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.

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

  • Low cost to file ($200)

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.

 

How to Form an Alabama LLC Yourself in 6 Steps

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 Incfile’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

2

Provide an Official 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.

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 Incfile’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.

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:

  • Your business name and address
  • Details of your Registered Agent
  • Purpose of your business
  • Duration (can be perpetual or limited)
  • Provisions for the regulation of the internal affairs of the company
  • Names and addresses of managers or members of the LLC at the time of filing
  • Name of the organizer

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 Incfile 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 Incfile can remind you to do, or we can handle the paperwork for you.

Let Incfile Handle All the Paperwork for You for $0 + the Alabama State Fee

What are the fees and requirements to form an Alabama LLC

State Fee State Filing Time Expedited Filing Time
$236* 3 Weeks 2 Business Days
State Fee $236*
State Filing Time 3 Weeks
Expedited Filing Time 2 Business Days

*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.

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 Incfile can get one for you as part of the Alabama LLC formation process.

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 Incfile’s Gold or Platinum package

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 can 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

You’ll find plenty more insight and guidance on the other pages of this guide, including:

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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