⬤ Alabama · LLC Formation
How to Form an LLC in Alabama?
Form your Alabama LLC the right way – CountSure handles the mandatory name reservation, the $200 Certificate of Formation, and the Business Privilege Tax setup. Streamlined since Alabama retired its annual report in 2024.
Requirements, costs & steps for an Alabama LLC
Setting up a limited liability company in Alabama is refreshingly streamlined since the state retired its Secretary of State annual report in late 2024. You still get the core benefits an LLC is known for – personal asset protection and pass-through taxation with one Alabama quirk to plan for: a mandatory name reservation before you can file. This guide lays out the real costs, the filing sequence, and the one recurring obligation that trips owners up. Prefer to delegate it? Our Alabama LLC formation service takes care of the whole filing.
The short answer: To form an Alabama LLC you first reserve your business name (mandatory, about $28 online), then file a Certificate of Formation with the Secretary of State for a $200 fee, and appoint a registered agent with a physical Alabama address. There is no annual report to the Secretary of State anymore. Your one recurring state obligation is the Business Privilege Tax (minimum $50, and $0 if your calculated tax is $100 or less).
You can verify the fees from official website of Alabama – Click here to verify
⬤ Key takeaways
What you need to know?
- Filing fee: $200 for the Certificate of Formation, filed with the Alabama Secretary of State.
- Name reservation: Mandatory before filing - about $28 online / $25 by mail. Alabama is one of the few states that requires this.200 for the Certificate of Formation, filed with the Alabama Secretary of State.
- No SOS annual report: Eliminated October 1, 2024 (Act 2024-213). Don’t waste time hunting for it.
- Business Privilege Tax: Filed with the Department of Revenue; $50 minimum, but $0 owed and no filing required if your tax is $100 or less
- Registered agent: Required - must have a physical Alabama street address.
Alabama LLC at a glance
The essentials for forming and maintaining an Alabama LLC.
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Requirement
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Detail (2026)
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|---|---|
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Formation document
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Certificate of Formation
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Filing agency
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Alabama Secretary of State
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State filing fee
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$200
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Name reservation
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Mandatory; ~$28 online / $25 mail
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Typical processing time
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~1 business day online; longer by mail
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Registered agent
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Required; physical Alabama address
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SOS annual report
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None (eliminated Oct 1, 2024)
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Initial Business Privilege Tax
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Form BPT-IN, within 2.5 months of formation
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Annual Business Privilege Tax
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Form PPT; $50 min ($0 if tax ≤ $100)
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Tax agency
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Alabama Department of Revenue (ALDOR)
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⬤ Step by step
How to form an Alabama LLC, step by step
Seven steps from name reservation to your first Business Privilege Tax filing.
Reserve your LLC name (required first step)
Unlike most states, Alabama makes you obtain a Certificate of Name Reservation before you can file. Your name must include “LLC,” “L.L.C.,” or “Limited Liability Company,” and be distinguishable from existing Alabama entities. Reserve it online for roughly $28 it’s usually available within a day.
Appoint a registered agent
Choose an individual Alabama resident or a registered agent service with a physical in-state address available during business hours. CountSure can serve as your registered agent.
File your Certificate of Formation
Submit it (with your Certificate of Name Reservation) to the Secretary of State and pay the $200 fee. Online filing is fastest.
Write an operating agreement
Not filed with the state, but strongly recommended – it sets out ownership, profit splits, and management, and helps preserve your liability shield.
Get your EIN from the IRS
Free, and needed for a business bank account, hiring, and your Business Privilege Tax filing.
File the Initial Business Privilege Tax Return (Form BPT-IN)
Due within 2.5 months of formation, filed with the Department of Revenue.
Handle local business licenses
Most Alabama businesses need a county and/or municipal business license; some industries need additional permits.
⬤ Naming & ownership
Naming & member requirements
Two things determine whether your filing clears on the first try: a compliant, reserved name and a clear management structure. Here’s what Alabama requires.
