How to Start an LLC in Alabama

Starting an Alabama LLC means reserving your business name, filing a Certificate of Formation with the Alabama Secretary of State, appointing a registered agent, and checking tax and license requirements before you begin operating.

Legal.com can help you form your Alabama LLC with a guided filing process and state-specific support for the steps that come after approval.

Alabama LLC Quick Facts

• Filing agency: Alabama Secretary of State
• Formation document: Certificate of Formation
• Filing fee: $200
• Name reservation: Required before filing formation documents
• Registered agent required?: Yes
• Annual report: Alabama LLCs generally do not file a separate Secretary of State annual report like corporations, but tax filings may apply
• State tax follow-up: Alabama Business Privilege Tax rules may apply through the Alabama Department of Revenue

How Much Does It Cost to Start an LLC in Alabama?

The Alabama Secretary of State lists the domestic LLC filing fee as $200. This is the state filing fee for the Certificate of Formation.

Alabama LLC owners should also plan for possible post-formation costs, including name reservation, registered agent service, business licenses, professional licenses, and Alabama Department of Revenue tax requirements.

Common Alabama LLC costs include:

• $200 Certificate of Formation filing fee.
• Name reservation cost, if applicable.
• Registered agent service, if using a professional service.
• Business Privilege Tax filings or payments, if applicable.
• Local business license or professional license costs.
• EIN, operating agreement, banking, and tax professional support.

How to Start an LLC in Alabama

1. Choose and Reserve Your Alabama LLC Name

Your Alabama LLC name must include Limited Liability Company, L.L.C., or LLC. Before filing the Certificate of Formation, Alabama requires a Certificate of Name Reservation.

Choose a name that is distinguishable from existing Alabama business names and works as a brand, domain, and customer-facing business identity.

2. Appoint an Alabama Registered Agent

Your Alabama LLC needs a registered agent to receive legal documents and official notices. The registered agent should have a physical Alabama address and be available during normal business hours.

Using a professional registered agent can help protect your privacy and reduce the risk of missing legal or state notices.

3. File the Alabama Certificate of Formation

To create the LLC, file the Certificate of Formation with the Alabama Secretary of State. The state filing fee is $200.

The filing generally includes:

• LLC name.
• Name reservation information.
• Registered agent name and address.
• Principal office information.
• Organizer information.
• Effective date, if different from filing date.

4. Create an Operating Agreement

An operating agreement explains how the Alabama LLC is owned and managed. It can cover member ownership, voting rights, profit distributions, management authority, member changes, and dissolution rules.

The operating agreement is an internal company document. It is useful for both single-member and multi-member LLCs.

5. Get an EIN

An EIN is a federal tax ID from the IRS. Your Alabama LLC may need one to open a business bank account, hire employees, file taxes, or work with vendors.

6. Register for Alabama Taxes, Licenses, and Permits

After formation, check Alabama Department of Revenue requirements and local licensing rules. Depending on the business, you may need sales tax registration, employer tax registration, professional licenses, or local business licenses.

7. Stay Compliant After Formation

Keep your Alabama LLC active by maintaining a registered agent, keeping company records current, filing required tax returns, paying any applicable tax, and renewing local or professional licenses.

Alabama LLC Taxes

Alabama LLC tax obligations depend on the company's tax classification, revenue, activities, and location. Alabama's Business Privilege Tax rules may apply to limited liability entities and disregarded entities organized, registered, or doing business in Alabama, though exemption rules may affect whether a return is required.

This is general information, not tax advice. LLC owners should review current Alabama Department of Revenue guidance or work with a tax professional.

Ready to Start Your Alabama LLC?

Legal.com can help you form your Alabama LLC and stay organized through the steps that follow formation.