Business Formation / LLC Alabama

How Much Does It Cost to Start an LLC in Alabama?

Starting an LLC in Alabama involves both one-time and ongoing costs. Here’s a clear look at the fees and requirements you can expect when forming your business.

📝 Initial Formation Costs

• Certificate of Formation – $200
  This is the official filing submitted to the Alabama Secretary of State to create your LLC.

• Name Reservation Fee – $25 (mail) or $28 (online)
  Alabama uniquely requires all LLC names to be reserved before filing. This locks in your business name for up to 1 year.

• Registered Agent Service – $0 to $300/year
  You can act as your own registered agent at no cost. If you prefer privacy or convenience, third-party services are available.

• Operating Agreement – $0 to $500+
  This internal document outlines how your LLC operates. You can draft it yourself or hire legal help.

• EIN (Employer Identification Number) – FREE
  Required for taxes and business banking. Apply directly through the IRS website.

🔁 Ongoing Costs

• Business Privilege Tax – Minimum $100/year
  All Alabama LLCs must file this annually. The exact amount depends on your company’s income/net worth.

• Annual Report – Included with Business Privilege Tax
  Due every year by April 15. This maintains your LLC’s good standing with the state.

• Business License (if applicable) – Varies by city/county
  Some local governments may require a business license depending on where and how you operate.

🛑 What additional costs am I responsible for?

In addition to our fee, you will be responsible for the costs of some or all of the items below if applicable.

1. Licenses 
   
2. Filing Fees
3. Reports
4. Name Reservations
5. Articles of Organization