How Much Does an LLC Cost in Alabama

It costs $200 to form an LLC in Alabama. But these additional expenses could increase the total to over $3,000.

There's no getting around the fact that you will have to spend money when forming a business. The question is, how much for an LLC in Alabama?

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Remove the guesswork by reading through this comprehensive list of Alabama LLC fees.

Alabama LLC Name Reservation Fee

Cost: $25 (mail) | $28 (online)^[1]

You must pay the business name reservation fee before forming an LLC in Alabama. But before you pay, check the name's availability first. You can access the Secretary of State's online database to see all active business names.

Don't forget to review Alabama's detailed list of naming regulations to prevent your Articles of Organization from getting rejected. For example, an "LLC" or a similar abbreviation must be at the end of your business name.

After paying, you'll receive a Name Reservation Certificate, which you need to attach to your LLC formation application.

Alabama Domestic LLC Formation Filing Fee

Cost: $200 (mail) | $208 (online)^[2]

To form an LLC in Alabama, you must submit the Certificate of Organization to the Secretary of State together with the filing fee. Once the documents are approved, your LLC will be recognized as a separate legal entity.

The Certificate of Formation contains important information for the state to identify your company uniquely. This includes the following details:

• Business name
  
• Registered agent's name, address, and county
  
• Business type (series LLC, professional LLC, or non-profit)
  
• Effectivity date (must be within 90 days after approval)

Don't forget to attach a copy of your name reservation certificate, which has a separate $25 fee.

Alabama Foreign LLC Formation Filing Fee

Cost: $150 (mail) | $156 (online)^[2]

If you already have an LLC in a different state and want to expand your business to Alabama, you need to register it as a foreign LLC.

Foreign LLCs in Alabama must submit an Application for Registration to the Secretary of State with the filing fee. Don't forget to attach a copy of your name reservation certificate.

However, if your LLC's original name is unavailable in Alabama, you must register a trade name. This will be your LLC's official business name only in Alabama.

Alabama LLC Annual Business Privilege Tax

Cost: $0 to $15,000^[4]

Each year, LLCs in Alabama must pay the business privilege tax as a payment for doing business in the state. However, if your business privilege tax is calculated as $100 or less, you are exempt from paying this tax and aren't required to file a Business Privilege Tax Return.

The rates range from $0.25 to $1.75 for each $1,000 of the LLC's net worth within the state. The maximum privilege tax for most businesses is $15,000.^[4]

You must pay the business privilege tax on time to avoid penalties. The state could close your LLC if you receive the Business Privilege Tax Delinquent Notice and still don't pay.

Alabama LLC Business Permits & License Fees

Cost: Up to $500+

Most businesses in Alabama are required to get a Business Privilege License. It's issued at state and county levels, so you'll likely need a license for each county where you do business.^[6]

The business privilege license fee varies per county, with an additional $1 issuance fee per license. Some counties may charge additional fees for issuance or mailing.^[7]

If you start doing business after April 1, you might be qualified for a half-year license. Don't forget to renew it in October because there's a non-waivable 15% penalty, plus interest for late renewals.^[7]

You might also need additional permits and licenses, depending on the purpose of your business.

Optional Fees for LLCs in Alabama

While the Alabama LLC fees below are mostly optional, some may be unavoidable depending on your business needs.

For example, obtaining a Certificate of Compliance is often necessary when opening a business bank account.

See what else your LLC might need below.

Registered Agent Service Fee

Annual Cost: $0, or $100-$300/yr

In Alabama, you must have a registered agent to receive business and legal documents for your LLC. This includes government notices, tax forms, and annual reporting forms.

You can technically be your LLC's registered agent—as long as you're at least 18 and have a physical street address in Alabama. You must also be available to receive documents during business hours.

However, your address will be public record. So many LLCs like to hire a registered agent service to keep their personal details private. These services usually charge $100-$300 per year to be your registered agent.

Operating Agreement Fee

Cost: $0, or up to $500+

LLCs in Alabama are not required to have an operating agreement. However, it's recommended because it defines important rules and regulations that all members must follow.

An LLC operating agreement contains the following:

• The roles and responsibilities of each member
  
• How new or departing members will be treated
  
• How business profits and losses will be divided

Ideally, you should already have a signed Operating Agreement before forming an LLC in Alabama. But if your LLC is already formed, you can always draft it yourself after.

