How to Form an LLC in Alabama: Complete 2026 Guide
$39 service fee + $200 state fee = $264 total year one. Registered agent service included free for year one, then $125/year. Privacy-focused, family-owned, in business since 1998. Does not sell your data.
Form Your Alabama LLC with Northwest →Alabama LLC at a Glance
| Item | Detail |
|---|---|
| Formation document | Certificate of Formation |
| Filing agency | Alabama Secretary of State |
| State filing fee | $200 |
| Online processing time | 1-2 business days |
| Mail processing time | Several weeks |
| Annual/biennial requirement | Business Privilege Tax Return (Form PPT), due April 15 each year. No annual report to SOS since October 2024 (Act 2024-213). |
| Annual/biennial fee | $50 minimum (BPT, paid to ALDOR not SOS) |
| State income tax | 5% flat rate on net income |
| Franchise tax | Business Privilege Tax: $0.25-$1.75 per $1,000 of Alabama net worth. Minimum $50. Due April 15. |
| Registered agent required | Yes, physical Alabama address required |
| Operating agreement | Not required by law; strongly recommended |
| Name reservation | $25 (required before filing - unique Alabama requirement) |
What You Need Before Filing in Alabama
Before you file with the Alabama Secretary of State, gather the following:
- LLC name that includes "Limited Liability Company," "LLC," or "L.L.C." and is distinguishable from existing Alabama business entities. Check availability at Alabama Secretary of State Business Search.
- Registered agent with a physical street address in Alabama. The agent receives legal documents on behalf of your LLC. P.O. boxes are not accepted.
- Certificate of Formation details: LLC name, registered agent name and Alabama address, management structure (member-managed or manager-managed), organizer name and address.
- Payment method: Credit card for online filings, check payable to Alabama Secretary of State for mail filings.
Important: Alabama requires name reservation before filing. This is a mandatory step that costs $25 and adds 1-2 days to your process. Most other states make name reservation optional.
Step-by-Step: Forming a Alabama LLC in 2026
Choose and Verify Your LLC Name
Search the Alabama Secretary of State business entity database to confirm your name is available in Alabama. Your name must include "Limited Liability Company," "LLC," or "L.L.C." and must be distinguishable from existing entities on record.
Alabama-specific: You must file a Name Reservation ($25) before submitting your Certificate of Formation. This is mandatory in Alabama, not optional like most states. The reservation holds your name for 120 days.
Appoint a Registered Agent
Every Alabama LLC must designate a registered agent with a physical street address in Alabama. The agent receives legal documents and state correspondence on behalf of your LLC during business hours. You can serve as your own registered agent if you have a Alabama street address and are available during business hours, but this exposes your personal address publicly and risks missing important documents.
Northwest Registered Agent charges $39 for Alabama LLC formation and includes a free year of registered agent service. After year one, registered agent service renews at $125/year.
File the Certificate of Formation
Submit your Certificate of Formation with the Alabama Secretary of State online at https://www.sos.alabama.gov/business-entities/llcs or by mail. The state filing fee is $200, which is non-refundable. Online filing is recommended for faster processing (1-2 business days vs. Several weeks by mail).
Obtain Your EIN (Federal Tax ID)
Apply for an Employer Identification Number for free at IRS.gov. The application takes about 5-15 minutes and your EIN is issued immediately. An EIN is required for business banking, hiring employees, and filing taxes. Formation services that charge for EIN assistance are charging for a free government service.
Draft an Operating Agreement
An operating agreement is not legally required in Alabama, but every LLC should have one. It defines ownership percentages, profit and loss allocation, management authority, voting procedures, and what happens if a member leaves or the LLC dissolves. Without one, Alabama default rules under state law apply, which may not reflect your intentions. Northwest Registered Agent includes an operating agreement template with its formation package.
Meet Alabama Ongoing Compliance
No SOS annual report since October 2024 (Act 2024-213). You still owe the Business Privilege Tax (Form PPT) to ALDOR by April 15 each year. Minimum BPT is $50 regardless of revenue.
