Alabama LLC at a glance
An LLC in Alabama costs $225 to $228 in state fees to form, because the name reservation is compulsory and comes before the $200 Certificate of Formation. After that, most small Alabama LLCs pay no yearly state fee to the Secretary of State. The recurring obligation is the Business Privilege Tax, collected by the Alabama Department of Revenue.
| Item | Alabama rule |
|---|---|
| Formation document | Certificate of Formation, filed with the Secretary of State |
| Formation fee | $200 ($100 of it goes to the county of the registered office) |
| Name reservation | Required before filing: $25 by mail, $28 online |
| Where to file | Secretary of State online services, or by mail to the Business Entities Division in Montgomery |
| Effective date | The date the Secretary of State receives the filing |
| Annual report to the Secretary of State | None for LLCs (the $10 annual report fee applies to corporations) |
| Yearly state tax | Business Privilege Tax: no filing requirement for taxable year 2026 if the tax is $100 or less |
| Registered agent | Required, with an Alabama street address (no PO box) |
| Expedite | No separate expedite fee is listed; online fees combine the fastest service with a portal fee |
If you live in Alabama and trade there, an Alabama LLC avoids registering an out-of-state LLC later. If you live outside the US and have no Alabama customers, staff or premises, compare running costs first with our LLC state fee comparison tool.
How to start an LLC in Alabama
You start an Alabama LLC in two filings: the name reservation, then the Certificate of Formation with the reservation certificate attached. The Secretary of State's LLC page lists both steps. Here is the full sequence, including the tax and federal steps that follow.
- Check and reserve the name. Search the Business Entity Records first to reduce the chance of a rejection. The name must contain "Limited Liability Company", "L.L.C." or "LLC". Then file the name reservation request: $25 by mail or $28 online, where non-subscribers get the result at once.
- Appoint a registered agent. The Certificate of Formation asks for the agent's name and a street address in Alabama, with no PO boxes, plus the county. You can act yourself if you live in Alabama, or use a registered agent service.
- File the Certificate of Formation and pay $200. Use the domestic LLC Certificate of Formation, attach a copy of the Name Reservation Certificate, and confirm there is at least one member. By mail you send two typed copies; online you file through the state portal. The filing is effective on the date the office receives it. Our articles of organization guide explains the formation document in general terms.
- Sign an operating agreement. Alabama does not ask you to file it, but banks and payment providers often want to see one. See our LLC operating agreement guide.
- Get an EIN. The EIN is free from the IRS. Owners without an SSN or ITIN cannot use the online application and apply by fax, mail or phone, as the IRS EIN page explains. Our EIN application service handles that route.
- Deal with the initial Business Privilege Tax return. A new LLC files Form BPT-IN within two and a half months after it is organized, unless its tax works out at $100 or less for 2026, in which case the Department's instructions say there is no filing requirement.
- Register for other taxes and licenses you need. That can include sales tax and a local business license from the county or city.
- Put the yearly dates on your calendar. Our compliance deadline calendar tracks the privilege tax and federal filings.
Ready to form? Our filing team reserves the name, prepares and submits the Certificate of Formation, and keeps your documents in your portal.
Alabama LLC cost
The state fees to register an Alabama LLC come to $225 by mail or $228 online, plus the online portal fee. The Secretary of State fee schedule sets each amount.
| Fee | Amount | When |
|---|---|---|
| Name reservation | $25 by mail, $28 online | Before formation |
| Certificate of Formation | $200 | At formation |
| Certificate of Existence (optional) | $25 ($28 online) | When a bank or partner asks |
| Amendment | $100 | If you change the certificate |
| Change of registered agent or office | $100 | When you change agent |
| Articles of Dissolution | $100 | When you close |
First-year arithmetic: $25 + $200 = $225 by mail, or $28 + $200 = $228 online before the portal fee. The Secretary of State's 2021 schedule explains that online fees combine the statutory fee for the fastest service with a vendor portal fee. Ongoing, a small LLC whose privilege tax is $100 or less pays $0 to the state for 2026. A larger LLC pays privilege tax based on its net worth, explained below. Federal filings and any registered agent or address service are separate from state fees.
Alabama LLC annual report and Business Privilege Tax
Alabama LLCs do not file an annual report with the Secretary of State. The Department of Revenue's Business Privilege Tax page says the $10 Secretary of State annual report fee is added for corporations; LLCs deal only with the privilege tax.
Who files and when
- Initial return: Form BPT-IN is due two and a half months after the LLC is organized, according to the Department's initial return FAQ.
- Yearly return: LLCs, S corporations and disregarded entities file Form PPT. The due date FAQ says a limited liability entity's return is due two and a half months after the start of its taxable year, which is 15 March for a calendar year.
