Cost to Form an LLC in Alabama

The cost to start an Alabama limited liability company (LLC) online is $208. This fee is paid to the Alabama Secretary of State when filing the LLC’s Certificate of Formation.

Use our free Form an LLC in Alabama guide to do it yourself.

Or simply use a professional service:

four point six out of five ZenBusiness ($39 + State Fees)

Three out of Five Stars LegalZoom ($149 + State Fees)


How Much Does an LLC Cost in Alabama?

Alabama LLC Online Filing Fee: $208

The main cost of forming an LLC is the $208 fee to file your LLC's Certificate of Formation online with the Alabama Secretary of State.

Registered Agent Fee

In Alabama you can be your own registered agent, but using a registered agent service helps keep your company in compliance and reminds you of important filing deadlines and avoid late fees.

Registered agent fees start at $39 for the first year. We recommend using:

OR:

Read our guide to learn more about Alabama Registered Agents. You can also read our full guide on the best registered agent services.

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.

Business Permits and Licenses

Depending on your industry and geographical location, your business might need federal, state, and local permits/licenses to legally operate in Alabama. This is true whether you form an LLC or any other type of business structure.

Learn more about state and local licensing with our guide to getting an Alabama Business License.

Other LLC Filing 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.

Doing Business As (DBA) 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.

Certified Document Copies
Obtain certified copies of your Alabama business documents by ordering through the Secretary of State and paying $10 + $2 per page

Certificate of Compliance
Also known as an Alabama certificate of good standing, you can obtain this document by ordering through the Department of Revenue and paying the $14 fee. This document is often required by banks and lending institutions.

How to Register an Alabama LLC Yourself

Forming an LLC yourself is easy; just follow the five steps below.

Recommended: If you already have a business that is running as a sole proprietorship, visit our How to Change from a Sole Proprietorship to LLC page.

Five Basic Steps to Start an LLC in Alabama

Step 1: Name Your Alabama LLC
Step 2: Choose a Registered Agent
Step 3: File a Certificate of Formation
Step 4: Create an Operating Agreement
Step 5: Get an EIN

Step 1: Name Your Alabama LLC

When you name your Alabama LLC, you’ll need to choose a name that:

  1. Is available for use in the state of Alabama
  2. Meets Alabama naming requirements
  3. Is available as a web domain

Recommended: Visit our Start an LLC in Alabama guide for detailed naming rules and instructions for registering a business name in Alabama.

Not sure what to name your business? Check out our How to Name a Business guide and free LLC Name Generator.

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 create a business website today, you may want to buy the URL in order to prevent others from acquiring it.

Find a Domain Now

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Step 2: Choose a Registered Agent

All LLCs in Alabama must appoint a registered agent. A registered agent primarily acts as your LLC’s main point of contact with the state. But most importantly, they are responsible for accepting service of process in the event your business is sued.

Your Alabama registered agent must:

  • Be at least 18 years or older
  • Have a physical address in Alabama
  • Be available during normal business hours to accept service of process
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Recommended: Get a free year of registered agent services when you hire ZenBusiness to form your LLC. $39 (plus state fees).

ZenBusiness

Step 3: File the Certificate of Formation

The Alabama Certificate of Formation is a document that is filed with the Alabama Secretary of State to form an LLC. The fee for filing a Certificate of Formation is $208 online.

For detailed instructions for completing the Certificate of Formation, visit our How to File the Alabama Certificate of Formation guide.

File an Alabama Certificate of Formation

OPTION 1: File Online With Alabama Secretary of State Online Services

File Online

- OR -

OPTION 2: File the Certificate of Formation by Mail

Download Form


State Filing Cost: $200 by mail and $208 online, payable to the Secretary of State

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

Step 4: Create an 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.

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

Why are operating agreements important? A comprehensive operating agreement ensures that all business owners are on the same page and reduces the risk of future conflict.

For more information on operating agreements, read our Alabama LLC operating agreement guide.

Step 5: Get an EIN

What is an EIN? An EIN or Employer Identification Number is a nine-digit number issued by the Internal Revenue System (IRS) to identify a business for tax reporting purposes. An EIN is essentially a Social Security number (SSN) for your company.

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

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Free EIN: You can get an EIN from the IRS website (free of charge) after forming your business.

Alabama LLC Cost FAQ

Do you have to pay for an Alabama LLC every year?

Yes, each year Alabama LLCs have to pay for a business privilege license and the business privilege tax. The tax is a minimum of $100, and the cost of the license varies depending on the county.

Is an LLC really necessary?

An LLC provides limited liability protection. This means an LLC protects your personal assets in the event of a business loss, such as a lawsuit or unpaid debt.

We recommend any small business that carries even the smallest amount of risk or liability to form an LLC. Learn more in our Should I Start an LLC guide.

What is the cheapest way to get an LLC?

You can save money on getting an LLC by completing the formation process yourself, making your own operating agreement, being your own registered agent, and getting your own EIN.

Check out our How to Save Money Forming Your LLC guide to learn more.

Can I pay myself a salary from my LLC?

You can pay yourself a salary from your LLC, but it would be called a draw or distribution if your LLC is taxed in the default way by the IRS.

Visit our How to Pay Yourself from an LLC guide to learn more.

Is an S corp better than an LLC?

An S corporation (S corp) is an IRS tax status, not a type of business entity. An LLC can be taxed in the default way or as an S corp. For some businesses, being taxed as an S corp can make lots of sense.

Check out our LLC vs. S corp guide to find out if S corp status is right for your business.

What’s better: sole proprietorship or LLC?

A sole proprietorship is only good for businesses that carry very low risk of liability because sole proprietorships don’t offer any liability protection.

Learn more in our sole proprietorship vs. LLC guide.

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