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.
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Here are the following costs to consider:
- Name Reservation Fee: $25 to $28
- Domestic LLC Formation Fee: $200 to $208
- Foreign LLC Formation Fee: $150 to $156
- Annual Business Privilege Tax: $0 to $15,000
- Business Permits and License Fees: Up to $500+
- Registered Agent Services: $0, or $100-$300/yr
- Operating Agreement: $0, or up to $500+
- Employer Identification Number: $0, or $50 to $99
- BOI Report: $0, or $25 to $149
- Other Optional Fees: Up to $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?
Set Up Your LLC - $0 + State Fees
- Free business plan included (no credit card required)
- Lifetime compliance alerts
- Comprehensive name check
- Lifetime customer support via email and phone
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 charges a $30 fee for dishonored checks or credit/debit cards that don't work. The card will also be removed from the state's index.[1]
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.
It could take 2 to 3 weeks for the Secretary of State to process your LLC application. However, this is not a hard and fast rule. There are several ways to form your LLC much quicker.
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.
Yes, Alabama's Secretary of State offers expedited services for an additional $100. Your documents will be processed within 3 business days after the date of receipt from the County Probate Office.[3]
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.
Paying the Alabama Business Privilege Tax does not automatically grant you a Business Privilege License. These are two separate requirements for businesses operating in Alabama.
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.
| Alabama LLC Optional Fees | Cost |
|---|---|
| Registered Agent Services | $0 - $300+ |
| Operating Agreement | $0 - $500+ |
| Employer Identification Number | $0 - $99 |
| BOI Report | $0 - $149 |
| Trade Name Registration | $30 |
| Statement of Correction | $100 |
| Certificate of Amendment | $100 - $104 |
| Certified Copy of Documents | $10 + $2 per page |
| Certificate of Existence | $25 - $28 |
| Certificate of Compliance | $14 |
| Business Website and Domain | $20 - $30 |
| Business Insurance Premiums | Varies |
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.
You can write your own with free online operating agreement templates. If you want a professional to create it for you, LLC services usually offer this as a part of their packages for much less than attorney costs.
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.
Yes. Separating your LLC's finances from personal assets is a requirement of liability shielding. Use a separate bank account to accept payments and pay business expenses to prevent piercing the corporate veil .
BOI Report
Cost: $0, or $25 to $149
The Beneficial Ownership Information (BOI) is a required report that's submitted to the Financial Crimes Enforcement Network (FinCEN). It includes information about the LLC's beneficial owners, including name, birth date, and address.
FinCEN doesn't charge any fee for BOI report submissions. 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 are 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.[8]
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.
A Statement of Correction is for fixing mistakes in initial filings. Meanwhile, a Certificate of Amendment is for updating key details as the LLC evolves.
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.
If your LLC in Alabama is in bad standing, you first must pay any outstanding penalties and fees, including the business privilege tax. Afterward, file a Certificate of Reinstatement with the $100 filing fee to restore your LLC's good standing.[13]
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.
A Certificate of Compliance shows your LLC's tax compliance with the Department of Revenue. Meanwhile, a Certificate of Existence focuses on its legal formation and status with the Secretary of State.
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.
Domain squatters often monitor newly registered LLC names. They purchase corresponding website domains and then resell them at significantly higher prices.
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.
Set Up Your LLC - $0 + State Fees
- Free business plan included (no credit card required)
- Lifetime compliance alerts
- Comprehensive name check
- Lifetime customer support via email and phone
Business Formation Service - $39 + State Fees
- Form Your LLC, Corporation, or Nonprofit Today
- A Fully-Formed Business
- Registered Agent Service
- Business Address
- Mail Forwarding
- Privacy by Default
Economy Package at $149 + State Filing Fees
- Name check service
- Business consultation
- Digital welcome packet
- Customizable WIX website
Starter - $0 + State Filing Fees
- Includes 1 optional free year of Worry-Free Compliance that renews at $199/year
- Standard filing speed
- 100% accuracy guaranteed
- Other services are available with additional costs
Ultimately, it's never a bad idea to set aside an extra budget for unexpected fees.
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References
- ^ Alabama Secretary of State. Name Reservation Request Form for Domestic Entities, Retrieved 05/21/2024
- ^ Alabama Secretary of State. Organizing Your Domestic Limited Liability Company or Registering Your Foreign Limited Liability Company, Retrieved 05/21/2024
- ^ Alabama Secretary of State. Domestic Limited Liability Company Certificate of Formation, Retrieved 05/21/2024
- ^ Alabama Department of Revenue. Business Privilege Tax, Retrieved 05/21/2024
- ^ IRS. Self-Employment Tax (Social Security and Medicare Taxes, Retrieved 05/21/2024
- ^ Alabama Department of Revenue. Business Privilege License, Retrieved 05/21/2024
- ^ Alabama Department of Revenue. Operating a Business in Alabama: Business Privilege License, Retrieved 05/21/2024
- ^ Financial Crimes Enforcement Network. Beneficial Ownership Information, Retrieved 10/02/2024
- ^ Alabama Secretary of State. Instructions for Application to Register Trademark, Service Mark, Or Trade Name in Alabama, Retrieved 05/21/2024
- ^ Alabama Secretary of State. Instructions for Application to Renew Trademark, Service Mark, Or Trade Name in Alabama, Retrieved 05/21/2024
- ^ Alabama Secretary of State. Fee Schedule, Retrived 05/21/2024
- ^ Alabama Department of Revenue. Certificate of Compliance, Retrieved 05/21/2024
- ^ Alabama Secretary of State. Domestic Limited Liability Company Certificate of Reinstatement, Retrieved 05/21/2024
Nicole King is a research analyst at CreditDonkey, a business formation services comparison and reviews website. Write to Nicole King at nicole.king@creditdonkey.com. Follow us on Twitter and Facebook for our latest posts.
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