Alabama LLC Cost: Filing Fee, Annual Fees and 5-Year Total
Forming an LLC in Alabama costs $200 in state filing fees and has no recurring state fee in our data. Alabama's estimated five-year state costs of $225 are 33% below the 51-jurisdiction median of $335.
Checked against official state sources (October 2026) · Last verified: October 29, 2026 · Sources
What an LLC costs in Alabama
| Item | Amount | Notes |
|---|---|---|
| Formation filing fee | $200 | One time |
| Recurring state filing / report fee | $0 | No fixed annual report fee; Business Privilege Tax is based on net worth and is exempt from filing at $100 or less |
| Extra due in year one | $25 | Required name reservation filed before the certificate |
| Year-one cost | $225 | Formation fee + any year-one extra |
| Estimated 5-year state costs | $225 | Formation + year-one extras + 4 years of filing / report fees; ranks 20th cheapest of 51 |
The five-year figure counts state government fees and, where one applies, the separate mandatory annual state tax shown above. It assumes a single-member LLC owned by an individual with little or no income. It excludes registered agent services, formation-service fees, publication costs, local business licenses, income-based state taxes (income, gross-receipts, B&O, sales) and any optional extras. How we calculate it.
Other state taxes (not in the totals)
Alabama's Business Privilege Tax applies to LLCs, but a single-member LLC whose calculated tax is $100 or less is exempt from filing and pays nothing. Entities with a larger net worth file Form PPT and pay the calculated tax. We count $0 for a small LLC.
Verified details
- Certificate of Formation: $200. A Certificate of Name Reservation ($25) must be obtained before filing.
- Alabama Business Privilege Tax applies to LLCs and is administered by the Department of Revenue. For tax years beginning after December 31, 2023, a calculated tax of $100 or less is exempt from filing. Larger LLCs file Form PPT on the same date as the federal return.
- A new LLC files Form BPT-IN within 2.5 months of organizing (no extension).
Annual reports and upkeep
Alabama filing cadence: Business Privilege Tax return (Revenue Dept.). No fixed annual report fee; Business Privilege Tax is based on net worth and is exempt from filing at $100 or less. Missing filings can lead to late fees and, eventually, administrative dissolution, so put the dates in a calendar. See annual reports and franchise taxes explained.
How to form an LLC in Alabama
- Check the name. Search the Alabama business records on the Secretary of State / filing office site to confirm your LLC name is available and includes an LLC designator.
- Pick a registered agent. Every state requires a registered agent with a physical street address in the state. You can serve as your own agent if you live in Alabama and are reachable during business hours, or hire a commercial agent. Registered agent guide.
- File the formation document. The state filing fee is $200. Use the state's online filing portal where available; paper filing is slower.
- Write an operating agreement. Most states do not require you to file one, but banks and partners typically ask for it, and it sets ownership and decision rules. Operating agreement basics.
- Get an EIN. The IRS issues EINs for free through its online application. Beware of sites that charge for it.
- Open a business bank account and calendar the deadlines. Put the business privilege tax return (revenue dept.) filing dates in a calendar so the LLC stays in good standing.
Want someone else to handle the filing in Alabama?
A formation service files the paperwork for a fee on top of the state fee and often includes a first year of registered agent service. It saves time, but you can file directly with the state for the state fee alone. Compare DIY and services.
See a formation service (partner link) Sponsored
Living or operating outside Alabama?
You can form an LLC in Alabama even if you live elsewhere, but if you actually do business in your home state you will usually also have to register the LLC there as a foreign LLC and pay that state's fees, so you may pay twice. In Texas, for example, an out-of-state LLC transacting business pays $750 to register. See forming an LLC in a state other than your own.
Compare Alabama with similar-cost states
| State | Formation | Annual | 5-yr total |
|---|---|---|---|
| Wisconsin | $130 | $25 | $230 |
| Oklahoma | $100 | $25 | $200 |
| West Virginia | $100 | $25 | $200 |
| Kansas | $85 | $45 | $265 |
Frequently asked questions
How much does it cost to start an LLC in Alabama?
The state filing fee is $200. Add a registered agent if you do not serve as your own, plus any local licenses.
What is the annual cost of an LLC in Alabama?
No fixed annual report fee; Business Privilege Tax is based on net worth and is exempt from filing at $100 or less. Other taxes or local fees may still apply.
Do I need a registered agent in Alabama?
Yes. Alabama requires every LLC to maintain a registered agent with a physical address in the state. You may act as your own agent if you meet the state's requirements.
Do I need an operating agreement in Alabama?
Most states do not make you file one, but you should have one. Check Alabama's LLC statute and ask your bank what it requires. We do not give legal advice.
Is Alabama cheap compared with other states?
Alabama's estimated five-year state costs of $225 are 33% below the 51-jurisdiction median of $335.
Sources
- Alabama official filing site: sos.alabama.gov
- AL SOS: LLCs
- AL SOS fee schedule (PDF)
- AL Revenue: Business Privilege Tax
- AL Dept. of Revenue: who is not required to file
Fees change. Confirm the amount on the state's official page before you file.
Fee data: official state government pages and statutes (checked October 28–29, 2026); sources are linked on each state page. See our methodology. Not legal or tax advice.