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Perhaps you are hoping to form an LLC in Alabama. People assume that starting an LLC is difficult and costly. However, it’s generally easy, and the cost would vary across states. We have all the info you need to know about the cost of forming an LLC, particularly the LLC cost in Alabama.
On this page, you’ll learn about the following:
Alabama LLC Cost of Filing
Here are the costs involved in forming an LLC in Alabama.
Cost of Filing Formation Certificates
The Alabama Certificate of Formation is responsible for the majority of the cost, which also varies depending on whether you’re forming a domestic LLC or a foreign LLC. Still, you can file both at the Alabama Secretary of State.
Alabama Domestic LLC
- Online Filing costs $208.
- By Mail: Fill out the application form, and send it to Secretary of State Business Services, P.O. Box 5616, Montgomery, Alabama 36103-5616. Costs $200.
Alabama Foreign LLC
- Online Filing costs $156.
- By Mail: Fill out the application form, and send it to Secretary of State Business Services, P.O. Box 5616, Montgomery, Alabama 36103-5616. Costs $150.
Note that filing online is ideal, not only because you need to go to the Secretary of State office, but also it would be faster. You won’t have to wait in a queue in doing so.
Alabama LLC Formation Service or Registered Agent Fee
You need a registered agent to form an LLC in Alabama, hence, added costs for service fees. Here are three of the best LLC services on our list.
LLC Service | Our Rating & Pricing | Top Features | Learn More |
#1 TOP PICK  | $0 + State Fees |
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Business Permits and Licenses
Business licenses are renewed yearly and depend on your business activity and location, so the cost will vary. Check the Alabama Department of Revenue for regulatory boards or agencies requiring licensing.
Alabama Business Privilege Tax and Annual Report
Once you have your EIN or Employer Identification Number, apart from filing sales tax, the company needs to pay the Business Privilege Tax (BPT) after 2.5 months as an LLC in Alabama. This is a requirement for all LLCs formed in Alabama.
All LLCs need to pay their taxes before the third week of April and it can vary from 0.00025% to 0.000175%, depending on the net worth of the LLC. The exact rate will be obtained based on the entity’s taxable income in the previous year. The minimum amount that the business will have to pay for this tax is $100.
Cost Comparison Among States
Money is needed to operate a company. Also, when forming an LLC, you need to pay some filing fees and other costs like those for the certificate of formation, registered agent, name reservation, and forming a foreign LLC.
Still, every state will have different costs related to forming an LLC. Suppose you are deciding where to form your LLC, it helps to compare costs. Here’s a sample table comparing costs among states to help you decide where to set up our LLC.
| States | Alabama | Tennessee | Georgia | Mississippi | North Carolina |
| Online filing fee | $200 | $300 | $100 for online and $110 for filing by mail | $50 | $125 |
| LLC Annual fee | $100 | $300 minimum | $50 | – | $200 |
| Name reservation fee | $25 for online and $28 for filing by mail | $20 | $25 for online and $35 for filing by mail | $25 | $30 |
| Sales Tax | 4% | 7% | 4% | 7% | 4.75% |
You can do further comparisons by checking out the costs in other states.
When it comes to having an LLC in Alabama, it won’t cost too much. Those who want to start an LLC in Alabama can go into the manufacturing sector or retail trade. Both these sectors are well known and contribute a great amount to the GDP too.
Other Costs
- Alabama Name Reservation: $28 for online filing or $25 by mail
- Doing Business As (DBA): $30 for online filing or $31.20 if filing by mail
- Certified Document Copies: $10 + $2 per page.
- Certified of Good Standing: $14
- Business Domain Name and Website: depend on your preference, but domain name could be as low as $2.99/yr at NameCheap, and web hosting is at least $30/mo at Kinsta.
- Online workspace: at least $4.20/mo for GSuite.
- Business Insurance: would vary depending on insurance type–whether general liability insurance or professional liability insurance–and coverage.
- Dissolution of Alabama LLC: $100
F.A.Qs
It is possible to form an LLC without professional help, but forms still have associated costs, regardless of where your LLC is formed.
It is difficult to say whether forming an LLC is expensive. Nevertheless, the cost could be anywhere from $40 to $500. If you refuse to hire professionals, you’ll still have expenses like form fees to cover.
The need to separate personal money from business funds, thus necessitating the creation of a business bank account for your LLC.
How Much Does It Cost to Maintain an LLC in Alabama
To maintain an LLC in Alabama you will need to pay an annual fee of $100 along with sales tax (4%), Business Privilege Tax and federal taxes.
One of the primary expenses of operating an LLC in Alabama is the annual reporting fee. Each year, LLCs are required to file a report with the Alabama Secretary of State’s office and pay a fee to maintain good standing. This fee is typically due on a specific date each year, and failing to pay it could result in penalties or even the dissolution of the LLC. Therefore, business owners must budget for this expense and mark the deadline on their calendar to avoid any issues.
In addition to the annual report fee, LLCs in Alabama are also subject to various taxes and fees. For example, LLCs may be required to pay state sales tax on products or services sold within the state. Moreover, if the LLC has employees, it must also pay state unemployment taxes as well as other payroll-related expenses. These costs can add up quickly, so it is crucial for business owners to account for them in their financial planning.
Another cost that LLC owners should consider is the cost of professional assistance. While it is possible to handle many aspects of LLC maintenance on your own, such as filing annual reports and paying taxes, some tasks may require the expertise of a lawyer, accountant, or other professional. For example, if the LLC is involved in a legal dispute or needs to restructure its ownership, it may be wise to seek legal advice. Likewise, having an accountant assist with tax planning and preparation can help minimize tax liabilities and ensure compliance with state laws.
Moreover, LLCs in Alabama may also incur various miscellaneous expenses throughout the year. These could include office rent, utilities, insurance, and other overhead costs. Business owners need to factor in these expenses when calculating the total cost of maintaining their LLC.
Overall, the cost of maintaining an LLC in Alabama can vary significantly depending on various factors, such as the size of the business, the industry it operates in, and the level of professional assistance required. Still, by carefully budgeting for annual fees, taxes, and other expenses, business owners can ensure that their LLC remains in good standing and compliant with state laws. It is crucial to stay informed about these costs and plan accordingly to avoid any financial surprises or legal issues down the road.
In Conclusion
The cost of Alabama is much lower compared to other forms of business. Apart from the state filing fees and annual taxes, you might bear the cost of the registered agent. Compare the price of professional LLC services and choose the most affordable one.