- Single-member LLCs: the 2026 Form PPT instructions say a single-member LLC must not use its owner's FEIN or Social Security number, and a disregarded LLC computes its own net worth unless its owner is subject to the privilege tax.
How much
The tax is based on net worth apportioned to Alabama, at $0.25 to $1.75 per $1,000 depending on federal taxable income, with a $15,000 maximum. The statutory minimum is $100, but the 2026 Form PPT and Form BPT-IN instructions both say that for taxable year 2026, taxpayers who would owe the $100 minimum have no filing requirement: "If $100 or less, STOP."
Penalties apply when a return is required and late: the greater of 10% of the tax or $50 for late filing, plus 1% of the unpaid tax for each month, up to 25%. Check the instructions each year, because the $100 relief is stated for taxable year 2026.
Our LLC annual report service covers state compliance filings and reminders.
Alabama registered agent
Every Alabama LLC needs a registered agent with a street address in Alabama; a PO box is not accepted. The agent receives legal papers and official mail and must be reachable at that address.
You may serve as your own agent if you have an Alabama street address. Founders outside Alabama, or those who prefer not to publish a home address, use a commercial agent. To change agent or registered office later you file a Change of Registered Agent or Registered Office by Entity, which costs $100 on the fee schedule. An agent can resign without a fee.
Alabama LLC registration and state taxes
Besides the privilege tax, the taxes an Alabama LLC meets depend on what it sells and how it is taxed. Income taxes follow the LLC's federal classification, so a licensed tax professional should confirm your position.
- Sales tax: sellers with a place of business in Alabama register with the Department of Revenue. Out-of-state sellers with Alabama sales above the $250,000 threshold collect a flat 8% under the Simplified Sellers Use Tax program. Our sales tax registration service can help.
- Local licenses: county and city business licenses are issued locally, often through the probate judge or license commissioner.
Forming an Alabama LLC as a non-resident
You do not need to live in Alabama or the US to form an Alabama LLC, but you do need an Alabama registered agent. The practical question is whether Alabama suits you. If your customers, staff or premises are in Alabama, form here. If you run an online business from abroad, many founders choose Wyoming or New Mexico; see Wyoming vs Delaware vs New Mexico and our best state for an LLC guide. An LLC formed elsewhere that does business in Alabama registers as a foreign entity for $150.
- Form 5472: a single-member LLC owned by a foreign person files Form 5472 with a pro forma Form 1120 every year, even with no income. It cannot be e-filed, so it goes by fax or mail. See our Form 5472 guide.
- BOI: US-formed LLCs no longer file beneficial ownership reports with FinCEN under the final rule published 14 August 2026.
- Address: the agent's address is for legal papers. Banks usually want a separate business address, which our US business address service provides.
Whether you owe US income tax depends on whether you have US trade or business income, which needs advice from a licensed tax professional. Our how to start an LLC guide covers the general process.
How to dissolve an LLC in Alabama
To dissolve an Alabama LLC you file Domestic LLC Articles of Dissolution with the Secretary of State and pay $100. The form asks for the LLC's name, entity ID, formation date, the reason for dissolution, the effective date and an authorized signature.
- Wind up the business: collect debts, pay creditors and distribute what remains to members.
- File any Business Privilege Tax, sales tax and federal returns still due, including a final Form 5472 if it applies.
- Send two typed copies of the Articles of Dissolution with the $100 fee to the Secretary of State, or file through the online portal as the Department of Revenue's dissolution FAQ describes.
That FAQ lists a Department of Revenue Certificate of Compliance as a step for foreign entities withdrawing from Alabama, not for domestic dissolutions. Our LLC dissolution service handles the state filing and the federal closing steps.
Sources
- Alabama Secretary of State: LLCs
- Alabama Secretary of State: Fee Schedule
- Alabama Secretary of State: 2021 Business Entities Fee Schedule
- Alabama Secretary of State: Domestic LLC Certificate of Formation
- Alabama Secretary of State: Name Reservation Request
- Alabama Secretary of State: Change of Registered Agent or Registered Office by Entity
- Alabama Secretary of State: Domestic LLC Articles of Dissolution
- Alabama Department of Revenue: Business Privilege Tax
- Alabama Department of Revenue: 2026 Form PPT instructions
- Alabama Department of Revenue: 2026 Form BPT-IN instructions
- Alabama Department of Revenue: When is the Business Privilege Tax return due?
- Alabama Department of Revenue: What is an initial return?
- Alabama Department of Revenue: How do I withdraw or dissolve my business?
- Alabama Department of Revenue: Simplified Sellers Use Tax
- IRS: Get an employer identification number
- IRS: Instructions for Form 5472
- FinCEN: Beneficial Ownership Information Reporting
Fees, deadlines and rules on this page were last checked on 27 September 2026.