How to Start an LLC in Alabama
Forming an LLC in Alabama costs $200 in state filing fees, paid to the Alabama Secretary of State. Here is the full process, the real costs and the Alabama-specific rules most guides skip.
What it costs
| Item | Cost | Required? |
|---|---|---|
| State filing fee (Alabama Secretary of State) | $200 | Yes, one time |
| Business Privilege Tax return Alabama LLCs file no annual report with the Secretary of State; the recurring state obligation is the Business Privilege Tax. | $0 when the computed tax is $100 or less; otherwise the computed tax, minimum $50 | Only when the tax exceeds $100 |
| Registered agent service | $100–$200 / year | Optional (you can be your own) |
| EIN from the IRS | Free | Yes, for banking and taxes |
| Operating agreement | Free–$200 | Strongly recommended |
Step by step
Choose and check your LLC name
Your name must be distinguishable from existing Alabama entities and include "LLC" or "Limited Liability Company". Search availability for free on the Alabama Secretary of State website before you fall in love with a name.
Appoint a registered agent
Required by law: a person or company with a physical street address in Alabama, available during business hours to receive legal mail. You can be your own agent if you live in the state; most founders who value privacy or don't live there use a service ($100 to $200 per year).
File your formation documents ($200)
File Articles of Organization (in some states called a Certificate of Formation) with the Alabama Secretary of State. Standard processing: 1-2 business days online. This is the step that legally creates the LLC.
Get your EIN from the IRS (free)
The Employer Identification Number is your LLC's federal tax ID, needed for bank accounts, hiring and tax filings. The IRS issues it free. If the LLC's principal place of business is in the US and the responsible party has an SSN or ITIN, the IRS online application issues the number immediately (one EIN per responsible party per day). Owners without an SSN or ITIN, including most non-US founders, cannot use the online tool: they file Form SS-4 by fax (about 4 business days), by mail (about 4 weeks) or, for international applicants, by phone at 267-941-1099. Details and the exact numbers are in our non-resident guide. Never pay a service just for an EIN.
Create an operating agreement
Alabama does not legally require an operating agreement, but banks, investors and courts expect one, and it is the document that protects your limited liability if ownership is ever disputed.
Handle ongoing compliance
Alabama LLCs do not file an annual report with the Secretary of State. The recurring obligation is the Business Privilege Tax, computed on the LLC's net worth in Alabama. For tax years beginning after December 31, 2023, if the computed tax is $100 or less you are exempt from both paying and filing, which covers most small LLCs. If your computed tax is above $100, file the initial return (Form BPT-IN) within two and a half months of formation and the annual return (Form PPT) by your federal return due date each year; the minimum tax in that case is $50. Confirm your position with the Department of Revenue or an Alabama CPA, and keep your registered agent current, because that is what the Secretary of State checks.
Worked examples and filing dates: Alabama Business Privilege Tax for LLCs, the $100 exemption explained.
Alabama LLC: frequently asked questions
How much does it cost to start an LLC in Alabama?
The state filing fee is $200, paid to the Alabama Secretary of State, plus a mandatory $25 name reservation. Ongoing state cost is usually $0: the Business Privilege Tax is fully exempt when the computed tax is $100 or less, which covers most small LLCs. Optional costs include a registered agent service (typically $100 to $200 per year) if you don't act as your own.
How long does it take to form an LLC in Alabama?
Typical processing time: 1-2 business days online. Many states offer paid expedited options if you need the LLC approved faster. The clock starts when the Alabama Secretary of State receives your filing.
Do I need a registered agent in Alabama?
Yes. Every Alabama LLC must continuously maintain a registered agent with a physical street address in the state to receive legal and official mail. You can serve as your own agent if you have an Alabama address and are available during business hours, or hire a commercial registered agent service.
Does an Alabama LLC have to file an annual report or pay the Business Privilege Tax?
Alabama LLCs do not file an annual report with the Secretary of State. They are subject to the Business Privilege Tax, but for tax years beginning after December 31, 2023 an LLC whose computed tax is $100 or less is exempt from paying and from filing the return. If the computed tax is above $100, the return and payment are due by the federal return due date, with a $50 minimum, and late filing brings penalties and interest from the Department of Revenue.
Not sure whether Alabama fits your situation?
Before you choose a filing package, talk through your business, location and goals with a real setup specialist. Get a clear formation roadmap at no cost and with no purchase obligation.
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Compare with other states
Fees and rules last reviewed September 2026. State fees change; always confirm with the Alabama Secretary of State before filing. This guide is general information, not legal or tax advice.