How Much Does an LLC Cost in Alabama (2026)
Forming an LLC in Alabama costs $225 in required state fees. That covers the $200 Certificate of Formation and the $25 Certificate of Name Reservation you must file first.
The reservation isn't optional paperwork. The state won't accept your formation documents until it's on file. You also don't need to budget for a Secretary of State yearly report anymore. Alabama repealed it in 2024.
Here's the full breakdown of what to expect. You'll see one-time filing fees, yearly costs and optional extras worth knowing before you budget.
Quick Summary
- Alabama's biggest recent update is the end of the Secretary of State yearly report. So don't budget for a fee that no longer exists.
- Most small LLCs owe nothing on the state's Business Privilege Tax. That's thanks to a full exemption most owners never learn about.
- The costliest mistake is skipping name reservation, since Alabama requires it before accepting your formation papers at all.
| Cost Item | Amount | Frequency | Required? |
|---|---|---|---|
| Certificate of Formation | $200 | One-time | Mandatory |
| Certificate of Name Reservation | $25 | One-time (required first) | Mandatory |
| Foreign LLC Application for Registration | $150 | One-time | Only for out-of-state LLCs |
| Initial Business Privilege Tax Return (Form BPT-IN) | $0 for most LLCs | One-time | Only above $100 calculated tax |
| Secretary of State Annual Report | Eliminated (Oct. 1, 2024) | N/A | Not required |
| Business Privilege Tax (Form PPT) | $0 for most LLCs | Every year | Only above $100 calculated tax |
| Registered agent service | $0 (self) or $100–$300 | Every year | Optional |
| Certificate of Existence (Good Standing) | $25 | As needed | Optional |
| Trade Name (DBA) registration | $30 (renews every 5 years) | One-time + renewal | Optional |
| Operating agreement | $0 (template) or attorney-drafted | One-time | Optional |
| EIN from the IRS | $0 (free at IRS.gov) | One-time | Recommended |
One-Time Formation Costs in Alabama
These are the fees you pay once, to get the LLC on the books. It starts with the filing that actually creates the company.
1. Certificate of Formation ($200 - Mandatory)
An LLC in Alabama costs $200 for the Certificate of Formation, filed with the Alabama Secretary of State [1]. Some other states call this document Articles of Organization.
Alabama's version does the same job under a different name. Filing steps themselves are covered in our guide on how to start an LLC in Alabama.
2. Certificate of Name Reservation ($25 - Mandatory)
Before the Secretary of State will accept your Certificate of Formation, you need a Certificate of Name Reservation. This step is optional in most states.
In Alabama, it's a required step. The fee is $25, and it locks in your business name while you finish the rest of the papers.
3. Initial Business Privilege Tax Return, Form BPT-IN (One-time - $0 for Most LLCs)
Alabama's Initial Business Privilege Tax Return, Form BPT-IN, comes due within two and a half months of formation. No extension is available on it [2].
Most new LLCs never send it in at all. LLCs with $100 or less in tax owed are exempt from paying and from filing. Most new small LLCs land under that line.
4. Foreign LLC Application for Registration ($150 - Only for Out-of-State LLCs)
You may already have an LLC formed in another state. If you want to do business in Alabama too, you file a Foreign LLC Application for Registration. You skip the Certificate of Formation.
The fee is $150. The same name-reservation rule applies as for domestic LLCs, and the form still goes to the Business Entities Division.
Ongoing Costs to Maintain Active Status
Here's what an Alabama LLC owes after formation. That ranges from the filing the state dropped to the ones still on the books. For LLC costs in all 50 states, see our full national guide.
1. Secretary of State Annual Report (Eliminated - Not Required)
Alabama LLCs no longer file a yearly report with the Secretary of State. House Bill 230 removed that requirement statewide, effective October 1, 2024 [3].
Some older guides still list a small yearly filing fee for Alabama. Treat any figure like that as outdated. That filing no longer exists in any form.
2. Business Privilege Tax, Form PPT (Every Year - $0 for Most LLCs)
The yearly Business Privilege Tax return, Form PPT, has one due date each year. It matches the LLC's federal income tax return.
The same $100-or-less exemption that covers the initial return applies every year after. So most small LLCs neither owe the tax nor file the return. Growing LLCs above that threshold do owe it, based on Alabama net worth.
3. State Income Tax on LLC Profits (Every Year - Mandatory)
If your LLC is taxed as a pass-through entity, its profit flows to your personal Alabama tax return. That return follows the state's tiered personal income tax brackets [4].
