How to Start an LLC in Alabama (2026)
Alabama's Certificate of Formation is the document that creates your LLC. You file it with the Alabama Secretary of State for a $200 fee.
What sets Alabama apart is its Business Privilege Tax. Instead of a simple annual report, your LLC files this tax return with the Department of Revenue. It's due every year your LLC stays open.
This page walks through forming a brand-new domestic LLC in Alabama, start to finish. If you already have an LLC from another state, adding it here instead means a foreign LLC filing. The Business Entities Division charges $150 for it.
Quick Summary
- Search the state's name database before you request a reservation. Alabama won't accept your Certificate of Formation without an attached Certificate of Name Reservation.
- Use a real Alabama street address for your registered agent. A PO box or an answering service will get your filing rejected.
- Mark your Business Privilege Tax deadline once your LLC is active. It's due with your federal tax return.
Alabama LLC Requirements at a Glance
Here's the complete snapshot of what it takes to form and maintain an LLC in Alabama. It's pulled straight from the Secretary of State and the Department of Revenue.
| LLC requirement | State-specific answer |
|---|---|
| Filing document | Certificate of Formation (Domestic LLC) |
| Filing authority | Alabama Secretary of State, Business Services |
| State filing fee | $200 |
| Online filing | Yes, Alabama Secretary of State Online Services (Domestic Formation) |
| Processing time | Online: real time. Mail: not published |
| Registered agent | An Alabama resident, or an entity registered here, with an office at the LLC's street address. No PO boxes or answering services |
| Annual report | No separate report. Form PPT substitutes, due with your federal return. Skipped if tax is $100 or less |
| Publication required? | No. Neither the Certificate of Formation instructions nor the SOS LLCs filing page mention a newspaper-publication step |
| State business tax | Alabama Business Privilege Tax (Dept. of Revenue), $0.25-$1.75 per $1,000 of net worth, capped at $15,000. Skipped if the calculated tax is $100 or less |
| Last verified | September 3, 2026 |
How to Start an LLC in Alabama: 6 Steps
Forming an Alabama LLC takes six steps. They run from picking a name to filing your first tax return. Get the order wrong and you risk a rejected filing.
Step 1: Choose and check your LLC name
Your name must include the words Limited Liability Company, L.L.C. or LLC. It also has to be different from every other name already on file with the state.
Look up existing Alabama LLC names before you get attached to one. A name too close to one already on file gets turned down. Once you find one that's free, reserve it. You'll need a Certificate of Name Reservation before you file.
Step 2: Appoint a registered agent
Your registered agent can be an Alabama resident or a business allowed to operate in the state. Either way, they need a real Alabama street address. A PO box or an answering service doesn't qualify [1].
If you'd rather not use your own address, a registered agent service in Alabama can stand in for you. That keeps your home address off public filings.
Step 3: File the Certificate of Formation with the Alabama Secretary of State
File your Certificate of Formation with the Business Services division, online or by mail. Attach your name reservation certificate and pay the fee.
The next section walks through what the Certificate of Formation form asks for. It also covers how the Alabama Secretary of State takes payment. See how to start an LLC for the general filing steps every state follows.
Step 4: Create an operating agreement
Alabama doesn't need an operating agreement, and yours doesn't even have to be written down. It can be spoken instead.
Without one, the state's default LLC rules take over. They control how your company runs [2]. That's why many owners still put something in writing.
Step 5: Get an EIN
An EIN is free at irs.gov. The IRS issues it right away once you finish the online application in one sitting. You'll need it to open a business bank account. You'll also need it to file your Business Privilege Tax return.
Step 6: File your Alabama Business Privilege Tax return
File Form BPT-IN with the Alabama Department of Revenue within two and a half months of forming your LLC. Skip it only if your privilege tax comes out to $100 or less.
This return covers the ground an annual report would cover in other states. Alabama doesn't ask for a separate filing.
Filing the Certificate of Formation in Alabama: What to Expect
1. What the form asks for
The Certificate of Formation asks for your LLC's name, with a copy of the Name Reservation Certificate attached. It also wants your registered agent's name and the registered office's street address and county in Alabama.
Add a mailing address if it's different from the street address. You'll also confirm your LLC has at least one owner on file.
