Start Your Alabama LLC the Easy Way

Starting an LLC in Alabama is one of the best ways to make your business official, and protect your personal assets at the same time. Whether you’re launching a small shop in Birmingham, a startup in Huntsville, or a new service in Mobile, forming an LLC gives your business a solid foundation from day one.

An Alabama LLC is easy to set up, affordable to maintain, and offers peace of mind by keeping your business and personal finances separate. The process might sound complicated, but it doesn’t have to be. With Tailor, you can start your Alabama LLC online in just a few simple steps, we handle the paperwork while you focus on building your dream business.

Forming an LLC in Alabama isn’t just a legal requirement, it’s the first step toward turning your idea into something real.

Why Start an LLC in Alabama

Alabama is quickly becoming one of the most business-friendly states in the country. Entrepreneurs are drawn here for the low startup costs, flexible tax structure, and growing local economy. From the bustling innovation scene in Huntsville to the strong community support in smaller towns, Alabama offers plenty of room for small businesses to thrive.

Starting an LLC in Alabama also gives you limited liability protection, which means your personal assets, like your home or savings, stay safe if your business runs into legal or financial issues. You’ll also gain credibility, making it easier to open business bank accounts, secure funding, and build trust with customers.

And the best part? Forming your LLC in Alabama is straightforward. With Tailor, you can file your paperwork online, get your EIN, and start doing business faster than ever. We’ll walk you through each step so you can stay compliant, confident, and focused on growing your Alabama business.

How to start an Alabama LLC in 5 easy steps

You will need to follow these five steps to create your LLC in Alabama:

1. Choose and reserve a name your Alabama LLC
2. Choose a registered agent
3. File Certificate of Formation
4. Create an operating agreement
5. Apply for an EIN

Step 1: Choose a name for your LLC and reserve it

You can name your LLC almost anything you want in Alabama, as long as it complies with state rules. The name must include “Limited Liability Company,” “LLC,” or “L.L.C.” and must be distinguishable from any other registered business in the state. Unlike most states, Alabama requires you to reserve your business name before filing your LLC formation paperwork. This is a mandatory step. You’ll need to submit a Name Reservation Request to the Alabama Secretary of State and receive approval before moving forward with the Certificate of Formation. You can complete the name reservation online for a $28 fee or by mail for $25. The approved name reservation is valid for 1 year and must be included when you file your formation documents. To check if your desired name is available, conduct an Alabama business entity search: Visit the Alabama Secretary of State website, and from the homepage, click on the “Business Services” menu, then select “Business Entity and Name Search.” This will let you search to see if any other business in the state is already using the name you want.

Step 2: Choose a registered agent

According to the Alabama registered agent requirements, every business entity organized in the state must designate an individual or business to serve as their registered agent in Alabama. A registered agent’s main job is to receive service of process and other notices for the business. The registered agent’s location is known as their registered office. If someone sues your business, for example, the process server will deliver the papers to your Alabama registered agent.

A registered agent must be:

• An individual who resides in Alabama, or
• A business entity organized under Alabama law or registered to do business in Alabama

The registered office must be a street address in Alabama, not a P.O. box or other mailbox service, where the registered agent is available to receive service of process and other paperwork. It does not have to be a location where your LLC does business.

You or another member may serve as the registered agent of your LLC. You may use your business address or your personal address as the registered office. Keep in mind that the registered office is part of the public record.

Step 3: File certificate of formation

Now that you have decided on a name for your business and reserved it with the state, you are ready to file the documents that will officially create your LLC. In Alabama, the main document that creates an LLC is known as the “Certificate of Formation.” The person filing the Certificate of Formation is the “organizer.” This person could be an owner of the business, officially known as a “member” of the LLC, or an authorized representative.

State fees

The Alabama LLC cost is $236, which includes the $200 LLC state filing fee (for the Certificate of Formation), $25 name reservation fee, and $11 processing fee.

Requirements

The information that you will need for your Certificate of Formation includes:

• The name of your business, which must include “Limited Liability Company,” “L.L.C.,” or “LLC”​
• A copy of the Name Reservation Certificate that you filed with the SOS​
• The name and address of your registered agent in Alabama (see Step 3, below)​
• The name of the person who prepared the Certificate of Formation​
• The signature of the LLC’s organizer​

How to file

You may file the Certificate of Formation online or by mail. To file online, go to the “Business Services” section of the Alabama SOS website and click the “Domestic Formation” link. This will take you to the online submission page, where you can input the required information, upload documents like the Name Reservation Certificate, and pay the filing fee.