- Required ending: “Limited Liability Company,” “L.L.C.,” or “LLC.”
- Mandatory reservation: You must hold a Certificate of Name Reservation before filing - an Alabama-specific rule.
- Restricted words: Terms implying banking, insurance, or similar regulated activity generally need approval.
- Minimum members: One - Alabama allows single-member LLCs. No residency or age requirement.
- Management: Member-managed or manager-managed; you indicate this in your Certificate of Formation.
Ongoing Alabama LLC compliance & taxes
No Secretary of State annual report
As of October 1, 2024, Alabama eliminated the Secretary of State annual report for LLCs and corporations (Act 2024-213). There is no longer a separate annual report or its old fee – a real compliance simplification versus most states.
Business Privilege Tax (your main recurring filing)
Alabama’s recurring obligation runs through the Department of Revenue, not the Secretary of State. You file an initial return (Form BPT-IN) within 2.5 months of formation, then the annual return (Form PPT). The minimum tax is $50, calculated on Alabama net worth. Importantly, if your calculated tax is $100 or less, you owe $0 and don’t have to file that year which covers many new single-member LLCs.
Deadlines
The annual Business Privilege Tax return is generally due on the same date as your federal return – March 15 for multi-member LLCs (partnership) and April 15 for single-member LLCs. Missing it triggers penalties and interest.
EIN and state tax accounts
Get a free EIN from the IRS. Depending on your activity (sales tax, employees), you may need to register for specific accounts with ALDOR; Alabama does not issue a general state tax ID for the privilege tax itself.
Alabama LLC cost breakdown
What you’ll actually pay in year one and beyond.
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Requirement
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Cost (2026) · paid to
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|---|---|
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Name reservation (mandatory)
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~$28 online / $25 mail · Secretary of State
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Certificate of Formation
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$200 · Secretary of State (one-time)
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|
Initial Business Privilege Tax
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$50 min ($0 if ≤ $100) · Dept. of Revenue, within 2.5 mo.
|
|
Annual Business Privilege Tax
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$50 min ($0 if ≤ $100) · Dept. of Revenue, yearly
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|
SOS annual report
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$0 · eliminated Oct 2024
|
|
Registered agent (optional)
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Varies · CountSure / third party
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EIN
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$0 · IRS (free)
|
Insight from our team
Our guidance reflects hands-on filing experience across all 50 states and the District of Columbia, reviewed against current Secretary of State and Department of Revenue requirements.
“Alabama is one of the easier states to stay compliant in now that the annual report is gone but the Business Privilege Tax still catches people, because they assume ‘no annual report’ means ‘nothing to file.’ The good news is the $100-or-less exemption means a lot of brand-new LLCs owe nothing in year one. We confirm each client’s net-worth position before the initial BPT deadline so nobody files or pays when they don’t have to.”
Parth Shah
CountSure
⬤ Keep exploring
Related guides & services
- LLC vs. Corporation: which is right for you?
- All state formation guides
Frequently asked questions
The Certificate of Formation is $200 , plus a mandatory name reservation of about $28 online. So realistic startup state cost is roughly $228, before optional services.
No. Alabama eliminated the Secretary of State annual report effective October 1, 2024. Your recurring obligation is the Business Privilege Tax filed with the Department of Revenue.
Yes. Alabama is unusual in requiring a Certificate of Name Reservation before you can file your Certificate of Formation.
The minimum is $50, based on Alabama net worth. If your calculated tax is $100 or less, you owe $0 and don’t need to file that year.
Online filings are often approved within about a business day mail filings take noticeably longer.
Yes. You must have a registered agent with a physical Alabama address. You can serve as your own, but many owners use a service for privacy and reliability.
Get Started
Start your Alabama LLC with CountSure
From the mandatory name reservation to your Certificate of Formation, EIN, and Business Privilege Tax setup, CountSure handles your Alabama LLC end to end.
- Free 30-minute consultation with a CPA
- Fixed-fee, fully transparent pricing
- 100% remote - no travel or visa required
