How to Start an LLC in Alabama

What it costs to start an LLC in Alabama

The one cost nobody can avoid is the state's filing fee: $200 plus a mandatory $28 mandatory state name reservation. It goes to Alabama whether you file the Certificate of Formation yourself or pay someone to do it. After that, the cost that matters most is the recurring one, because it comes back every year for as long as the LLC exists.

State fees verified October 2026 and charged by the state, not by us. Our fee is separate and optional. If the state's fee changes before we file, we refund or invoice the difference.

Alabama repealed the LLC Secretary of State annual report effective Oct 1, 2024, so there is no report to file. A Business Privilege Tax return may still apply for larger entities (exempt when the calculated tax is $100 or less). Formation still requires a name reservation; the state's $28 online reservation fee is itemized at checkout.

So the minimum to form a Alabama LLC is $228, paid to the state. With our service it is $327. For how Alabama compares with other states, see LLC cost by state.

How to start an LLC in Alabama, step by step

Six steps take you from an idea to an LLC that is formed and in good standing. The first three happen before Alabama approves anything; the last three start once you have the approved Certificate of Formation.

1. Choose a name and check it's available

Your LLC's name must end with a designator such as "LLC", "L.L.C." or "Limited Liability Company", and it must be distinguishable from every other business already on Alabama's records. Words that suggest a regulated business, such as "bank" or "insurance", usually need extra approval.

Search the name in Alabama's business records on sos.alabama.gov before you file. A name that is taken or too close to an existing one is the most common reason a filing comes back. Alabama also requires a name reservation before formation; the state's online reservation fee is $28. Our guide to LLC name rules covers the details.

2. Name a registered agent

Every Alabama LLC needs a registered agent: a person or company with a street address in Alabama who accepts lawsuits and state notices on the company's behalf during business hours. The agent's name and address go on the Certificate of Formation and become public.

• Can you be your own agent? Yes, if you have a Alabama street address and are there during business hours.
• On the filing: Registered agent signature field on the Certificate of Formation.

More on the trade-offs in Do you need a registered agent?

3. File the Certificate of Formation

The Certificate of Formation is the document that creates your LLC. Alabama takes it online at sos.alabama.gov, and the filing fee is $200 plus a mandatory $28 mandatory state name reservation. It asks for the company name, the registered agent, a mailing address, and the people forming the company. Whoever signs it as organizer does not have to be an owner, which is how filing services sign on your behalf.

What becomes public: No members or managers. Only the organizer or attorney-in-fact (signature, typed name, title) and the preparer's name and full address.

Once Alabama approves the filing, your LLC exists. Keep the approved Certificate of Formation; banks ask for it.

4. Adopt an operating agreement

The operating agreement sets out who owns the LLC, how decisions get made, how profits are split, and what happens if an owner leaves. It is not filed with the state. Even a single-owner LLC benefits from one, because it shows the company is run as a separate business, and banks often ask for it.

You can write your own, use an attorney for complex ownership, or add our $79 self-help template from your order page after checkout. See Do you need an operating agreement?

5. Get an EIN from the IRS

An Employer Identification Number is your LLC's federal tax ID. Banks ask for it to open a business account, and you need it to hire employees. Apply directly with the IRS at irs.gov once Alabama has approved your LLC, so the name on the application matches the state record exactly. The IRS does not charge for it.

6. Meet Alabama's after-formation requirements

These are the filings and registrations Alabama expects after formation. Put each one on a calendar the day your LLC is approved.

• Alabama Business Privilege Tax initial return (Form BPT-IN). When: 2.5 months after formation. Cost: Not required if the computed tax is $100 or less, which is exempt for tax years beginning after 12/31/2023 under Act 2022-252. Most new small LLCs fall under this.
• Annual business privilege tax return (Form PPT). When: annually. Cost: only if the tax exceeds $100.

Beyond the state, most new LLCs also open a business bank account and check for state tax registrations and local licenses that fit their line of business. Our checklist, what to do after forming your LLC, walks through them.

How long it takes to form an LLC in Alabama

Two clocks run here: the time it takes to get the Certificate of Formation submitted, and the time Alabama takes to review it.

• Alabama's review: Online filings are described as near-immediate ('in the time it takes to type')
• State expedite: Since 1/1/2020 there is no separate $100 expedite fee for electronic filers (Secretary of State newsroom). No other expedite tiers verified.
• Our submission: standard orders go to the state within 3 business days. Same-day orders (+$50) placed by 2 PM Eastern on a business day are submitted that day.

Our same-day option speeds up our submission, not the state's review. State expedite fees, where Alabama offers them, are separate charges paid to the state. More in how long it takes to form an LLC.

Alabama LLC requirements at a glance

• A name ending in "LLC" or an equivalent designator, distinguishable from names already on file, reserved before formation.
• A registered agent with a Alabama street address.
• A Certificate of Formation filed with Alabama, with the $200 state fee and the $28 mandatory state name reservation.
• An operating agreement kept in your records (not filed, but recommended).
• Alabama has no recurring annual report for LLCs.

File it yourself or have us file it

Both routes give you the same Alabama LLC, and the state fee is the same either way. The difference is who does the work and who you call when something comes back.

Filing it yourself

1. Search your name in Alabama's records on sos.alabama.gov.
2. Line up a registered agent.
3. Complete the Certificate of Formation online at sos.alabama.gov and pay $228 to the state.
4. Watch for approval and save the filed document.
5. Calendar Alabama's after-formation deadlines.

Cost: $228. If your details are straightforward and you are comfortable with state forms, this is a perfectly good way to do it.

Having us file it

People choose a service when they want the filing right the first time without learning Alabama's form, or when their time is worth more than the fee. For $99 on top of the state fee we:

• check the name against Alabama's records before anything is filed;
• prepare the Certificate of Formation from a short online application;
• submit it within 3 business days, or the same business day for +$50;
• email you the approved documents and Alabama's next deadlines;
• answer questions by email and phone.

Cost: $327, with the state fee passed through at cost on its own line.

Start your Alabama LLC or read more about our Alabama LLC filing service.