LLC Cost in Alabama – How Much to Pay for an LLC


Steve Goldstein
Steve Goldstein
Business Formation Expert
Steve Goldstein runs LLCBuddy, helping entrepreneurs set up their LLCs easily. He offers clear guides, articles, and FAQs to simplify the process. His team keeps everything accurate and current, focusing on state rules, registered agents, and compliance. Steve’s passion for helping businesses grow makes LLCBuddy a go-to resource for starting and managing an LLC.

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Perhaps you are hoping to form an LLC in Alabama. People assume that starting an LLC is difficult and costly. However, it’s generally easy, and the cost would vary across states. We have all the info you need to know about the cost of forming an LLC, particularly the LLC cost in Alabama.

Alabama LLC Cost of Filing

Here are the costs involved in forming an LLC in Alabama.

Cost of Filing Formation Certificates

The Alabama Certificate of Formation is responsible for the majority of the cost, which also varies depending on whether you’re forming a domestic LLC or a foreign LLC. Still, you can file both at the Alabama Secretary of State.

Alabama Domestic LLC

  • Online Filing costs $208.
  • By Mail: Fill out the application form, and send it to Secretary of State Business Services, P.O. Box 5616, Montgomery, Alabama 36103-5616. Costs $200.

Alabama Foreign LLC

  • Online Filing costs $156.
  • By Mail: Fill out the application form, and send it to Secretary of State Business Services, P.O. Box 5616, Montgomery, Alabama 36103-5616. Costs $150.

Note that filing online is ideal, not only because you need to go to the Secretary of State office, but also it would be faster. You won’t have to wait in a queue in doing so.

Alabama LLC Formation Service or Registered Agent Fee

You need a registered agent to form an LLC in Alabama, hence, added costs for service fees. Here are three of the best LLC services on our list.

LLC Service

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Business Permits and Licenses

Business licenses are renewed yearly and depend on your business activity and location, so the cost will vary. Check the Alabama Department of Revenue for regulatory boards or agencies requiring licensing.

Alabama Business Privilege Tax and Annual Report

Once you have your EIN or Employer Identification Number, apart from filing sales tax, the company needs to pay the Business Privilege Tax (BPT) after 2.5 months as an LLC in Alabama. This is a requirement for all LLCs formed in Alabama.

All LLCs need to pay their taxes before the third week of April and it can vary from 0.00025% to 0.000175%, depending on the net worth of the LLC. The exact rate will be obtained based on the entity’s taxable income in the previous year. The minimum amount that the business will have to pay for this tax is $100.

Cost Comparison Among States

Money is needed to operate a company. Also, when forming an LLC, you need to pay some filing fees and other costs like those for the certificate of formation, registered agent, name reservation, and forming a foreign LLC.

Still, every state will have different costs related to forming an LLC. Suppose you are deciding where to form your LLC, it helps to compare costs. Here’s a sample table comparing costs among states to help you decide where to set up our LLC.

StatesAlabamaTennesseeGeorgiaMississippiNorth Carolina
Online filing fee$200$300$100 for online and $110 for filing by mail$50$125
LLC Annual fee$100$300 minimum$50$200
Name reservation fee$25 for online and $28 for filing by mail$20 $25 for online and $35 for filing by mail$25 $30
Sales Tax4%7%4%7%4.75%

You can do further comparisons by checking out the costs in other states.

When it comes to having an LLC in Alabama, it won’t cost too much. Those who want to start an LLC in Alabama can go into the manufacturing sector or retail trade. Both these sectors are well known and contribute a great amount to the GDP too.

Other Costs

F.A.Qs

Can I start an LLC for free?

It is possible to form an LLC without professional help, but forms still have associated costs, regardless of where your LLC is formed.

Is an LLC expensive?

It is difficult to say whether forming an LLC is expensive. Nevertheless, the cost could be anywhere from $40 to $500. If you refuse to hire professionals, you’ll still have expenses like form fees to cover.

Does an LLC need a bank account?

The need to separate personal money from business funds, thus necessitating the creation of a business bank account for your LLC.

How Much Does It Cost to Maintain an LLC in Alabama

To maintain an LLC in Alabama you will need to pay an annual fee of $100 along with sales tax (4%), Business Privilege Tax and federal taxes.

The cost of maintaining an LLC in Alabama is an important consideration for business owners. While the upfront costs of forming an LLC may be relatively low, there are ongoing expenses that must be taken into account to keep the company in good standing.

One of the most significant costs associated with maintaining an LLC in Alabama is the annual report fee. All LLCs in the state are required to file an annual report with the Alabama Secretary of State’s office and pay a fee to keep the company in good standing. This annual report fee can vary depending on the state in which the LLC is formed.

In addition to the annual report fee, business owners must also consider the cost of hiring a registered agent for their LLC. A registered agent is responsible for receiving important legal documents on behalf of the company, and many business owners choose to hire a professional service to fulfill this role. The cost of hiring a registered agent can range from a few hundred to a few thousand dollars per year, depending on the complexity of the services provided.

Another cost to consider when maintaining an LLC in Alabama is the cost of any required business licenses and permits. Depending on the nature of the business, certain licenses or permits may be necessary to operate legally in the state. These costs can vary greatly depending on the industry and location of the business.

Finally, business owners must also consider the cost of maintaining proper records and compliance with state regulations. This may include keeping accurate financial records, holding annual meetings, and filing necessary tax forms. While these costs may not be as significant as some of the other expenses associated with maintaining an LLC, they are still important to consider when budgeting for the operation of a business.

Overall, the cost of maintaining an LLC in Alabama can vary depending on a variety of factors, including the size and nature of the business, as well as the services required to keep the company in good standing. While some of these costs may seem intimidating, it’s important for business owners to consider them carefully and budget accordingly to ensure the success and longevity of their LLC.

In Conclusion

The cost of Alabama is much lower compared to other forms of business. Apart from the state filing fees and annual taxes, you might bear the cost of the registered agent. Compare the price of professional LLC services and choose the most affordable one.

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