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An Alabama LLC exists once the Secretary of State files your Certificate of Formation. The fee is $200. Before you can file, you need a Certificate of Name Reservation in hand. On paper, the two steps cost $225 together: $200 for the filing and $25 for the reservation. Our Alabama business guide covers the entity search that goes with this.
Why does the name step come first in Alabama?
Most states let you reserve a name if you want to. Alabama makes it part of the process. The Secretary of State's LLC page says you must obtain a Certificate of Name Reservation, citing section 10A-1-4.02(f), before you file formation documents.
The fee schedule lists a name reservation at $25, or $28 if you do it online and print it at once. The state notes that online fees combine the statutory fee with a vendor portal fee.
The name itself must contain the words Limited Liability Company or the abbreviation L.L.C. or LLC. Check what is taken before you pay. Our guide to checking LLC name availability shows how, and the name reservation guide explains what a hold does.
Who can be your registered agent?
Every Alabama LLC must keep a registered agent and a registered office in the state. Under Code of Alabama section 10A-1-5.31, the agent can be:
- an individual who lives in Alabama, or
- a domestic or foreign entity registered to do business in Alabama.
The agent must keep a business office at the registered office address. That address must be a street address where process can be served. It does not have to be your place of business, and it cannot be only a mailbox or an answering service.
If you plan to serve as your own agent, read being your own registered agent first. Our Alabama registered agent page covers changes and resignation.
How do you file the Certificate of Formation?
- Reserve the name and keep the certificate the state sends you.
- Download the domestic LLC Certificate of Formation from the Secretary of State's LLC page.
- Fill it in with your reserved name, your registered agent and office, and the other items the form asks for.
- Send the original and one copy, with the $200 fee, to the Business Entities Division in Montgomery.
- Wait for the filed copy.
The same page lists a mailing address and a street address for the division. Alabama does not publish a processing time that we could confirm, so we give none.
The state also runs an online portal through Alabama Interactive for some services. Online fees include the portal charge, so they run a little higher than the paper amounts.
What should you do after the LLC is approved?
Write an operating agreement. Alabama does not take it for filing, but your members and your bank will want one. Our operating agreement guide has a free template. Then get an EIN from the IRS, which is free: how to get an EIN. Open the bank account in the LLC's name once you have both.
What does an Alabama LLC pay every year?
Alabama has no annual report at the Secretary of State. The yearly duty sits with the Department of Revenue instead. For LLCs, the business privilege tax return is due no later than two and a half months after the start of the taxable year.
The privilege tax page says the rate runs from $0.25 to $1.75 for each $1,000 of net worth in Alabama. It lists a $100 minimum, then says taxpayers who would owe that minimum pay $50 in its place. The maximum is $15,000 for most taxpayers. The same page lists a $500 maximum for an electing Family Limited Liability Entity.
A certificate that proves your LLC exists is a Certificate of Existence. It costs $25, or $28 online.
Forming from another state
An LLC formed elsewhere registers in Alabama instead. The foreign registration fee is $150. See foreign LLC registration. Neighbours often compared with Alabama are Georgia, Tennessee and Florida.
Ready to go? The start an LLC form takes your details.
After approval, check the rules in our Alabama business license guide.