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How do I form an LLC in Alabama?

Federal & State Law Editorial TeamLast reviewed: 2026-04-30

Alabama LLCs are governed by the Alabama Limited Liability Company Law of 2014, Ala. Code §§ 10A-5A-1.01 et seq.

1. Filing Fee and Processing Time — Two-Step Filing

  • Certificate of Formation: $200 filing fee with the Alabama Secretary of State (effective 2020 — previously the Probate Court filed first).
  • County Probate Court fee: Varies by county, typically $50-$100.
  • Processing: 1-3 business days online; longer by mail. Expedited service available for $100.

    • 2. Name Reservation

  • REQUIRED for Alabama LLCs (Ala. Code § 10A-1-5.10) — Alabama is one of the few states that requires a name reservation before filing the Certificate of Formation.
  • Name reservation fee: $28 online ($25 paper). Reserved for 1 year.
  • Name must include "Limited Liability Company," "LLC," or "L.L.C."

    • 3. Registered Agent

  • Required under Ala. Code § 10A-1-5.31.
  • Must be an Alabama resident individual OR an entity authorized to do business in Alabama, with an Alabama street address.

    • 4. Operating Agreement

  • Permitted but not required (Ala. Code § 10A-5A-1.08). Not filed with the state.
  • Recommended for multi-member LLCs.

    • 5. Business Privilege Tax & Annual Report

  • Required. Due April 15 each year (or 2.5 months after fiscal year-end).
  • Filed on Form PPT with the Alabama Department of Revenue (not the SOS).
  • Minimum tax: Was $100 prior to 2023; reduced to $50 for 2023; $0 minimum for tax periods beginning after Dec. 31, 2023 for entities owing less than $100 (Ala. Code § 40-14A-22).
  • Maximum tax: $15,000 for entities with high net worth.
  • Annual Report (informational) is filed with the BPT return.

    • 6. State Taxes

  • Alabama has a graduated individual income tax (top rate 5.0%) on pass-through LLC income.
  • LLCs taxed as C-corps pay 6.5% Alabama corporate income tax.
  • Sales tax (4% state + local up to 7.5%) registration if selling taxable goods.

    • 7. Federal EIN

  • Required for multi-member LLCs and any LLC with employees.

    • 8. Professional LLCs

  • Licensed professionals may form a Professional Limited Liability Company under Ala. Code § 10A-5A-11.01 et seq.

    • 9. Alabama Department of Revenue Registration

  • Register at My Alabama Taxes (MAT) for state tax accounts.

    • 10. Local Business Licenses

  • Alabama municipalities require business license fees that vary widely by city.

    • This is legal information, not legal advice.

    When to Talk to a Lawyer
    • You missed the mandatory name reservation step
    • Your LLC's net worth approaches the higher BPT brackets
    • You are a licensed professional forming a PLLC
    Related Statutes & Laws
    • Ala. Code § 10A-1-5.10
    • Ala. Code § 10A-1-5.31
    • Ala. Code § 10A-5A-1.08
    • Ala. Code § 10A-5A-2.01
    • Ala. Code § 40-14A-22

    This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.