How to Start an LLC in Alabama
Step-by-step guide to form LLC in Alabama — $200 formation + $28 name reservation, annual report, registered agent, and Business Privilege Tax explained.
Why Form an LLC in Alabama?
Alabama is affordable, with low cost of living, growing Huntsville tech, Birmingham startups, and Mobile e-commerce. LLC protects personal assets from lawsuits and gives credibility with banks. Alabama LLC filing is via Secretary of State, but unique — you must reserve name first before filing Certificate of Formation.
More state guides at LLCGuidance.com.
How to Open an LLC in Alabama in 5 Steps
Reserve LLC Name ($28)
Alabama requires name reservation BEFORE formation. File Name Reservation Request with Alabama Secretary of State ($28 online, valid 1 year). Must include “LLC”, “L.L.C.” etc. Must be distinguishable. Check naming guide. You’ll get reservation certificate — needed for next step.
Appoint Registered Agent
Alabama requires agent with physical AL address (no PO Box), available 9-5. Can be you, but address public. Professional agent keeps privacy + handles annual Privilege Tax reminders. All our picks include 1 year free agent with AL address.
File Certificate of Formation ($200)
File Certificate of Formation (Domestic LLC) with Alabama SOS — $200 + attach name reservation certificate. Needs: LLC name, reserved name certificate, registered agent name/address, organizer, effective date. Approval 3-7 days online, 2-3 weeks mail.
Get EIN + Create Operating Agreement
Free EIN from IRS.gov (10 min). Operating Agreement not required by AL but banks require it. Template included with Bizee, LegalZoom. Defines ownership, profit split — critical for multi-member LLCs.
File Business Privilege Tax + Open Bank Account
After formation, file Initial Business Privilege Tax Return + Annual Report with Alabama Dept of Revenue — minimum $100/year (due 2.5 months after fiscal year end). Then open Mercury/Relay/Novo with EIN + Certificate + OA. Keeps veil intact. Also file BOI report with FinCEN.
Alabama LLC Costs
Best LLC Services for Alabama
Why for AL: $0 + state fees covers $28 reservation + $200 filing + handles name reservation certificate automatically. 1 year free registered agent (AL address). Handles Privilege Tax reminders ($100 min). Cheapest with privacy.
- $0 + $228 state fees ($28+$200)
- Handles name reservation (required in AL)
- 1 year free registered agent (AL address)
- Privilege Tax + Annual reminders
Why for AL: Handles name reservation same-day + fast filing, EIN in 1-2 days, plus bank + website. Good for Huntsville/Birmingham founders who need to invoice fast.
- Same-day name reservation + filing prep
- EIN fast-track 1-2 days
- Bank account + website starter
- Privilege Tax reminders
Why for AL: If forming with partners or need attorney review. Operating agreement attorney-drafted, helps with Business Privilege Tax filing guidance.
- Attorney-drafted OA
- 30-day attorney consult
- Privilege Tax guidance
- Most recognized brand
Why for AL: If outside US but want Alabama LLC (low cost). Doola handles name reservation, EIN without SSN, Privilege Tax, BOI filing, bookkeeping.
- Name reservation included
- EIN without SSN/ITIN
- Privilege Tax + BOI filing
- Bookkeeping + taxes
Alabama-Specific Requirements
1. Name Reservation Required First
Unlike most states, Alabama requires you to reserve name ($28) before you can file Certificate of Formation. Reservation valid 1 year. Must attach reservation certificate to formation filing. Bizee, Doola handle this automatically.
2. Business Privilege Tax $100 Minimum
Alabama LLCs file Initial Business Privilege Tax Return with Dept of Revenue within 2.5 months of formation, then annually. Minimum $100, max $15k, based on net worth. Even no revenue = $100 minimum. See LLC taxes guide.
3. No Annual Report to SOS, but Privilege Tax to DOR
Alabama SOS does not require annual report, but Dept of Revenue requires Business Privilege Tax + Annual Report filing yearly. Miss = penalty.
FAQs — Alabama LLC
Final Verdict — Alabama LLC
Reserve name for $28, file Certificate for $200, file Privilege Tax minimum $100 via Dept of Revenue. Total $328 first year. No SOS annual report, but $100 min tax yearly.
Use Bizee for cheapest (handles reservation), Business Rocket for fast, LegalZoom for attorney review, Doola for non-US. All handle AL reservation certificate.