Alternatively, an LLC attorney might charge you a $500 flat fee for a standard operating agreement. If you have more complex details, the cost could be higher.

Employer Identification Number Fee

Cost: $0, or $50 to $99

Any LLC with more than one member or with employees must have an EIN, regardless of how it's taxed. This is a unique nine-digit number assigned by the Internal Revenue Service (IRS) to identify a business entity for tax-related purposes.

You can just apply for an EIN for free on the IRS website. But if you'd like an LLC service to process it for you, you can do so for a small fee. Here are some providers that do this and their pricing:

• Northwest Registered Agent: $50
  
• Bizee: $70
  
• ZenBusiness: $99

Single-member LLCs in Alabama don't require an EIN, but it's almost essential in practice. For instance, you'll need one if you hire employees or want to open a business bank account.

BOI Report

One-Time Cost: $0, or up to $149

The Beneficial Ownership Information (BOI) is a one-time report that must be submitted to the Financial Crimes Enforcement Network (FinCEN) within 90 calendar days of your LLC's formation.^[8]

It includes information about the LLC's beneficial owners, including name, birth date, and address.

FinCEN doesn't charge a fee to submit your BOI report. But you can pay an LLC service to process it for you and save yourself the hassle:

• Northwest Registered Agent: $25
  
• LegalZoom: $149
  
• ZenBusiness: $149

You're considered a beneficial owner if you own 25% or more of the ownership interests in your LLC. Or if you exercise substantial control over the LLC.

Trade Name Registration Fee

Cost: $30^[9]

A trade name (also known as "Doing Business As" or DBA) allows your LLC to operate under a name different from what's officially registered with the state.

For example, you need a DBA if you want to use your business name without an "LLC" at the end for branding purposes.

A trade name in Alabama is valid for 5 years from the date of registration. Then, you will need to renew it for $30.^[10]

Statement of Correction Fee

Cost: $100^[11]

After your Alabama LLC application is approved, get a copy of your Certificate of Organization and review all the details carefully.

If you see errors, like a misspelled business name or wrong address, correct them as soon as possible by filing a Statement of Correction.

Certificate of Amendment Fee

Cost: $100 to $104^[11]

Your Alabama LLC's Certificate of Organization contains specific details about your business. Should these details change, you must submit a Certificate of Amendment to the Secretary of State.

You should file a Certificate of Amendment if you:

• Add, remove, or change an LLC member or manager
  
• Update your LLC's business address
  
• Modify your LLC's stated business activities

There's a separate form for changes in registered agent details and a $100 processing fee.^[11] However, registered agent services typically shoulder this for you.

Certified Document Copy Fee

Cost: $10 per document + $2 per page^[11]

Certified copies of documents verify that your LLC is legitimate and that its details are accurate.

You might need these for circumstances like opening a business bank account or expanding your LLC in another state.

Certificate of Compliance Fee

Cost: $14^[12]

A Certificate of Compliance verifies that your LLC has paid all taxes and is compliant with state tax rules.

Also called a "Certificate of Good Standing," it's often required in business contracts, licenses, or government program applications.

Certificate of Existence Fee

Cost: $25 - $28^[11]

A Certificate of Existence for LLCs in Alabama verifies that a business is legally registered with the state and complies with all state requirements.

Also known as a "Certificate of Status," it confirms that the LLC exists and is authorized to do business in Alabama.

Business Website and Domain Fees

Annual Fee: $10 to $20

A website domain and social media presence provide dedicated online spaces for your business. It's essential for marketing, customer engagement, and brand visibility in today's digital world.

Even if you aren't planning to build a business website now, you could still buy the domain name. This will prevent others from using your LLC's name as a web address.

Business Insurance Premiums

Cost: Varies

In Alabama, businesses with 5 or more employees are required to have workers' compensation insurance.

Alabama's Department of Labor has a state-run worker's compensation insurance program. You can also get it through private insurers or self-insure if you meet certain requirements.

Other common types of business insurance for LLCs include general liability insurance, professional liability insurance, and commercial property insurance.

Bottom Line

Alabama's $200 LLC filing fee is just the beginning of expenses when forming an LLC in the Heart of Dixie.

The total cost will increase depending on the additional services, documents, and licenses your LLC needs.

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Ultimately, it's never a bad idea to set aside an extra budget for unexpected fees.

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