Boxes let you flag a Series LLC, a Professional LLC or a Non-Profit LLC. You can also set a delayed effective date, up to 90 days out. An organizer or attorney-in-fact signs at the bottom and prints their name and title.
2. Fee and payment methods
Pay by check or money order made out to the Alabama Secretary of State. A credit card works too, but it adds a 3% plus $2 convenience fee.
A dishonored check costs an extra $30 on top of the filing fee. It also pulls your filing out of the index until you get it fixed.
3. Processing times
File online and your Certificate of Formation processes in real time. That's about as fast as you can type the form. Mail-in filings don't come with a published turnaround.
That makes it mostly a question of which method you pick. See how long it takes to form an LLC in Alabama for the full picture.
| Filing method | Processing time |
|---|---|
| Online | Real time, processed while the online form is completed |
| Not published | |
| In person | Not offered as a separate walk-in channel. A mailed filing can instead be marked hold-for-pickup at the Montgomery office |
| Expedited | Not offered |
| Current state estimate | Not published |
4. Where to file by mail or in person
Mail your Certificate of Formation to Secretary of State, Business Services, P.O. Box 5616, Montgomery, Alabama 36103. There's no separate walk-in filing option.
You can still mark your paperwork hold-for-pickup at the Business Services office, 770 Washington Ave., Suite 580, Montgomery. That way it won't be mailed back.
5. Common reasons filings are rejected
The Secretary of State doesn't publish a formal rejection list. Its own rules still point to a few common trip-ups.
An untyped form gets returned without review. A registered office listed as a PO box gets bounced. A card that won't authorize, or a check that bounces, pulls your filing out of the index.
6. What you receive when it is approved
Approval brings back a stamped copy of your Certificate of Formation. Online filers get it through the portal itself. Mail-in filers only get it back by sending an extra copy of their form. They also need a self-addressed, stamped envelope.
What It Costs to Start an LLC in Alabama
Starting an LLC in Alabama costs more than just the filing fee. See the full cost of starting an LLC in Alabama. It covers the mandatory name reservation and your first Business Privilege Tax return.
| Cost item | Amount |
|---|---|
| State filing fee | $200 |
| Name reservation | $25 by mail, or $28 online by credit card. Mandatory before filing the Certificate of Formation [Ala. Code Sec. 10A-1-4.02(f)] |
| Registered agent | $0 when a qualifying individual or entity serves and maintains a business office at the registered office's street address (Ala. Code Sec. 10A-1-5.31) |
| Certified copy | $10.00 certification fee plus $2.00 per page copying fee (a separate Certificate of Existence costs $25.00) |
| Expedited filing | Not offered. The Fee Schedule lists no expedite tier for any entity filing, and online Certificate of Formation filings already post in real time |
| Annual report | No separate report. Form PPT substitutes, due with your federal return. Skipped if tax is $100 or less |
| Other mandatory state fees | $25 Name Reservation (mandatory first). Form BPT-IN if the calculated tax exceeds $100, due within two and a half months of formation |
The $25 name reservation and $200 filing fee are the only costs you can't skip. A commercial registered agent service or a certified copy of your filed certificate are optional extras. Add them only if you want the convenience.
Alabama-Specific Rules That Change the Process
1. Naming restrictions and restricted words
Beyond the basic rule that your name must be different from others, some words trigger extra paperwork. A name with "bank" or "insurance" in it needs a letter from the relevant state commissioner's office.
A licensed title such as "engineer," "architect," or "attorney" in your name means extra proof. Attach a copy of that owner's Alabama license, or a letter from the licensing board.
Engineers and landscapers need to go a step further. They add a Certificate of Authorization from the Alabama Engineering Board [3] to their paperwork.
2. Professional LLC rules
Alabama has a Professional LLC option for licensed professions. If that applies to you, check the "Professional LLC" box on your Certificate of Formation.
Reserve your name with the "PLLC" designator. File under Title 10A, Chapter 5A, Article 8 instead of the standard LLC chapter.
3. What the state discloses about your LLC
Your Certificate of Formation names your registered agent and whoever signs as organizer. It also confirms your LLC has an owner in place.
It doesn't ask you to list every member's or manager's name. That ownership detail stays off the public filing itself.
