Alabama LLC Requirements

Updated for 2026 · Official Secretary of State Website

Alabama eliminated its annual report requirement in 2024, making ongoing compliance simpler for LLC owners. With a moderate $200 filing fee and no recurring state report, Alabama is increasingly attractive for in-state entrepreneurs. The state's business-friendly legal framework and low cost of living make it a practical choice for small business formation.

Filing Fee

$200

One-time state fee

Annual Fee

Per year

Processing

3-5 business days

Online filing

Deadline

N/A

Annual report due

Average Cost

Alabama's $200 filing fee is above the national average of roughly $130, but the elimination of annual report fees brings ongoing costs well below most states.

Notable Facts About Alabama LLCs

Alabama eliminated its annual report requirement in October 2024
The Business Privilege Tax only applies if the tax due exceeds $100
Alabama allows single-member LLCs and does not require an operating agreement by law
Online filings are processed through the Alabama Secretary of State's Business Entity portal

Tax Information for Alabama LLCs

Alabama has a Business Privilege Tax (essentially a franchise tax) with a minimum of $100 per year. LLCs taxed as pass-through entities also pay state income tax at individual rates (2%-5%). There is no separate LLC-specific annual tax.

Formation Steps

1

Choose a Name for Your LLC
Select a unique business name that complies with Alabama naming requirements. The name must include "LLC" or "Limited Liability Company" and cannot be the same as an existing registered business in Alabama.
2

Appoint a Registered Agent
Designate a registered agent with a physical address in Alabama who can receive legal documents and official correspondence on behalf of your LLC.
3

File Articles of Organization
Submit your Articles of Organization (also called a Certificate of Formation in some states) to the Alabama Secretary of State. This is the official document that creates your LLC.
4

Create an Operating Agreement
Draft an operating agreement that outlines ownership percentages, member roles, profit distribution, and management structure of your LLC. While not always legally required, it is strongly recommended.
5

Get an EIN from the IRS
Apply for a free Employer Identification Number (EIN) from the IRS. You'll need this for opening a business bank account, hiring employees, and filing taxes.
6

Open a Business Bank Account
Open a dedicated business bank account to keep your personal and business finances separate. This helps maintain your LLC's liability protection.

Visit Official SOS Website

Need a Registered Agent in Alabama?

Every Alabama LLC must have a registered agent with a physical address in the state. A registered agent service ensures you never miss important legal documents or compliance deadlines.

Compare Registered Agent Services

Frequently Asked Questions

How much does it cost to form an LLC in Alabama?

The state filing fee to form an LLC in Alabama is $200 for the Certificate of Formation. This cost is near the national average compared to other states. Additional costs may include a registered agent service ($50-$300/year) and an operating agreement if you hire an attorney.

What is the annual cost of an LLC in Alabama?

Alabama does not require LLCs to file an annual report or pay an ongoing annual fee to the state. Alabama's $200 filing fee is above the national average of roughly $130, but the elimination of annual report fees brings ongoing costs well below most states.

How long does it take to form an LLC in Alabama?

Online filing in Alabama typically takes 3-5 business days. You'll need to file Certificate of Formation with the state. Processing times may vary based on filing volume and the time of year.

Do I need a registered agent in Alabama?

Yes, Alabama requires every LLC to have a registered agent with a physical street address in the state. The registered agent receives legal documents, tax notices, and official government correspondence on behalf of your LLC.

What taxes does a Alabama LLC pay?

Does Alabama require an operating agreement for LLCs?

While not all states legally require an operating agreement, it is strongly recommended for every LLC in Alabama. An operating agreement defines ownership structure, member roles, and how the business will be managed. Without one, your LLC will be governed by Alabama's default LLC laws.