Why Start an Alabama LLC?
With low sales and income tax rates, affordable utilities, and a very low cost of living, and many tax incentives, the state of Alabama is a great place to form your LLC.
For most Alabama entrepreneurs, the fastest and easiest way to start a business is to create an Alabama limited liability company (LLC), an entity ideal for startups and small- to medium-sized businesses. It gives you the advantages and protections that larger Alabama corporations benefit from, but with simplified rules and regulations.
If an LLC isn't the right entity for the type of business you're starting, you may want to consider forming a Alabama Corporation instead.
With low sales and income tax rates, affordable utilities, and a very low cost of living, and many tax incentives, the state of Alabama is a great place to form your LLC.
For most Alabama entrepreneurs, the fastest and easiest way to start a business is to create an Alabama limited liability company (LLC), an entity ideal for startups and small- to medium-sized businesses. It gives you the advantages and protections that larger Alabama corporations benefit from, but with simplified rules and regulations.
If an LLC isn't the right entity for the type of business you're starting, you may want to consider forming a Alabama Corporation instead.
Benefits of starting an Alabama LLC:
Easy tax filing and potential advantages for tax treatment
Quick and simple filing, management, compliance, regulation and administration
Protect your personal assets from your business liability and debts
Learn more about the advantages of an LLC business structure.
In this guide, you’ll find details on how to name your LLC, how to get a Registered Agent, the fees you’ll need to pay, business taxes and much more. We also cover what you'll need to register and file your LLC, and how you'll engage the Alabama Secretary of State.
Starting a Business in Alabama Checklist
To help you along the way, use our Starting a Business checklist to keep track of everything you need to do to get your business up and running.
To help you along the way, use our Starting a Business checklist to keep track of everything you need to do to get your business up and running.
How to Form an Alabama LLC Yourself in 6 Steps
Step 1: Choose a Unique Business Name and Complete a State Business Search
You’ll need a distinctive and original name for your LLC that isn’t being used by any other business in the state. If you’re having a hard time coming up with a name, try using Bizee’s Business Name Generator to get some ideas. You'll need to follow a few naming rules, which you can read about in detail on the Alabama Business Names page.
Once you’ve chosen a name, you’ll need to make sure it’s available in Alabama. To find out whether another company in the state is using your chosen business name, use our tool to do a business name search. You can also carry out a name search on the Alabama Secretary of State website.
The state of Alabama requires that you file a Name Reservation Request form before filing your Certificate of Formation.
We Can Search the Alabama Business Registry for You
Use Bizee's Business Name Search Tool
Step 2: Provide an Official Business Address for your LLC
Whether it’s a home, an office building or any other physical location, every Alabama LLC must have a designated street address. It can be outside the state, but it cannot be a P.O. box.
Step 3: Assign a Registered Agent
A person who receives official legal and tax correspondence and has responsibility for filing reports with the Alabama Secretary of State is called a Registered Agent. Every Alabama LLC is required to have a Registered Agent.
This position is official and can be filled by you, another manager in the business or a dedicated Registered Agent service. If your Alabama Registered Agent is a person they must reside at a physical street address in Alabama and be around during business hours to receive important documents for your company. In Alabama, you designate your Registered Agent when you file your Certificate of Formation and formally create your business.
All of Bizee’s packages include a Registered Agent service free for the first year and just $119 per year after that. We also have an online dashboard where you can log in and easily view any document that your Registered Agent has received on your behalf.
Step 4: File a Certificate of Formation with the Alabama Secretary of State
Once you've gathered all the information for your Alabama LLC, you’ll need to file a formal document with the Alabama Secretary of State. This document, known as “Certificate of Formation,” officially creates your LLC.
Here’s what is typically included:
You can file your Alabama Certificate of Formation online with the Secretary of State online business portal, mail a form to the Office of the Secretary of State or have Bizee do it on your behalf. The Alabama LLC filing fee is $200.
File by Mail
Alabama Secretary of State,
Attention: Business Entities Division
P.O. Box 5616
Montgomery, Alabama 36103
You only need to file your Certificate of Formation once, but every year after, you need to file an annual report. This is also something Bizee can remind you to do, or we can handle the paperwork for you.
Let Bizee Handle All the Paperwork for You for $0 + the Alabama State Fee
Form Your LLC Now for FreeWhat are the fees and requirements to form an Alabama LLC?
State Fee
$200*
State Filling Time
3 Weeks
Expedited Filling Time
1 Business Day
*includes online processing fees
Annual Report
Frequency
Annually
Due Date
Annual Year: April 15th Fiscal Year: 3½ months after beginning of tax year
Note
LLCs elected to be taxed as corporations follow corporation rules.
Step 5: Get an Employer Identification Number (EIN) from the Internal Revenue Service
To identify your business to the IRS, you’ll need an EIN. This number is used when you file and pay taxes and submit payroll information and payments for your employees. An EIN is also required to open a business bank account. You can obtain one directly from the IRS, or Bizee can get one for you as part of the Alabama LLC formation process.
Step 6: Create an Operating Agreement
A type of "instruction manual,” this document explains how you'll run your business. An LLC Operating Agreement details how decisions will be made, how the business is divided among members and what will happen if a member leaves the company.
Some states require that a company have an Operating Agreement in place. You're not legally required to have an Alabama Operating Agreement, but it’s a good idea to have one to protect your business from any future changes and events.
Receive a Personalized Operating Agreement When You Select Bizee’s Gold or Platinum Package
Form Your LLC Now
Other Alabama LLC Types
Professional LLC
Some states allow certain types of businesses to form Professional Limited Liability Companies (PLLCs). This type of LLC will typically require members to be licensed, and impose other specialized requirements as well.
Unlike what is available in other states, there is no Alabama PLLC option. Instead, Alabama law lets groups of licensed professionals form an Alabama professional corporation.
Learn more about PLLC vs. LLC and which one is right for your business.
Foreign LLC
If your business operates in another state and you want to expand into Texas — or vice versa — you’ll need to form a Foreign LLC.
Learn more about Alabama Foreign LLC registration.
Helpful Resources from the State of Alabama
More Information in This Guide
How to Name Your Alabama LLC
How to query the Alabama Secretary of State's business registry and search for the right name. Includes information on naming rules, trade names, reserving an Alabama LLC name and more.
Alabama Registered Agents
How to appoint, change and search for a Registered Agent. Also includes the duties they fulfill and the rules they’re required to follow.
Alabama LLC Fees and Requirements
Details the various fees you’ll need to pay, and the state and federal requirements you’ll need to meet. Includes information about Employer Identification Numbers (EINs), state and federal business licenses, public information reports and more.
Alabama Business Taxes
Covers the various taxes you’ll have to pay to the state and federal governments. Includes details about state taxes such as sales and franchise, and federal taxes such as income and self-employment.
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