How to Start an LLC in Alabama (2026)
Alabama makes you reserve your business name before you can file. That reservation costs $25 by mail or $28 online, on top of the $200 certificate of formation fee.
In This Article
- Overview
- Quick Facts
- Introduction
- Choose a Name for Your Alabama LLC
- Choose a Registered Agent in Alabama
- File Your Certificate of Formation with Alabama
- Get an EIN for Your Alabama LLC
- Create an Operating Agreement for Your Alabama LLC
- Open a Business Bank Account for Your Alabama LLC
- Federal BOI Reporting
- Top 3 LLC Services
- FAQ
- Next Steps
What You'll Learn in This Guide
This guide walks you through every step to legally form a Limited Liability Company (LLC) in Alabama, from picking a name to staying compliant year after year. We've kept it practical, current, and free of unnecessary fluff.
Note
Alabama LLC formation costs $228 in mandatory state fees, the $200 articles filing plus $28 of required first year filings. You can file DIY or through a formation service starting at $0.
Alabama LLC: Quick Facts
Last Verified: Sep 2026- Filing Fee (Online)
- $200
- Processing Time
- Not published by the state
- Expedited Available
- No
- Annual Report
- None required
- State Income Tax
- Yes
- Sales Tax Rate
- 4%
- Filed With
- Alabama Secretary of State
- Last Verified
- September 16, 2026
What You Need to Know About Forming an LLC in Alabama
Alabama makes you reserve your business name before you can file. That reservation costs $25 by mail or $28 online, on top of the $200 certificate of formation fee. Budget $225 to do the whole thing by mail, or $236 through the state portal.
An Alabama LLC puts a legal wall between your personal assets and your business debts. If the business gets sued or cannot pay, your savings, your home and your car stay out of reach. That separation is the whole point of forming one.
Alabama has a quirk worth knowing before you start. You must get a Certificate of Name Reservation from the Secretary of State before you are allowed to file. Ala. Code 10A-1-4.02(f) sets that rule, and most states have no equivalent. The reservation costs $25 by mail or $28 through the state portal. The portal issues it in real time, so you print it yourself and move on. It holds the name for one year.
What Alabama asks of you afterwards is lighter than most guides suggest. The state stopped requiring an LLC annual report on 1 January 2024. It will not accept one from an LLC now. The Business Privilege Tax still exists, charged on your net worth in Alabama. For tax years beginning after 31 December 2023, there is a full exemption at $100 or less of calculated tax. Those LLCs file no return at all. Most small LLCs are taxed at $1.00 per $1,000 of net worth, so the exemption covers a net worth up to $100,000.
The work runs in this order. Reserve your name. Line up a registered agent, the person or company that accepts legal mail for you. Then file your certificate of formation. After that, get your federal EIN, draft an operating agreement and open a business bank account.
Choose a Name for Your Alabama LLC
Alabama requires you to reserve your LLC name before filing. Your name must follow specific state rules and be distinguishable from every other business on file.
Before you can file anything in Alabama, you must reserve your LLC name with the Secretary of State. It costs $25 by mail or $28 through the state portal. The reservation holds the name for one year under Ala. Code 10A-1-5.14. The portal issues the certificate in real time, so you print it and go straight on to the formation filing. Check the name is free on the state business entity search before you pay.
Search available names →Alabama LLC Naming Rules
Name Reservation Details
- Reservation fee, $25 by mail or $28 online
- Reservation lasts 1 year from the date it is accepted
- The online route issues the certificate in real time
- Search available names at the Alabama Secretary of State website
State Specific
Alabama is one of the few states that requires a name reservation before you can file your certificate of formation. You cannot skip this step.
Pro Tip
Check the name on the state business entity database first. A name already on file will be rejected, and you pay the reservation fee either way.
Choose a Registered Agent in Alabama
Every Alabama LLC needs a registered agent. That is a person or company with a real street address in the state who can accept legal papers for you.
Your registered agent receives legal notices, tax documents and official state mail for your LLC. In Alabama the agent must be a person who lives in the state, or a company authorized to do business there. Either way the agent needs a physical street address in Alabama. A P.O. box will not do.
Your Three Options
- Be your own agent, free, but your address goes on the public record and you must be there in business hours
- Ask someone you trust in Alabama to do it, free, but it is a real responsibility for them
- Hire a registered agent service, usually $50 to $300 a year, which keeps your address private
Pro Tip
If you plan to use your own address, remember that it becomes part of the public record. A professional registered agent service keeps your home address private.
File Your Certificate of Formation with Alabama
This is the official step that creates your LLC. You'll submit your certificate of formation to the Alabama Secretary of State along with the $200 filing fee.
With your name reserved and your agent lined up, you file the Certificate of Formation with the state. The form asks for your LLC name and your agent details. It also asks who runs the LLC, the members or a hired manager, plus the principal address and organizer details. The fee is $200 either way. The Alabama.gov portal adds a card charge of about $8, so the online checkout comes to $208.
