How to Start an LLC in Alabama (2026)

Q: How much does it cost to start an LLC in Alabama?

Budget $225. The Certificate of Formation is $200 with the Secretary of State, and Alabama also requires a $25 Certificate of Name Reservation before you can file. Your EIN is free from the IRS. After that there is no Secretary of State annual report for an LLC.

Q: Do I have to reserve my LLC name in Alabama?

Yes. Alabama is one of the very few states where this is mandatory. Ala. Code 10A-1-4.02(f) requires you to obtain a Certificate of Name Reservation before submitting your formation documents, and it costs $25. Filing the Certificate of Formation without it will not work.

Q: Does an Alabama LLC file an annual report?

Not with the Secretary of State. The recurring obligation is the Business Privilege Tax with the Department of Revenue, and even that eased for small businesses: for tax years beginning after December 31, 2023, taxpayers whose calculated privilege tax is $100 or less are not required to file the return at all.

Q: Did Alabama get rid of the minimum business privilege tax?

Effectively, for small businesses. Alabama phased down the minimum and, for tax years beginning after December 31, 2023, taxpayers whose business privilege tax calculates to $100 or less do not have to file the return. Older guides still describe a $100 minimum every year, which is out of date. Confirm your own situation with an Alabama tax professional.

Last updated: August 28, 2026

To start an Alabama LLC, reserve your business name with the Secretary of State for $25 first (Alabama requires the name reservation certificate before you file), then file the Certificate of Formation for $200 and get a free EIN. Budget $225 to start. Alabama LLCs file no Secretary of State annual report, and since 2024 there is no Business Privilege Tax return to file when the calculated tax is $100 or less.

Quick note: we're operators, not attorneys or accountants. This is general educational info, not legal or tax advice. Alabama changed its Business Privilege Tax rules in 2024, so older guides overstate the yearly cost.

Alabama has one requirement almost no other state has, and it stops filings dead if you miss it. Get that right and the state is cheap to maintain. Here is the whole process in plain English, written for people starting something real like a courier route.

Alabama makes you reserve the name before you can file Under Ala. Code 10A-1-4.02(f), you must obtain a Certificate of Name Reservation before submitting your formation documents. It costs $25 and is a separate step, not part of the $200 filing. Most state guides skip this, which is why people show up with $200 and get their Certificate of Formation rejected. Reserve first, file second.

How to start a Alabama LLC in 6 steps

Reserve the name ($25), appoint an Alabama registered agent, file the Certificate of Formation ($200), write an operating agreement, get a free EIN, then check whether you owe any Business Privilege Tax.

Reserve your Alabama LLC name first

This is step one in Alabama, not an optional extra. Search availability in the Alabama business entity search, then obtain a Certificate of Name Reservation for $25. Your name must include "Limited Liability Company," "L.L.C." or "LLC." You cannot file the formation documents without the reservation certificate.

Appoint an Alabama registered agent

You need a registered agent with a physical Alabama street address available during business hours. Choose carefully: Alabama charges $100 to change your registered agent or office later, which is one of the higher change fees in the country. Northwest includes agent service free the first year with their $39 filing.

File the Certificate of Formation

File the original and one copy of the Certificate of Formation with the Alabama Secretary of State, along with your name reservation certificate. The fee is $200. Alabama once routed these filings through the county Probate Judge; today the Secretary of State is the filing office.

Write an operating agreement

Alabama does not require one, but write it anyway. It sets out ownership, management, and signing authority, it backs up your liability protection, and banks generally ask for it when you open the business account. A simple template covers a single-owner courier business.

Get a free EIN from the IRS

Your EIN is free at irs.gov and takes about ten minutes. You need it for the business bank account, contracts, and hiring. Never pay a third-party site for one.

Check your Business Privilege Tax position (no annual report)

Alabama LLCs file no annual report with the Secretary of State. The recurring item is the Business Privilege Tax, and this changed in your favour: for tax years beginning after December 31, 2023, taxpayers whose privilege tax calculates to $100 or less are not required to file the return. Most new single-owner LLCs land there, but confirm your own position with an Alabama tax pro.

Alabama LLC cost breakdown

$225 to start ($25 name reservation plus $200 filing), and for most small LLCs nothing recurring at the state.

Item	Cost	Required?
Certificate of Name Reservation (required first)	$25	Yes
Certificate of Formation	$200	Yes
Total to form	$225	Yes
EIN	Free from the IRS	Yes (free)
Registered agent service	$0 (yourself) to $300/yr	No
Secretary of State annual report	None for LLCs	No
Business Privilege Tax return	Not required when tax is $100 or less	Depends
Change of registered agent or office	$100	Only if changing

Alabama figures as of August 2026, from the Secretary of State Fee Schedule and the Department of Revenue Business Privilege Tax page. County probate or local business licence fees can apply separately. Confirm before filing.

Rather have it filed for you? Northwest will form your Alabama LLC for $39 + the $200 state fee and act as your registered agent the first year, keeping your home address off the public record. See the $39 formation service → Affiliate link. We may earn a commission at no extra cost to you.

Setting up to run courier routes in Alabama?

The LLC is step one. Our course covers the rest: insurance and certifications, the business bank account, and how to find routes and win contracts with Alabama clinics, labs, and hospitals.

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Alabama LLC FAQs

How much does it cost to start an LLC in Alabama?

Budget $225: a $25 name reservation, which Alabama requires first, plus the $200 Certificate of Formation. Your EIN is free and there is no annual report.

Do I have to reserve my LLC name in Alabama?

Yes. Ala. Code 10A-1-4.02(f) requires a Certificate of Name Reservation, $25, before you file the Certificate of Formation. Alabama is unusual in this.

Does an Alabama LLC file an annual report?

No Secretary of State annual report. The Business Privilege Tax return is not required when the calculated tax is $100 or less, which covers most small LLCs.

Did Alabama get rid of the minimum business privilege tax?

For small businesses, yes. Since tax years beginning after December 31, 2023, no return is required when the calculated tax is $100 or less. Older guides still quote a $100 minimum.

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