How Much Does It Cost to Start an LLC in Alabama?
The cost to start an LLC (limited liability company) online in Alabama is $200. This fee is paid to the Alabama Secretary of State when filing the LLC’s Certificate of Formation.
We recommend Northwest ($29 + State Fees) to help form your LLC.
How Much Does an LLC Cost in Alabama?
Alabama LLC Online Filing Fee: $208
The main cost to start an LLC in Alabama is the $200 fee to file your LLC's Certificate of Formation online with the Alabama Secretary of State.
For a look at LLC costs in every state, read our other Cost to Start an LLC and How to Form an LLC guides.
Alabama Business Privilege Tax and Annual Report: $100+
Every LLC that conducts business in Alabama is required to submit an annual PPT form, or privilege tax form for pass-through entities, before the third week of April. This tax is between 0.00025% and 0.00175% of the net worth of your LLC.
The exact tax rate depends on your business's income during the previous taxable year. The minimum Business Privilege Tax amount is $100.
Alabama Business Privilege License: Varies
In Alabama, all businesses are required to purchase an annual license to do business known as the Business Privilege License. You must purchase a license in every county where you do business. Licenses can be purchased from your local county Probate Judge. Fees vary by county.
Cost to Form a Foreign LLC in Alabama
If you already have an LLC that is registered in another state and you’d like to expand your business into Alabama, you’ll need to register your LLC as a foreign LLC in Alabama.
The cost for registering an Alabama foreign LLC is $156 online or $150 by mail. You can register a foreign LLC in Alabama by filing a Foreign Limited Liability Application for Registration with the Alabama Secretary of State. This can also be done by mail.
Optional LLC Formation Costs
There are optional fees associated with LLC formation:
LLC Name Reservation
Reserve your name for up to 12 months prior to LLC formation by filling the Name Reservation Request Form for Domestic Entities. The filing fee is $28 for online fillings and $25 if filing by mail.
Foreign LLC Name Reservation
Reserve your name for up to 12 months prior to LLC formation by filing the Name Reservation Request Form for Foreign Entities. The filing fee is $28 for online fillings and $25 if filing by mail.
Trade Name
File a trade name application to create a name other than your legal LLC business name. The filing fee is $30 for online fillings and $31.20 if filing by mail.
Ready to Start Your Alabama LLC?
Read our LLC formation services review to choose the best service for you.
Alabama LLC Annual Fee
Maintaining an LLC in Alabama includes various costs influenced by several factors:
- Annual Business Privilege License and Tax: Compliance in Alabama also necessitates an Annual Business Privilege License and tax. Privilege license costs vary by county, and the tax carries a minimum cost of $100.
- Additional Business License Fees: In Alabama, the fee for a business license varies, influenced by your business type and location.
- Registered Agent: Your LLC needs to appoint a registered agent who is based in Alabama. Though a registered agent service may not be necessary for all businesses, the pros outweigh the cons.
Remember, always keep your LLC information up-to-date to avoid penalties, and adhere to the annual filing requirements, such as the Business Privilege Tax, to avoid late fees. Using these tips, you can efficiently manage the costs associated with maintaining your Alabama LLC.
How to Register an Alabama LLC Yourself
Forming an LLC in Alabama is easy. Simply follow the steps outlined on this page.
Recommended: Using an LLC formation service like Northwest ($29 + State Fees) saves time and ensures compliance. Besides the low cost, we like their streamlined approach and excellent customer service.
Alabama LLC Cost FAQ
The filing fee to form an LLC in Alabama is $200. This payment is made to the Alabama Secretary of State to officially recognize your business.
Reserving a business name in Alabama incurs a cost of $25. You have to reserve a name before filing the Certificate of Formation (or when you file if you file online).
A registered agent is a necessary part of forming your LLC in Alabama. The cost for this service can vary, but generally, you might expect to pay around $100 per year. The agent's role is to accept legal documents and other important notices on behalf of your business.
Every LLC in Alabama is required to file an annual report with the Secretary of State. This costs $100 and serves to update the state with your business's current details.
Yes, aside from the filing, name reservation, registered agent, and annual report fees, there could be other costs. These could include creating a business website or using LLC formation services which offer comprehensive packages to handle most aspects of forming an LLC. The actual cost can vary based on individual needs and preferences.
Limited liability is a key feature of LLCs. This means the owners, also known as members, are not personally responsible for the business's debts and liabilities. In case of financial trouble or legal action, your personal assets, such as your home or personal bank accounts, are usually safe.
Pass-through taxation is the method by which LLCs are taxed. Instead of the business being taxed, the income and losses of the LLC are reported on the personal tax returns of the owners. This method can often result in tax savings, as it avoids the double taxation faced by corporations.
An LLC offers significant flexibility in Alabama. You can choose how to structure and manage your business in a way that suits you best. This might involve deciding how profits are shared or how the business makes decisions. This flexibility makes the LLC a popular choice for many entrepreneurs.
Yes, there are several LLC formation services that can help streamline the process of setting up an LLC in Alabama. These services handle much of the paperwork and ensure all necessary steps are taken, making the process much easier. These services do have a cost, which can vary based on the level of service provided.
Article Sources
Alabama Department of Revenue:
https://revenue.alabama.gov
Internal Revenue Service (IRS):
https://www.irs.gov/businesses/small-businesses-self-employed/employer-id-numbers
Alabama Secretary of State:
https://www.alabamainteractive.org/sos/introduction_input.action
Small Business Administration:
https://www.sba.gov/business-guide/launch-your-business/apply-licenses-permits
Chamber of Commerce - Alabama Chamber of Commerce List:
https://www.officialusa.com/stateguides/chambers/alabama.html