Alabama taxes that income in three brackets:
- 2% on the first $500 of taxable income
- 4% on the next $2,500 (income from $501 to $3,000)
- 5% on anything above $3,000, the top rate
4. Registered Agent Service ($100–$300 Annually - Optional)
Your registered agent accepts legal notices and state correspondence on the LLC's behalf. You can serve as your own agent for $0, or hire a service instead. The best registered agent services in Alabama often run $100 to $300 a year for that help.
5. County or Municipal Business License (Every Year - Varies by Location)
Beyond the state-level filings, most Alabama LLCs also need a business license from the county where they operate. It's issued through the county probate office and run by the Alabama Department of Revenue [5].
The Secretary of State plays no part in setting these rates. The fee depends on your county and business type rather than one statewide number.
Optional Costs Worth Knowing About
1. Certificate of Existence, or Good Standing ($25 - Optional)
A Certificate of Existence confirms to banks, lenders and other states that your LLC is current with Alabama filings. It costs $25 [6].
Ask for one before you open a business bank account or register as a foreign LLC elsewhere. Both often require it.
2. Certified Copies of Filed Documents ($10 Plus $2 Per Page - Optional)
A certified copy of your Certificate of Formation or other filed documents costs $10 for the certification. Add $2 per page copied.
Lenders and title companies sometimes ask for a certified copy specifically. They want more than the plain PDF you already have on file.
3. Trade Name (DBA) Registration ($30 - Optional)
Your LLC might do business under a name other than the one on its Certificate of Formation. That's a trade name. You register it (Form LAT-4) with the Secretary of State, a different office.
The fee is $30, and the form must be notarized with three samples of how the name is used [7].
4. Trade Name Renewal (Every 5 Years - Optional)
A registered trade name stays valid for five years. Renewing it costs the same $30 fee as the original filing. If the registration lapses, the name drops off the state's records and another business can register it.
Mark the renewal date somewhere you'll actually see it. The registration renews in successive five-year terms for the same fee.
5. Operating Agreement ($0 to Attorney-Drafted - Optional)
Alabama doesn't require an operating agreement. But skipping one leaves your LLC governed fully by default state law instead of your own terms.
The Certificate of Formation is what legally creates your LLC. The operating agreement just spells out how you run it.
Free templates cover the basics for a single-member LLC. Multi-member LLCs with uneven ownership or tricky profit splits are usually better off with an LLC operating agreement. Have it drafted or reviewed by an attorney.
6. Professional Licensing (Varies - Only for Licensed Professions)
Some professions need a separate state license from their own licensing board before they can legally operate. That's on top of the LLC filing itself.
Each board sets its own fees and renewal schedule apart from the Secretary of State. No single statewide figure applies, so check with your specific board before you budget for this one.
7. EIN From the IRS ($0 - Recommended)
Your Employer Identification Number is free at IRS.gov and takes about five minutes online. It comes from the IRS, independent of anything you file with the state. Banks ask for it when you open a business account, and hiring employees requires it.
Formation services often charge $50 to $100 to get the EIN on your behalf. You can skip that expense fully by applying yourself.
It's the one item on this list that never has to cost you a dime. That's true no matter which formation service you use.
FAQs
Is the Annual Report Still Required for Alabama LLCs?
No, the Secretary of State annual report was eliminated for all Alabama LLCs, and for corporations too, effective October 1, 2024. Any guide that still lists that filing as a yearly requirement is describing a step that no longer exists.
How Much Does a Foreign LLC Cost in Alabama?
A foreign LLC registering to do business in Alabama pays $150 for the Application for Registration, plus the same $25 name-reservation prerequisite a domestic LLC pays first.
Do I Have to Pay Alabama's Business Privilege Tax Every Year?
No, Alabama's Business Privilege Tax doesn't apply when your calculated tax comes to $100 or less. Below that line you skip both the payment and the return itself, which covers most small LLCs.
What Documents Do I Need to Register an LLC in Alabama?
You register two documents to form an Alabama LLC: a Certificate of Name Reservation first, then the Certificate of Formation, both filed with the Secretary of State's Business Entities Division.
References:
- https://www.sos.alabama.gov/business-entities/llcs
- https://revenue.alabama.gov/individual-corporate/alabama-business-privilege-tax-and-corporate-share-tax/
- https://alison.legislature.state.al.us/files/pdf/SearchableInstruments/2024RS/HB230-eng.pdf
- https://revenue.alabama.gov/individual-corporate/individual-income-tax/
- https://revenue.alabama.gov/business-license/
- https://www.sos.alabama.gov/sites/default/files/form-files/FeeSchedule.pdf
- https://www.sos.alabama.gov/administrative-services/trademarks
I didn’t realize Alabama had such reasonable LLC filing fees compared to other states. This breakdown made it easy to plan my budget.