You can submit the Certificate of Formation by mail to the following address: Alabama Secretary of State, Business Services, P.O. Box 5616, Montgomery, AL 36103. You can pay the filing fee by check, money order, or credit card. In addition to the original Certificate of Formation, you should include a copy of the Certificate and a stamped, self-addressed envelope. The SOS will return the file-stamped copy and a receipt to you.

Step 4: Create an operating agreement

Alabama does not require LLCs to have written company agreements. Although you’re not required to get an Alabama LLC operating agreement in the state, having one can save you many future problems, so we consider it a must. An operating agreement may offer you more control over the way your business will be treated in case of dispute or legal action. Alabama does not set any specific requirements for the agreement although state law sets certain limits on what a company agreement can do, including:

• It cannot change the legal nature of the company as an LLC
• It cannot restrict the authority of a court over the company
• It cannot waive the obligations of the company or its members under contract law and consumer protection law

Step 5: Apply for an EIN

The IRS issues Employer Identification Number (EIN) to businesses and other organizations. Please note that this is different from the Entity ID Number issued by the Alabama SOS for your LLC. In addition to its role as an identification number for tax purposes, an EIN is required for many of your business operations, including opening a business bank account or applying for a business loan.

The IRS states that you must have an EIN if your LLC meets certain criteria, including if you have employees or if you operate your business as a corporation or partnership. Every LLC with more than one member will operate similar to a corporation or partnership, as discussed further below.

You can get an EIN by yourself online or by submitting Form SS-4 to the IRS by mail or fax. Doing it online is the most straightforward, and fastest, way of doing it. From Alabama, you can mail the Form SS-4 to the following address: Internal Revenue Service, Attn: EIN Operation, Cincinnati, OH 45999. You may also fax it to (855) 641-6935.

LLC Costs in Alabama

Starting an LLC in Alabama is relatively affordable compared to many other states. The main cost you’ll face is the Certificate of Formation filing fee, which is $200 when filed online through the Alabama Secretary of State. If you file by mail, expect to pay the same amount but allow extra processing time. Beyond that, you’ll need to budget for an annual Business Privilege Tax, which starts at $100, and may increase depending on your business income. Optional costs include hiring a registered agent (around $100 to $300 per year) and reserving your LLC name for $25 before filing. While these fees can vary slightly by county or service provider, understanding these upfront costs helps you plan and launch your Alabama LLC confidently.

Starting your Alabama LLC through an online service like Tailor Brands can simplify the process and ensure your paperwork is filed correctly the first time. Many new business owners choose this route to avoid delays, save time, and handle compliance requirements, especially when calculating total startup costs beyond just the filing fee.

How Long Does It Take to Form an LLC in Alabama

The time it takes to form an LLC in Alabama depends on how you file and the current processing times at the Secretary of State’s office. If you file online, your LLC is typically approved within 3 to 5 business days, making it the fastest option. Filing by mail, however, can take up to two to three weeks depending on postal delivery and workload. Keep in mind that incomplete applications or missing payments can delay the process, so double-check your forms before submission.

Many entrepreneurs use professional LLC formation services to speed things up and ensure accuracy. Once your Certificate of Formation is approved, you can move on to essential steps like getting an EIN, creating an operating agreement, and setting up your business bank account. By understanding how long each stage takes, you’ll have a clear timeline from application to official approval, so you can start doing business in Alabama without unnecessary setbacks.

Next Steps After Forming Your Alabama LLC

Create an Alabama LLC Operating Agreement

Once your Alabama LLC is approved, the first step is to create an operating agreement specifically for Alabama. While not required by Alabama law, this internal document is highly recommended. It outlines how your LLC will be managed, how profits are distributed, and what happens if a member leaves or the business dissolves. Having an operating agreement helps prevent disputes and shows your business operates as a legitimate entity, especially when opening a bank account or applying for financing. Even single-member LLCs in Alabama benefit from putting this agreement in writing.

Obtain Necessary Alabama Business Licenses and Permits

After filing your LLC, make sure you secure any business licenses and permits required to operate legally in Alabama. Most businesses must obtain an Alabama state business privilege license and, depending on your county, a local business license as well. Additional permits may apply based on your industry, for example, food service, health care, or retail businesses often need specific state or local approvals. You can verify requirements with your county probate office or the Alabama Department of Revenue to ensure full compliance before you begin operations.

Stay Compliant with Alabama LLC Ongoing Requirements

To keep your LLC in good standing, you’ll need to meet Alabama’s ongoing compliance requirements. The main one is filing the Alabama Business Privilege Tax return each year, with a minimum tax of $100, due 2.5 months after the start of your fiscal year. You’ll also need to maintain an active registered agent and renew any local licenses or permits annually. Missing these deadlines can result in penalties or even administrative dissolution. Staying on top of these obligations ensures your Alabama LLC remains legally protected and in good standing with the state.

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