How Much Does It Cost to Start an LLC in Alabama?
Keeping your business legally registered and in good standing involves some necessary expenses. Some of these payments are due to the Alabama Secretary of State, while others are owed to the federal or state government. We’ve summarized the most common requirements and fees here.
Note that Alabama business license and permit fees may need to be owed right when you form your business, on an ongoing schedule or on an ad hoc basis. Find more details below.
Initial Alabama LLC Fees
When you first create your business, you’ll need to file as an LLC with the Secretary of State and pay a fee. Here are the current Alabama LLC fees and filing times:
When you form through Incfile, we collect this fee from you and forward it to the Alabama Secretary of State when we file your formation paperwork.
Employer Identification Number
Every LLC in the U.S. should secure a unique Employer Identification Number (EIN). This number is issued by the Internal Revenue Service, and you use it when you file taxes, open a business bank account and pay employees. You can get one yourself at no cost from the IRS, or have Incfile do it for you.
Foreign Qualification to Operate in Alabama From an Outside State
If you’re thinking about expanding your LLC beyond the borders of your home state, you’ll need a Foreign Qualification or Certificate of Authority to operate in Alabama. These are typically necessary if you want to have a physical presence, employees or want to bank in Alabama. You’ll also need to complete the Foreign Limited Liability Company Application for Registration and pay a $150 filing fee. Incfile provides complete Foreign Qualification service for Alabama.
Annual Report Requirements
Alabama is like most states, and requires businesses to file an annual (or other periodic) report with the Secretary of State. In Alabama, this amount is determined based on the total amount of income passed through to the LLC members — with a minimum of $100.
Annual Year: April 15th Fiscal Year: 3½ months after beginning of tax year
LLCs elected to be taxed as corporations follow corporation rules.
Alabama Business Licenses and Permits
As a business owner, it’s your responsibility to make sure you have the proper state, federal or local business licenses to operate your LLC. Some of the associated fees only need to be paid once, while others are ongoing charges.
Permits and licenses vary based on:
Alabama does not require you to have an Operating Agreement for your LLC.
An Operating Agreement is a document that covers how the business will be run, how managers and members are chosen, rights and duties of members and several other key areas.
This document can be extremely helpful in making sure you’re organized and prepared for any future events that may affect your business.
You can make changes to the template based on your unique requirements.
Other Potential LLC Fees or Requirements in Alabama
There are several other fees or requirements that you may need to pay or meet during the life of your Alabama LLC. These ad hoc fees will only be payable in specific circumstances, which we’ve listed below.
Reserving a Name for Your LLC
If you don’t want to form your LLC right away, you can reserve a business name for one year with the Alabama Secretary of State for a fee of $25. First, perform an Alabama business search and learn about rules pertaining to business names to ensure the name you choose meets all state requirements.
Amending Certain Facts About Your LLC
Your business formation documents state certain facts about your Alabama business when it was originally formed. Over time, these facts may change. If they do, you need to file Articles of Amendment and pay a $100 fee. You can do this yourself or have Incfile complete the filing on your behalf.
Getting a Alabama Certificate of Compliance
Some organizations will request that you prove your LLC’s compliance with laws and tax requirements. If you need to prove you have met your commitments, you’ll need a Certificate of Compliance from the Alabama Secretary of State.
The fees listed above detail many of the charges a standard LLC will be required to pay in Alabama. In some unusual circumstances, there may be other one-off, periodic or ad hoc fees not listed above.
Of course, your LLC will also likely need to pay self-employment, payroll, federal, state and sales taxes. More information about taxes can be found on the Alabama Business Taxes page.