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How To Start An LLC In Alabama

Alabama LLCs are formed by filing a form called the Certificate of Formation (also known as Articles of Organization) with the Alabama Secretary of State.

In Alabama (no other state does it like this), you send your certificate of formation to the probate judge in the county where you’ll be forming your LLC. That judge will pass on the approved paperwork to the secretary of state. Once filed, the Alabama Secretary of State will send you a confirmation that your LLC has been formed.

The complete steps to forming an LLC in Alabama are as follows:

  1. Perform an LLC Name Reservation with the Alabama Secretary of State and pay $28
  2. File a document called the Alabama LLC Certificate of Formation
  3. Pay the Alabama Secretary of State $100 to file the Certificate of Formation (include an extra $100 for expedited filings)
  4. Wait 5 days or upwards of 6 months depending upon your filing method and you’ll get filed articles back showing your LLC is formed
  5. Get a Federal EIN tax ID for the LLC
  6. Create an Alabama LLC Operating Agreement
  7. Take these documents to the bank and get an Alabama LLC bank account
  8. Pay the initial business privilege tax within 2.5 months of your formation date. This fee is collected by the Department of Revenue
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Free Certificate of Formation. This is the form you file to create an Alabama LLC

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How to File an Alabama LLC Certificate of Formation

To form an Alabama LLC, you complete and file the LLC Certificate of Formation in the following steps:
Step 1 Reserve your LLC name online on the Alabama Secretary of State’s website
Step 2 Attach a copy of the name reservation to the Certificate of Formation
Step 3 List the physical address of your business and include the mailing address if different
Step 4 Decide if you want to hire a registered agent service to minimize the public disclosures
Step 5 Certify there is at least one member in the LLC
Step 6 Indicate whether LLC is a Series LLC or Professional LLC
Step 7 Indicate effective date of LLC filing
Step 8 Attach any other matters the members decide to include
Step 9 Sign and Date the Certificate of Formation

How Do I Form An LLC In Alabama?

We can form your LLC for you, but if you want to do it yourself, we’ve created an in-depth guide on how to form an LLC in Alabama.

Creating a business entity isn’t nearly as difficult as those who charge to form them might have you think. Forming an Alabama LLC a lot like following a recipe, so we’ve cooked up some instructions for you:

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What you’ll need to form an Alabama LLC:

  1. Certificate of Formation (or more commonly known as Articles of Organization)
  2. $28 name reservation fee
  3. $158 filing fee (six months is the standard filing time in Alabama, so if you want the filing done within three weeks add an additional $100)
  4. An operating agreement (you should know how your LLC will be structured before you file)
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How to Start an LLC in Alabama

  1. Reserve LLC Name
    When forming an Alabama LLC, you don’t start with the Certificate of Formation. You begin with a name reservation. Alabama is the only state where you have to reserve your LLC’s name first—with foreign and domestic filings. Fortunately, this can be done online. Perform a free secretary of state business name search. Alabama LLC names must contain the words “limited liability company” or the abbreviation “L.L.C.” or “LLC”. To complete the filing you must pay a $28 reservation fee. After you’ve reserved your name, print out the reservation and keep it handy.
  2. Services
    With your LLC name reserved, you’re ready to complete the filing:

    • No matter whether you file with our free Certificate of Formation or the certificate provided by the state, the first thing you’ll need to do is fill in your Alabama LLC’s name, which should be easy enough since you’ve already reserved it.
    • Attach a copy of the name reservation to the Certificate of Formation.
    • List the physical address of your business and include the mailing address if different.
    • You will need to list the name and address of your Alabama registered agent. You can appoint yourself or hire a third-party like us. To learn more about registered agents and what they provide, see our What is a Registered Agent? page.
    • The next section asks for your Alabama LLC’s purpose. What you write doesn’t need to be all-encompassing; simply stating the nature of your LLC’s business will work just fine.
    • You need to list the name and address of at least one organizer. In Alabama, the organizer doesn’t need to be a member or manager of the LLC (although they could be), just someone authorized to complete the paperwork.
    • The next several sections are unique to Alabama LLCs. The Alabama certificate of formation asks specifically about the structure of the LLC, and for this reason it’s a good idea to adopt an operating agreement prior to completing your filing. The operating agreement will be your LLC’s governing document and should address each aspect of the Certificate of Formation’s following sections. We provide operating agreements free of charge.
    • Section 8 of the Alabama Certificate of Formation asks for your manager(s)’s name and address, if your LLC will be managed by someone other than one of its members. If you have no managers, you may leave this section blank.
    • Section 9 asks that you to state whether the LLC has the right to admit additional members and what the terms and conditions of the admittance would be. All of this information should be covered in your operating agreement.
    • If the existence of your Alabama LLC hinges on the continued membership of one or more members, you’ll need to include this provision as an attachment to the certificate of formation.
    • Lastly, at the bottom of the Certificate of Formation you can indicate if you would like your Alabama LLC to be formed at a date later than when the probate judge approves your filing by writing in a specified date. This is not mandatory.