Alabama LLC Costs: Full 2026 Breakdown
One-Time Formation Costs
| Cost Item | Amount |
|---|---|
| Certificate of Formation (state fee) | $200 |
| Name reservation (required) | $25 |
| EIN (from IRS.gov) | Free |
| Operating agreement (template) | Free with Northwest; $0-$500 attorney |
| Registered agent (Year 1 with Northwest) | Free (included in $39 service fee) |
| Minimum total with Northwest | $264 |
Annual Recurring Costs
| Cost Item | Amount |
|---|---|
| Business Privilege Tax Return (Form PPT) | $50 minimum (BPT, paid to ALDOR not SOS) |
| Registered agent renewal (Northwest) | $125/year (after free year 1) |
| State income tax | 5% flat rate on net income |
3-Year Total Cost Comparison
| Option | Year 1 | Year 2 | Year 3 | 3-Year Total |
|---|---|---|---|---|
| Northwest Registered Agent | $264 | $125 (RA) + fees | $125 (RA) + fees | ~$514 |
| DIY (self as RA) | $225 | State fees only | State fees only | ~$225 |
| DIY + separate RA service | State fee + ~$125 RA | ~$125 RA + fees | ~$125 RA + fees | ~$475 |
Using Northwest Registered Agent gives you formation handling, a free year of registered agent service, an operating agreement template, and compliance reminders for Business Privilege Tax Return (Form PPT), all from a company that does not sell your data.
Alabama LLC Ongoing Compliance
No SOS annual report since October 2024 (Act 2024-213). You still owe the Business Privilege Tax (Form PPT) to ALDOR by April 15 each year. Minimum BPT is $50 regardless of revenue.
Alabama is one of the only states that requires name reservation before you can file your Certificate of Formation. This adds $25 and a step most states do not require.
Additional compliance considerations for Alabama LLCs:
- State income taxes: Alabama LLC pass-through income is subject to 5% flat rate on net income. Keep clean records and work with a Alabama-licensed CPA.
- Federal taxes: Single-member LLCs are taxed as disregarded entities (Schedule C). Multi-member LLCs file Form 1065 and issue K-1s to members.
- Business licenses: Check with your city and county for any required local business licenses or permits.
- EIN requirement: Required for any LLC with employees, for business banking, and for multi-member LLCs.
Frequently Asked Questions: Alabama LLC Formation
The state filing fee for a Certificate of Formation is $200. Alabama also requires a $25 name reservation before you can file, bringing the minimum to $225. Using Northwest Registered Agent adds $39 for formation handling plus a free first year of registered agent service, for $264 total.
No. Alabama eliminated the Secretary of State annual report requirement for LLCs on October 1, 2024 (Act 2024-213). However, every Alabama LLC must still file the Business Privilege Tax Return (Form PPT) with ALDOR by April 15 each year, with a minimum tax of $50.
Yes. Every Alabama LLC must designate a registered agent with a physical street address in Alabama. The agent can be an individual Alabama resident or a business entity authorized to act as a registered agent in the state.
Alabama imposes a 5% state income tax on LLC pass-through income. There is no exemption for LLCs, unlike states such as Wyoming or Texas.
Online filing through the Alabama Secretary of State portal typically processes within 1-2 business days. Mail filings can take several weeks.
Related Guides
- Best LLC Service in Alabama (2026)
- Northwest Registered Agent Review
- How to Get an EIN for Free
- LLC Operating Agreement Guide
- All State LLC Formation Guides
Why I Choose Northwest Registered Agent
After forming 3 LLCs myself and helping clients through the process, I keep coming back to Northwest Registered Agent. Here is why:
- Remarkable Customer Support: Quick, human responses every time.
- Caring & Privacy-Focused: Genuine service with full respect for your privacy.
- Lightning-Fast Formation: Often faster than promised.
- Incredible Value: $39 includes free business address, mail scanning, phone line, business email, domain name, website, and brand protection.
- Clear & Transparent: No hidden fees or surprises.
Ready to form your business? Choose Northwest today!
Frédéric has founded and operated businesses across multiple countries, including 3 LLCs formed using Northwest Registered Agent. He holds certifications as a holistic coach and therapist trainer, is a published author, and has been featured in Le Parisien, IMDb, Goodreads, and international encyclopedias.
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