your company’s assets, which is necessary for personal asset protection.
• Makes accounting and tax filing easier.

2. Getting a business credit card:

• Helps you separate personal and business expenses.
• Builds your company’s credit history, which can be useful to raise capital later on.

Get Insurance

Even though an LLC offers limited liability, you’ll still likely need to purchase some form of business insurance to protect your LLC’s assets. The most common types are:

• General Liability Insurance: A broad insurance policy that protects your business from lawsuits. Most small businesses get general liability insurance.
• Professional Liability Insurance: A business insurance for professional service providers (consultants, accountants, etc.) that covers against claims of malpractice and other business errors.
• Workers’ Compensation Insurance: A type of insurance that provides coverage for employees’ job-related illnesses, injuries, or deaths. In Alabama, businesses with five or more employees, including LLC members and corporate officers, are required by law to have workers compensation insurance.

Want to learn exactly what coverage your Alabama business may need? Read our full Alabama Business Insurance Guide.