How to Start an LLC
in Alabama
Everything you need to know: $200 Secretary of State fee, $50 county probate fee, 1–3 day processing, Business Privilege Tax explained. File it yourself or let Eleet AI handle both state and county filings for $395 all-inclusive.
Alabama LLC at a Glance
7 Steps to Form an Alabama LLC
Choose and reserve your LLC name
Your Alabama LLC name must be distinguishable from every other entity on file with the Secretary of State and must include "Limited Liability Company", "LLC", or "L.L.C." Check availability at the Alabama SOS business entity search.
Alabama-specific: Unlike most states, Alabama requires you to file a Name Reservation Request (Form SOSLLC-2) before filing the Certificate of Formation. The name reservation costs $25 and holds the name for 1 year. This is a two-step process that confuses a lot of first-time filers. Eleet AI handles both the name reservation and the formation filing as a single package.
Designate an Alabama registered agent
Every Alabama LLC must have a registered agent with a physical street address in Alabama (no P.O. boxes). The registered agent receives legal documents, state correspondence, and Alabama Department of Revenue notices. The agent's county determines which county probate judge receives your formation filing in Step 4.
You can serve as your own registered agent if you have an Alabama address and are available during business hours. However, most owners use a professional service to keep their home address off public records. Eleet AI's registered agent service is uses a licensed Alabama in-state address — we handle both the state filing and the required county probate filing in one transaction.
File the Certificate of Formation (Form SOSLLC-1)
The Certificate of Formation is the official document that creates your Alabama LLC. File it online through the Alabama SOS online portal or by mail.
The form requires: your LLC name (matching your reservation), registered agent name and physical Alabama address, organizer name and address, LLC duration (usually "perpetual"), and the purpose of the LLC. The Secretary of State fee is $200, payable by credit card (online) or check (mail).
Tip: Alabama charges an extra $100 to file the Certificate of Formation expedited (1 business day instead of 2–3). Most small LLCs don't need this — standard processing through the online portal is already fast.
File with the county probate judge
This is the step that trips up almost every first-time Alabama LLC filer. After the Secretary of State approves your Certificate of Formation, you must also file a stamped copy with the county probate judge in the county where your registered agent is located.
The county probate filing fee is typically $50 (varies by county — $40 in some rural counties, up to $100 in larger urban counties like Jefferson or Madison). Until the probate judge stamps the filing, your LLC is not fully formed and cannot legally operate.
Common mistake: New filers forget to complete the county probate filing and wonder why their LLC doesn't appear as "active" in the Alabama SOS database. If you file only with the Secretary of State, your LLC exists on paper but hasn't satisfied Alabama's formation requirement.
Create an operating agreement
Alabama does not legally require an operating agreement, but you should have one. This internal document defines: ownership percentages, profit and loss distribution, voting rights and decision-making procedures, what happens when a member leaves or dies, and how the LLC can be dissolved.
Banks typically require an operating agreement before opening a business account. It also strengthens your liability protection by demonstrating that your LLC operates as a separate entity from your personal affairs. Eleet AI offers a state-specific Alabama operating agreement template for $99.
Get an EIN from the IRS
An Employer Identification Number (EIN) is your LLC's federal tax ID. You need it to open a business bank account, file taxes, register for Alabama Business Privilege Tax, and hire employees. Apply for free at IRS.gov — it takes about 5 minutes and you receive your EIN immediately.
Warning: Some formation services charge $70–$99 for EIN filing. The IRS provides this for free. Eleet AI offers it as an optional $49 add-on for those who prefer we handle it, but we always tell you that you can do it yourself at no cost.
Register for and file Business Privilege Tax
Every Alabama LLC must file an annual Business Privilege Tax return with the Alabama Department of Revenue. Two filings to remember:
- 1. Initial Business Privilege Tax (Form BPT-IN) — Due within 2.5 months of formation. Minimum $100.
- 2. Annual Business Privilege Tax (Form PPT) — Due March 15 each subsequent year (or 2.5 months after your LLC's fiscal year-end). Minimum $100, scaled by net worth.
Note: Alabama does not require a separate Annual Report — the Business Privilege Tax return doubles as your annual compliance filing. Register your LLC and file returns through the My Alabama Taxes (MAT) portal.
Alabama LLC Cost Breakdown
What you'll actually pay — no surprise fees, no hidden add-ons.
| Item | DIY Cost | Eleet AI |
|---|---|---|
| Name reservation (Form SOSLLC-2) | $25 | Included |
| State filing fee (Certificate of Formation) | $200 | Included |
| County probate judge filing fee | ~$50 | Included |
| Formation service fee | $0 (you do it) | Included |
| Registered agent (first year) | $0 (if you serve) / $125+ | Included |
| EIN application | Free (IRS.gov) | $49 optional |
| Total | $275–$525+ | $395 |
Eleet AI's $395 includes everything: name reservation, Secretary of State filing, county probate filing, and first-year registered agent. No upsells, no hidden fees.
Why Form an LLC in Alabama?
Low formation costs
Alabama's $250 total state+county fee is among the lowest in the Southeast. Compare to California ($70 filing + $800 minimum franchise tax) or Tennessee ($300 filing + annual franchise tax).
