Starting an LLC in Alabama costs $200 at minimum, and every dollar of it goes to the state. According to the Alabama Secretary of State, Business Services, the filing fee for the Certificate of Formation is $200. How to start an LLC in Alabama comes down to one filing, and you can do it yourself on the state’s website. A formation service is optional.
This guide walks you through each step, what it costs, and where a paid service might save you time.
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Last updated: October 11, 2026
Key Takeaways
- The state filing fee for an Alabama LLC is $200, paid when you file the Certificate of Formation.
- An EIN from the IRS is free. You never have to pay for one.
- Alabama has no Secretary of State annual report. You file a business privilege tax return with the Alabama Department of Revenue each year instead.
- No separate filing fee is stated for the return, but the business privilege tax itself may be owed. Only LLCs that would owe just the minimum tax are exempt from the tax.
- A formation service is a convenience, not a requirement.
“Free” in the formation world means no middleman fee. The state fee is unavoidable. Paying anyone else to file your paperwork isn’t. For more on that idea, see our guide to how to incorporate your business for free.
Alabama LLC Costs at a Glance
| Item | Cost | When |
|---|---|---|
| Certificate of Formation (Secretary of State) | $200 | One time, at filing |
| Annual report to Secretary of State | None. Alabama has no Secretary of State annual report | N/A |
| Business privilege tax return (Alabama Department of Revenue) | No separate filing fee stated; the tax may be owed ($0 only for minimum-tax entities) | Every year; check the Department of Revenue for your due date |
| EIN (IRS) | $0 | One time |
Sources: Alabama Secretary of State, Business Services; Alabama Department of Revenue; IRS. Figures current as of October 11, 2026.
How to Start an LLC in Alabama: Step by Step
Here’s the full checklist. Each step is explained below.
- Choose and check your business name.
- Appoint a registered agent.
- File the Certificate of Formation.
- Create an operating agreement.
- Get a free EIN from the IRS.
- Open a business bank account.
- File your business privilege tax return every year.
Want the big picture first? Our 7-step overview covers the process in any state.
1. Choose and check your business name
Use the business name search on the Alabama Secretary of State, Business Services website to see what’s already taken before you commit. Check the Secretary of State’s site for the naming rules, including required words like “LLC,” and for whether and how you can reserve a name.
Also check that the matching web domain and social handles are available. The state’s search doesn’t cover those.
2. Appoint a registered agent
A registered agent is the person or company that receives official legal and government mail for your LLC. You can serve as your own agent, pick someone you trust, or hire a registered agent service. Check the Alabama Secretary of State’s site for the requirements an agent must meet.
Say you’re forming a one-person LLC and work from home. You could list yourself as agent. The trade-off is that your name and address become part of the public record, which some owners prefer to avoid. A paid agent is a choice, not a requirement.
3. File the Certificate of Formation
In Alabama, the document that creates your LLC is the Certificate of Formation. Many states call it “articles of organization.” You file it with the Alabama Secretary of State, Business Services, and the filing fee is $200.
Start at the Secretary of State’s LLC page. It has the current form and filing instructions. Check there for current processing times, accepted filing methods, and exactly what information the form asks for.
Keep a copy of the filed certificate. Your bank will want it, and so will your records.
4. Create an operating agreement
An operating agreement is an internal document that sets out how your LLC runs: who the members (owners) are, who owns what share, and how decisions and profits are handled. Check the Secretary of State’s site to confirm whether Alabama asks you to file it. Even a solo owner benefits from having one in writing. It helps show your LLC is a separate entity from you, and banks often like to see one.
A one-member agreement can be short. Cover the owner’s name, the business purpose, how money goes in and out, and what happens if the owner leaves or dies. With multiple members, spell out ownership percentages, voting, and what happens when someone wants out.
5. Get a free EIN from the IRS
An EIN (Employer Identification Number) is a federal tax ID for your business. According to the IRS, you can get one directly from the IRS online for free, and you never have to pay a fee for an EIN. Sites that charge for EINs are charging for something you can do yourself at no cost.