4. No publication requirement
Unlike a handful of other states, Alabama never makes you publish a notice of your new LLC in a newspaper.
Neither the Certificate of Formation nor the Secretary of State's filing rules mention it. You can skip budgeting for publication costs entirely.
5. Business Privilege Tax instead of a franchise tax
Alabama taxes LLCs through the Business Privilege Tax. The Department of Revenue runs it instead of the Secretary of State.
The rate runs from $0.25 to $1.75 per $1,000 of your net worth. It depends on your taxable income and caps out at $15,000 a year.
If your tax comes to $100 or less, no return is due that year. That also covers your Alabama annual report.
6. No forced dissolution for a missed tax return
Miss your Business Privilege Tax return and Alabama won't dissolve your LLC for you. State law only ends an LLC through a members' agreement or full consent. It can also end when no members are left or a court orders it [4].
The tax bill just keeps growing every year. You have to pay it or formally dissolve your LLC in Alabama yourself.
What to Do After Your Alabama LLC Is Approved
Getting your Certificate of Formation approved is just the beginning. A few practical steps keep your LLC compliant and your liability protection intact.
- Open a business bank account: bring your filed Certificate of Formation and your EIN to the bank. Mixing personal and business funds is a quick way to lose your liability protection.
- Alabama doesn't issue one blanket state business license. Get a county Business Privilege License from the Probate Office where your LLC operates. Add any municipal license your city requires too.
- Register your tax accounts: beyond the Business Privilege Tax, you may need a sales, use or withholding tax account. Register it with the Department of Revenue. Filing LLC taxes in Alabama walks through which accounts apply to you.
- General liability and other business coverage isn't required to file your Certificate of Formation. Many owners add it anyway, once they start operating.
- Basic bookkeeping from day one makes your Business Privilege Tax return easier to prepare. It also keeps your net worth calculation accurate.
- Your Business Privilege Tax return is the compliance deadline that matters most for an Alabama LLC.
| Compliance item | Deadline, fee and department |
|---|---|
| Initial report | Form BPT-IN, due within two and a half months of formation. Skipped if the calculated tax is $100 or less (TY2026) |
| Annual or biennial report | Form PPT or CPT, due with your federal return. Skipped if tax is $100 or less |
| State tax registration | Business Privilege Tax account with ALDOR via My Alabama Taxes, plus sales, use or withholding accounts if the LLC's activities require them |
| Renewal deadline | Not applicable at the state level. A county Business Privilege License, issued through the County Probate Office, renews on that county's own schedule |
| Late fee | None published. Alabama won't force a dissolution for a missed return. The tax stays due every year until the LLC is legally dissolved |
| Responsible state department | Alabama Secretary of State, Business Services (formation filings), and Alabama Department of Revenue, Business Privilege Tax Section (tax filings) |
FAQs
Do I Need to Reserve My LLC Name Before Filing in Alabama?
Yes, you do need to reserve your LLC name before filing in Alabama. A Certificate of Name Reservation costs $25 by mail or $28 online. Alabama needs it before your formation paperwork can go through.
What Happens If I Don't File My Alabama Business Privilege Tax Return?
If you don't file your Alabama Business Privilege Tax return, Alabama doesn't publish a specific late fee or penalty amount for missing it.
Is There a Separate Annual Report for Alabama LLCs?
No, there's no separate annual report for Alabama LLCs. Form PPT or CPT is the return they file instead, due with your federal return.
Can I Be My Own Registered Agent in Alabama?
Yes, you can be your own registered agent in Alabama. You need a real Alabama street address, since PO boxes and answering services don't qualify as a registered office. That address becomes part of the public record, so some owners hire a registered agent service instead.
References:
- https://law.justia.com/codes/alabama/2018/title-10a/chapter-1/article-5/division-d/section-10a-1-5.31/
- https://law.justia.com/codes/alabama/2021/title-10a/chapter-5a/article-1/section-10a-5a-1-08/
- https://www.sos.alabama.gov/sites/default/files/2022-01/domesticEntityNameReservation.pdf
- https://law.justia.com/codes/alabama/2021/title-10a/chapter-5a/article-7/section-10a-5a-7-01/