Reasonable annual tax
The Business Privilege Tax minimum is $100/year — not great, not terrible. It scales with net worth, so small LLCs stay at the minimum. No separate Annual Report filing to track.
Business-friendly courts
Alabama courts have a well-developed body of LLC case law under the 2014 Alabama LLC Act (Title 10A, Chapter 5A). Clear statutory rules on member liability, dissolution, and manager authority.
Home-state simplicity
If you live or do business in Alabama, forming your LLC here avoids "foreign qualification" fees, dual state filings, and dual registered agent requirements. Keep it simple — form where you operate.
Alabama LLC — Common Questions
How much does it cost to start an LLC in Alabama?
Alabama has a two-part state filing: $200 to the Secretary of State for the Certificate of Formation plus a $50 county probate judge filing fee (varies slightly by county). That's $250 in mandatory state fees — Alabama is unusual in requiring county-level filing in addition to state filing. Eleet AI charges $395 all-inclusive (state + county fees, formation filing, and first-year registered agent service). National services like LegalZoom charge $0–$249 for formation but add the $250 state/county fees, registered agent ($125–$299/yr), and upsells separately — real total is typically $500–$900+.
How long does it take to form an LLC in Alabama?
Online filings through the Alabama Secretary of State's online portal are typically processed in 1–3 business days. Mail filings take 2–3 weeks because they also route through the county probate judge. Expedited processing is available for an additional fee. Eleet AI handles both the state and county filings together, and typical turnaround is 2–5 business days end to end (including county probate receipt).
What is the Alabama Business Privilege Tax?
Every Alabama LLC must file an annual Business Privilege Tax return (Form BPT-IN for the initial return, Form PPT for subsequent years) with the Alabama Department of Revenue. The minimum tax is $100/year, scaled upward based on the LLC's net worth. The return is due 2.5 months after the end of your LLC's tax year (March 15 for calendar-year filers). There is no separate Annual Report — the Business Privilege Tax return doubles as the state's annual compliance filing.
Do I need a registered agent in Alabama?
Yes. Every Alabama LLC must designate a registered agent with a physical street address in Alabama (no P.O. boxes). The registered agent receives service of process, state correspondence, and official legal notices. Alabama is strict about registered-agent address accuracy — a bad or outdated address is a common reason LLCs get administratively dissolved. You can serve as your own registered agent, but most owners use a professional service for privacy and reliability. Eleet AI provides a licensed Alabama registered agent and includes first-year registered agent service with every Alabama LLC formation.
Why does Alabama require county probate filing?
Alabama is one of only a few states that requires LLC formation documents to be filed with both the Secretary of State and the county probate judge in the county where the registered agent is located. This is a historical holdover from Alabama's original corporate code. The county probate filing fee is typically $50 (varies slightly by county — $40 in some rural counties, up to $100 in others). Your LLC is not legally formed until both filings are complete and the county probate certificate is issued.
Can I form an Alabama LLC if I don't live in Alabama?
Yes. Alabama does not require LLC members or managers to be Alabama residents. You can form an Alabama LLC from any state or country. You will need a registered agent with a physical Alabama address — this is where the county probate filing will be routed. Eleet AI provides a licensed Alabama registered agent and handles both the state and county filings on your behalf.
What is a Certificate of Formation in Alabama?
The Certificate of Formation (Form SOSLLC-1) is the official document filed with the Alabama Secretary of State to create your LLC. It includes: your LLC name (must include "Limited Liability Company", "LLC", or "L.L.C."), registered agent name and physical Alabama address, organizer information, and the LLC's duration (typically "perpetual"). Once approved by the Secretary of State and filed with the county probate judge, you receive two stamped certificates — both are required as proof of formation.
What do I need to do after forming my Alabama LLC?
After both the Secretary of State and county probate judge have stamped your formation documents: (1) Apply for an EIN at IRS.gov (free, takes 5 minutes online), (2) Register for Alabama Business Privilege Tax via My Alabama Taxes (MAT) portal — the initial return (Form BPT-IN) is due within 2.5 months of formation, (3) Open a business bank account using your EIN and both stamped certificates, (4) Draft an operating agreement defining member roles, profit distribution, and decision-making, (5) Check whether your industry requires an Alabama business license (most counties and cities also require a local business license). Mark March 15 on your calendar for the annual Business Privilege Tax return.
Is Alabama a good state to form an LLC in?
Alabama is a solid choice if you live or do business in Alabama. It has low formation fees ($250 total state+county vs $800+ in states like California), a reasonable Business Privilege Tax ($100 minimum), and a business-friendly regulatory environment. However, if you do not live or operate in Alabama, forming your LLC in your home state is usually better — forming out-of-state triggers "foreign qualification" requirements that can double your compliance costs. Use "best state for LLC" considerations (Delaware, Wyoming, Nevada) only if you have a specific legal or tax reason to do so.
Ready to start your Alabama LLC?
$395 covers everything — name reservation, state filing, county probate filing, and first-year registered agent. No hidden fees.
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