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Alabama LLC Cost

The minimum starting cost to form an LLC in Alabama is $225 ($236 online or by credit card). This cost includes the $25 fee to reserve your LLC name and the $200 fee to file the Certificate of Formation with the Alabama Secretary of State. However, you’ll need to factor in other expenses, such as the Alabama business privilege tax, local business license fees, and business insurance. We’ll explain the most common costs of starting an LLC in Alabama, beginning with the most essential.


What You'll Find In This Article:

  1. Alabama Name Reservation Fee
  2. Alabama LLC Formation Filing Fee
  3. Alabama Business Privilege Tax
  4. Alabama Registered Agent Fee
  5. Alabama Business Privilege License Fee
  6. Alabama Professional Licensing Fees
  7. Local Business License Fees in Alabama
  8. Optional LLC Fees in Alabama
  9. Business Insurance Premiums
  10. Cost to Register a Foreign LLC in Alabama

Alabama Name Reservation Fee: $25

Alabama is the only state in which you are required to reserve your business name before you form your LLC. The fee for name reservation is $25 ($27.75 online). You can reserve your business name:

  • Online via UCC Electronic Filing System. Processing time is immediate.
  • By mailing the Name Reservation Request Form to the Secretary of State. Processing time can take up to two weeks. You will be mailed a Name Reservation Certificate, which you must attach to your Certificate of Formation.

Alabama LLC Formation Filing Fee: $200

Once your name reservation has been accepted, you can file the Alabama Certificate of Formation, which costs $200 ($208 online). (The cost is the same for Alabama series LLCs.) Filing this certificate officially brings your LLC into existence. You can file your Certificate of Formation online or by mail. If you file by mail, you must submit your form in duplicate and attach your Name Reservation Certificate.

Alabama Business Privilege Tax: $100 minimum

Alabama LLCs need to pay the Business Privilege Tax to the Alabama Department of Revenue every year. The tax rates range from $0.25 to $1.75 per $1,000 of income, with a minimum tax of $100. Here is a breakdown of the tax rates:

Total Alabama Revenue –

More than OR equal to

BUT less than

Tax Rate per $1000

of taxable Alabama income

$0

$1

.00025

$1

$200,000

.00100

$200,000

$500,000

.00125

$500,000

$2,500,000

.00150

$2,500,000

————

.00175

The due date for the business privilege tax return is 2.5 months into your fiscal year, which for most businesses will be March 15th.

Find out how to file your Alabama Business Privilege Tax Return.

Alabama Registered Agent Fee

According to Alabama Code §10A-1-5.31, all registered Alabama businesses need to maintain a registered agent, who must be an Alabama resident with a physical office in the state. Your registered agent must list their address publicly and be able to accept service of process on behalf of your LLC.

You can be your own Alabama registered agent or appoint another individual, or you can hire a professional registered agent service. Hiring a professional registered agent keeps your personal address off the public record and ensures that you won’t miss a legal summons when you’re on vacation. Registered agent fees vary. Northwest’s fee for registered agent service is $125, and our price never goes up.

Learn more about Northwest’s registered agent service.

Alabama Business Privilege License Fee

Most businesses in Alabama need a Business Privilege License (not to be confused with the Alabama Business Privilege Tax Return). This license is a state-wide requirement but is issued at the county level. You’ll apply for your privilege license through your local County Probate Office. If you do business in multiple counties, you’ll need to apply for a privilege license in each county. Licensing fees vary by county and profession. Consult the AL Handbook of Privilege and Store Licenses to find out how much you’ll need to pay.

Learn how to get an business license.

Alabama Professional Licensing Fees

Professions that require specialized training—such as medicine, law, and cosmetology, among others—require additional licensing. The fees for professional licensing applications vary widely. For example, the Registered Forester Application costs $60, whereas the Registered Interior Designer application costs $300. You must apply for a professional license through the board that regulates your profession in Alabama.

Local Business License Fees in Alabama

Depending on your business type and location, you might need to obtain other licenses and permits through your local government office, such as:

  • Public health license
  • Zoning and land-use permits
  • Building permit
  • Fire department permit

Fees for these licenses and permits will vary.

Optional LLC Fees in Alabama

We’ve covered the main costs of starting an Alabama LLC, but your LLC might have other expenses as well, such as:

Alabama Trade Name

A trade name (also called a DBA) is a name used by a business that is not the legal name of the business. Registering a trade name in Alabama costs $30 and lasts for five years. Registering your trade name isn’t legally required in Alabama, but doing so keeps other businesses in Alabama from using your name. To register your trade name, file an Application to Register Trade Name with the Secretary of State’s office.

Certified Copies of Business Documents

Ordering a certified copy of your business documents—such as Articles of Organization—costs $10 per certified document + $2 per page. You may need a certified copy of your Articles of Organization when opening a business bank account or registering your business in another state. Some companies keep certified copies of their business documents on file, just in case.

Find out how to get a certified copy of the Alabama Articles of Organization.

Alabama Certificate of Existence

Getting an Alabama Certificate of Existence costs $25 ($27.50 online). A Certificate of Existence is a document issued by the Alabama Secretary of State that proves that your business is active. You typically need a recent Certificate of Existence when registering your business in another state.

Here’s how to get an Alabama Certificate of Existence.

Business Insurance Premiums

Most businesses will benefit from getting some kind of business insurance, whether that’s liability insurance, commercial property insurance, or workers’ comp. If your business has five or more employees, you’re required to purchase workers’ compensation insurance. The rates for workers’ comp insurance vary widely by industry. For example, the insurance rate for a clerical worker in Alabama averages around $0.20 per $100 of covered payroll, whereas the average rate for a roofing contractor is around $21 per $100 of payroll. You must purchase this insurance through a private company, and it’s a good idea to shop around for a competitive rate.

Learn more about LLC Business Insurance.

How much does it cost to register a foreign LLC in Alabama?

To register a foreign LLC in Alabama, you’ll pay the Alabama Secretary of State’s office $175 ($184 online). This cost includes the $150 filing fee for the Foreign LLC Application for Registration and the $25 fee for the LLC Name Reservation. You’ll need to register your foreign LLC in Alabama if your LLC was not formed in Alabama but you want to do business there.