File Online
File by Mail
If you file by mail, send the completed form and payment to the Secretary of State, Business Services, P.O. Box 5616, Montgomery, Alabama 36103-5616. The state does not publish a processing time for this filing. Treat any figure you have seen quoted elsewhere as an estimate, and do not pick a launch date that depends on it.
State Specific
You must have your Name Reservation Certificate in hand before filing your certificate of formation. Alabama will not process your filing without it.
Recommended: Northwest Registered Agent
$39 + state fee. Includes registered agent, business address, domain, website, email, and phone. No upsells.
Get an EIN for Your Alabama LLC
Your EIN is a federal tax ID number that you'll need for taxes, hiring, and opening a bank account.
Apply for your EIN directly on the IRS website at no cost. The online form takes about 10 minutes. You get the number as soon as you finish. You need it to file taxes, hire staff and open a business bank account. Skip the services that charge for this, the IRS issues it free.
Apply for your EIN on IRS.gov →Create an Operating Agreement for Your Alabama LLC
Alabama doesn't legally require an operating agreement, but every LLC should have one. It defines ownership, profit sharing, and decision-making rules.
Alabama does not require LLCs to have an operating agreement, but skipping it is a mistake. The agreement is an internal document that spells out how your LLC runs. Without one you fall back on Alabama default LLC laws. Those may not match what you and your co-owners actually agreed.
Sections to Include in Your Operating Agreement
Pro Tip
Even single-member LLCs benefit from an operating agreement. Banks and investors often ask for one, and it strengthens the legal separation between you and your business.
Open a Business Bank Account for Your Alabama LLC
A separate business account keeps your personal and business money apart. That separation is what holds your liability protection up.
Open a bank account in the LLC name as soon as your formation is approved. This is not just good bookkeeping. If you mix personal and business money, a court can decide the LLC is not really a separate entity. That puts your personal assets back at risk. Most Alabama banks and credit unions offer business checking with low or no monthly fees.
What to Bring When Opening Your Account
- Your approved Certificate of Formation
- Your EIN confirmation letter from the IRS
- A valid photo ID for all members opening the account
- Your operating agreement (many banks request this)
- Your Name Reservation Certificate
Important
Mixing personal and business funds can weaken your LLC's liability protection. Courts call this "piercing the corporate veil," and it can make you personally liable for business debts.
Federal BOI Reporting
No. FinCEN exempted every company formed in the United States from beneficial ownership reporting in an interim final rule published 26 March 2025 and applied from 21 March 2025, then made that exemption permanent in a final rule published 11 August 2026 and effective 14 August 2026. Only entities formed under foreign law and registered to do business in a US state still report.
Top 3 LLC Formation Services
We've independently reviewed the top LLC formation services in Alabama. Here's how they compare.
| Feature | Northwest Registered Agent Best Overall | ZenBusiness Best for LLC Formation | Tailor Brands Best for Branding |
|---|---|---|---|
| Starting Price | $39 + state fees | $0 + state fees | $0 + state fees |
| Formation Speed | Same-day only on the $199 package | 7-10 days, 1 day on Pro | 1-14 business days |
| Support | Lifetime Corporate Guides | Phone, Chat, Email | Phone, Chat, Email |
| States Covered | 50 states | 50 states | 50 states |
| In Business Since | 1998 | 2015 | 2014 |
| Get Started → | Get Started → | Get Started → |
Frequently Asked Questions
What to Do Next
Once your Alabama LLC is approved, take these steps to set your business up for success.
Get an EIN
Apply for free in about 10 minutes at IRS.gov, required before opening a bank account or hiring anyone.
Open a Business Bank Account
Keep personal and business finances separate from day one. Bring your EIN, your Certificate of Formation and a government ID.
Create an Operating Agreement
Alabama does not require one, but it protects your liability shield and sets out how the LLC is run.
Check your county licence
Alabama business privilege licences come from the county Probate Judge, not the Secretary of State. You need one in every county where you do business.
Paying contractors
Alabama is in the IRS forwarding program, so an e-filed 1099-NEC can reach the state. Check the Alabama threshold before you skip a form.
Ready To File?
Start your Alabama LLC with Northwest Registered Agent. $39 + state fee includes registered agent, business address, domain, and more.
About the Author
Business Formation Researcher
Eliot leads StartupOwl's state data research. He maintains the site's fifty state records of LLC filing fees, annual costs, processing times, and small business grant programs, checking each figure against the state office that publishes it and logging the date it was verified. Based in New Jersey, he has spent his working life in and around small businesses, and he writes for the founder who wants the real number rather than the advertised one. Every figure under his byline traces to a named source, and when a state proves a number wrong, the correction is published, not buried.
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