 

  1. Find county judge and mail the Certificate of Formation
    All domestic filings in Alabama need to be sent to the probate judge in the county where the LLC is being formed. This means there are a lot of different places where you might have to send your filings for approval in Alabama. There is an approximate wait time of six months for filings not expedited. You should hear back from the Alabama secretary of state within three weeks if you choose the $100 expedite option.
  2. Get an EIN
    Once you’ve received your Certificate of Formation from the Secretary of State, your Alabama LLC has technically been formed—but there are a couple things you need to do to make sure it remains active in its first year. First, you need to get an EIN. Employer Identification Numbers (EINs or FEINs) are like social security numbers for businesses. Once your LLC has been formed with the state, you’ll need to contact the IRS and apply for your EIN. You can apply on the IRS’ website and receive your number instantly or you can file form SS-4 to get an EIN for your LLC.
  3. Pay Initial Business Privilege Tax
    All new Alabama businesses need to file and pay their Initial Business Privilege Tax within 2.5 months of their formation date. The tax is a minimum of $100. It’s a simple form, but you’ll need your EIN to complete it.
  4. Run your business
    With your Alabama LLC now up and running, you need to focus on running your business. To do so, you’ll likely need to do things like open a bank account in your LLC’s name, obtain city and county licenses, or receive zoning approval from your city. To learn how to do these things and more, visit our starting an Alabama business page for more information.
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Alabama LLC Maintenance

Below, you’ll find some waypoints to help you navigate operating an LLC in Alabama.

Annual reports

Alabama LLCs have annual reports, but what is semi-unique is that the filing of an annual report coincides with a tax called the Alabama Business Privilege Tax. Fortunately, you’ll only need to file one form, Form-PPT with the Alabama Department of Revenue. The privilege tax is a minimum of $100 and is due on March 15th. To learn more about these annual reports, see our Alabama annual report page.

Taxes

All revenue in your Alabama LLC will be passed on to you personally, which means you’ll have to pay Alabama’s personal tax rate (as well as applicable federal taxes) on all profit that passes to you through your LLC. See our Alabama taxes page for more specifics.

With an LLC, you can also elect to be taxed as an S Corp. This is an election made with the IRS, and in some situations can save you money. To learn more, go to our S Corp election page.

Doing business in other states

In order to qualify your Alabama LLC in a new state, you’ll need to obtain an Alabama Certificate of Existence from the Secretary of State. Then you’ll need to file the Certificate of Authorization in your new state and attach a Certificate of Good Standing to the application. The cost varies per state. See our foreign LLC registration page for more information.

Other considerations

  1. Should you need certified copies of your Certificate of Formation, you can find out how to get them on our Alabama certified copy page.
  2. To find out how to obtain an apostille for your LLC, see our Alabama apostillepage.
  3. If you need to change your Alabama registered agent, we’ll show you how.
  4. Reviving an Alabama LLC is not possible, as the Alabama Secretary of State no longer administratively dissolves LLCs. If your LLC in Alabama has been dissolved, you’ll need to form a new limited liability company. However, if you need to dissolve your Alabama LLC, then we have instructions on how to accomplish that.
  5. And finally, when it’s time to sell, we also have free forms you can use to sell your LLC membership interest.
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What You Need To Know About Forming An LLC In Alabama:

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

Total cost: $186. This fee covers the $100 filing fee, the $58 probate judge fee, and $28 reservation fee.

How long does it take to form an Alabama LLC?

Alabama will take six months getting back to you, though, so if you want it formed sooner you can include an additional $100 for an expedite fee and receive confirmation within a few days.

Do Alabama LLCs need name reservations?

Yes. Alabama is the only state that requires you to reserve your name prior to filing. Name reservations are required in Alabama and cost $28.

Alabama LLC Name requirements:

You can do an Alabama LLC name search for free online. Your LLC’s name must be unique and include the words “Limited Liability Company” or the abbreviation “L.L.C.” or “LLC”.

Registered agent?

On the Certificate of Formation, you must designate an Alabama registered agent.

How are Alabama LLCs governed?

You form the LLC with the Secretary of State, but an LLC is governed internally by its operating agreement.

Where can I find forms for my Alabama LLC?

You can find every legal document you’ll need for your Alabama LLC in our Free LLC Forms section.

What forms do I need?

Links to forms you’ll most likely need to start your limited liability company in Alabama are provided below:

Get a Tax ID Number

After you receive confirmation from the state, you’ll need to obtain an Employer Identification Number for your LLC, or what’s more commonly known as an EIN.

Open a bank account

After you receive confirmation from the state, you’ll need to obtain an Employer Identification Number for your LLC, or what’s more commonly known as an EIN.

What if I want to form a corporation instead?

After you receive confirmation from the state, you’ll need to obtain an Employer Identification Number for your LLC, or what’s more commonly known as an EIN.

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