Apply after your Certificate of Formation is filed so you can use your LLC’s exact legal name. If you’re weighing how your LLC will be taxed, read our guide on LLC vs. S corp differences.
6. Open a business bank account
Keep business money separate from personal money. Bring your filed Certificate of Formation, your EIN confirmation, and your operating agreement. Requirements vary by bank, so ask what each one needs.
If you’d rather skip the branch visit, online business banking is an option. Novo is one online business bank account to consider. Compare fees and features against your local bank before you choose.
7. File your business privilege tax return every year
This is where Alabama differs from many states. According to the Alabama Department of Revenue, Alabama has no Secretary of State annual report. Instead, LLCs file a business privilege tax return with the Department of Revenue each year. No separate filing fee is stated, but the business privilege tax itself may be owed, and only entities that would owe just the minimum tax owe $0. Check the Department of Revenue for your due date.
The Department also says that for tax years beginning on or after January 1, 2024, an entity that would otherwise owe only the minimum tax is exempt from the tax. So some small LLCs may owe nothing. The return still needs your attention.
Read the Department of Revenue’s guidance, or ask a tax professional whether your LLC must file and what, if anything, you owe.
How to Start an LLC in Alabama Yourself vs. With a Formation Service
DIY route: $200 state fee plus $0 for the EIN. First-year formation cost: $200, not counting any optional registered agent fee.
Formation service route: $200 state fee plus whatever the service charges. Fees vary by provider and package, so check the current price on the provider’s site. First-year cost: $200 plus the service fee.
What does a service add? Convenience. It prepares and submits the filing for you, may include a registered agent, and can provide templates like an operating agreement. Bizee is one such service. If you’re short on time or want a registered agent bundled in, it’s worth comparing. If you’re comfortable filling out a form, the state’s own site does the job for the state fee alone.
Our comparison of the best LLC formation services shows what to look for.
You can generally skip these extras at the start: rush processing (check the Secretary of State for what’s offered), paid EIN filing, and bundled “compliance kits.”
Keeping Your Alabama LLC in Good Standing
Alabama’s ongoing requirement is simple on paper.
- Business privilege tax return: File yearly with the Alabama Department of Revenue. No separate filing fee is stated, but the tax itself may be owed; $0 applies only to minimum-tax entities.
- Due date: Check the Department of Revenue for your due date each year.
- Late penalties: Check the Department of Revenue for current late-filing and late-payment penalties.
- No Secretary of State annual report: Alabama doesn’t require one.
Mark the due date on your calendar the day you form your LLC. Keep your registered agent information current with the Secretary of State, and keep your operating agreement and records in one place.
Curious how Alabama stacks up? See our LLC filing fees by state guide.
Alabama LLC FAQ
How much does it cost to start an LLC in Alabama?
According to the Alabama Secretary of State, Business Services, the state filing fee for the Certificate of Formation is $200. An EIN from the IRS is free. A formation service or paid registered agent is optional and adds to that total.
Does Alabama have an annual report for LLCs?
No. According to the Alabama Department of Revenue, Alabama has no Secretary of State annual report. LLCs file a business privilege tax return with the Department of Revenue each year instead.
Do I have to pay the business privilege tax?
Not necessarily. No separate filing fee is stated, but the tax itself may be owed. According to the Alabama Department of Revenue, for tax years beginning on or after January 1, 2024, an entity that would otherwise owe only the minimum tax is exempt from the tax. Confirm your situation with the Department of Revenue or a tax professional.
Do I need to pay for an EIN?
No. The IRS says you never have to pay a fee for an EIN, and you can apply for free at IRS.gov.
Do I need a formation service to start an LLC in Alabama?
No. You can file the Certificate of Formation yourself with the Alabama Secretary of State, Business Services. A service can save time on paperwork, but it isn’t required.
Your Next Step
Open our 7-step incorporation overview and use it as your checklist. Then head to the Alabama Secretary of State’s LLC page to file your Certificate of Formation.
Disclaimer: The information in this article is for educational purposes only and does not constitute legal, tax, or financial advice. Business formation rules, fees, and deadlines vary by state and change often. Always consult a qualified attorney, CPA, or tax professional before making decisions about your business.
