How much does an LLC cost in Alabama? (details)

Forming an Alabama LLC entails more than just paying the first filing fee, but it doesn't have to be extremely expensive.

We outline all up-front and continuing costs for an Alabama LLC and provide advice on how to successfully cut these out of the budget.

How Much Does It Cost to Start an LLC in Alabama?

There is a $200 filing fee for the Certificate of Formation with the Secretary of State when forming an LLC in Alabama.

This is an important step in creating your LLC's legal standing, which will allow it to function under Alabama's regulations if approved.

Apart from the LLC filing fee mentioned above, additional expenses are associated with establishing an Alabama LLC (Limited Liability Company).

Costs of Forming an Alabama LLC

Forming an Alabama LLC includes a one-time state filing fee of $200.

Ongoing fees such as a minimum $50 Business Privilege Tax are also part of the process, as detailed below.

LLC Costs in Alabama

The filing fee for an Alabama LLC Certificate of Formation is $200

In Alabama, forming an LLC requires paying the Secretary of State a $200 filing fee for the Alabama Certificate of Formation. This paper creates your LLC legally if it is accepted.

After formation, you only need to pay the $200 one-time charge; after that, you won't need to pay any more monthly or yearly fees to keep your Alabama LLC active.

The form used to establish an LLC can vary by state; it may be referred to as the Certificate of Formation, Certificate of Organization, or Articles of Organization.

In Alabama, it is specifically known as the Certificate of Formation. Despite these variations in naming, they all serve the same purpose: to legally create your LLC.

Reserving a business name in Alabama entails a fee of $28

The creation of your Alabama LLC Name Reservation is completed simultaneously if you want to file online. An additional $28 filing fee is required for an online name reservation when filing online.

If you want to file by mail, remember to include the Name Reservation with your application. Alabama Business Name Reservations can be made by mail for a charge of $25.

But before forming your LLC, you have to wait for the Name Reservation to be approved. Even though filing by mail can save you a few bucks, it can take longer to form your LLC.

How much does a DBA cost? ($30)

In Alabama, filing a DBA with the Secretary of State online costs $30.

Alabama Registered Agent Fee ($0 to $125/ annually)

Under Alabama law, every LLC formation requires the appointment of a Registered Agent.

Your Alabama Registered Agent acts as the liaison for legal documents and state notifications on behalf of your LLC, necessitating a physical address within the state and availability during regular business hours.

You can appoint yourself, a trusted associate, or a family member as your Registered Agent without incurring additional expenses.

Alternatively, hiring a Registered Agent service costs between $100 and $300 per year. These services offer additional business support and safeguard your privacy.

Hiring a Registered Agent service is a good idea if:

• You lack a physical address in the state (Alabama law mandates Registered Agents to have an address within the state).
• You prefer to keep your personal address private (some companies allow you to use their address for confidentiality).

LLC Operating Agreement Fee ($0)

An Alabama LLC Operating Agreement functions as a written contract among the LLC's members. It outlines specific details regarding ownership, how the LLC is managed, and the distribution of profits.

Both Single-Member and Multi-Member LLCs should create an Operating Agreement, maintain it within their business records, and provide each member with a copy.

Online services generally charge between $50 and $200 for crafting an LLC Operating Agreement.

LLC EIN Number Fee ($0)

An EIN, also referred to as an Employer Identification Number or FEIN (Federal Employer Identification Number), is essential for handling tax filings, setting up an LLC bank account, and potentially facilitating employee hiring.

While some platforms may charge a fee, you can obtain an EIN for your LLC free of charge directly from the IRS. The process to apply online is simple and typically takes only a few minutes to complete.

Alabama LLC Annual Report ($50/year or more)

By filing the Alabama Business Privilege Tax Return and Annual Report to the Alabama Department of Revenue, Alabama requires you to keep your LLCs information up to date.

By doing this, you can be sure that your Alabama LLC will continue to operate legally and in compliance with state laws. Simply verify the details on the Annual Report, submit it to the Alabama Department of Revenue, and settle the tax amount specified on your LLC’s Business Privilege Tax Return.

The cost of the Alabama LLC Annual Report starts at $50 annually. While the minimum tax due is $50, the actual payment varies based on your LLC’s federal tax return. This Annual Business Privilege Tax obligation recurs yearly throughout the life of your LLC.

Alabama Business License and Permit Fees

The locations and industry sectors in which your LLC operates in Alabama may require you to apply for additional business licenses or permits. For your LLC's specific operating area, for example, it may be necessary to obtain a city business permit.

Location and industry specifics can affect the cost of these licenses or permits. These costs are usually fair. Local governments such as towns, cities or counties are responsible for administering some licenses and permits, while the state issues others.

LLC Taxes

Alabama LLC owners face a range of tax obligations, leading to varying annual costs.

Some of the taxes LLC owners pay include:

• Federal taxes
• State income tax
• Local income tax
• Business taxes
• Self-employment taxes
• Sales and use tax
• Payroll tax (if you have employees)
• Property tax (if the LLC owns property)

The Taxes of Your Alabama LLC taxes are affected by your industry and business activities, making it difficult to predict. Every business is different, and the taxes your LLC owes depend on your specific situation.

Hiring an Accountant

Accounting fees can vary, but in general, expect to pay about $300 a year for basic tax returns and up to $900 for more comprehensive filings.
The best person to help you determine your small business tax liability in Alabama is a certified accountant.

While accounting costs can vary, you should generally budget $300 for simple tax returns and up to $900 for more complicated filings annually.

Alabama Secretary of State

If you have questions about the costs involved in starting an Alabama LLC, feel free to contact the Alabama Secretary of State's Business Services Division.

Alabama LLC Costs FAQs