How to Form an LLC in Alabama (2026 Guide)

Step 1Pick a name and reserve it

Your LLC’s name has to include “Limited Liability Company,” “L.L.C.” or “LLC,” and it must be distinguishable from names already on the Secretary of State’s index (designators like “LLC” are ignored when comparing). Start with the Secretary of State’s business entity records search to see what is already taken.

Some words trigger extra paperwork. A banking name needs a letter from the Alabama Banking Commissioner’s Office, an insurance name needs one from the Alabama Insurance Commissioner’s Office, and names that suggest a licensed profession (such as engineering, architecture, law or medicine) need a copy of an Alabama license or a letter from the licensing agency.

Once you have a name, reserve it. In Alabama this is not optional: the Certificate of Formation asks you to attach a copy of the Name Reservation Certificate. A mailed request costs $25. Online, the fee for non-subscribers is $28 by credit card, and you print the certificate immediately rather than waiting for mail.

Step 2Name a registered agent

The registered agent is the person or company that accepts legal papers and official notices for the LLC. Alabama’s form allows only one agent. You must give a street address for the registered office in Alabama (a PO box is not accepted) and the county where it sits. If the agent’s mailing address is different, you add an Alabama mailing address too. You can serve as your own agent if you have an Alabama street address, or you can hire a commercial agent.

Step 3File the Certificate of Formation

The Certificate of Formation is short. It asks for:

• the LLC’s name, plus the attached name reservation;
• the registered agent’s name, Alabama street address, county and (if different) mailing address;
• a certification that the LLC has at least one member;
• whether it is a series, professional or nonprofit LLC, if any of those apply;
• an optional delayed effective date (no later than 90 days after signing);
• the organizer’s signature, plus the name and address of whoever prepared the form.

The fee is $200. The form states it can be filed online through the Secretary of State’s Online Services. To file on paper, type the form (handwritten forms are returned), and mail two copies with a self-addressed stamped envelope to Secretary of State, Business Services, P.O. Box 5616, Montgomery, AL 36103. Email is not accepted. You can pay by check, money order or card; card payments may carry a convenience fee of 3% of the total plus $2.00.

Alabama does not publish a processing time or an expedited service for LLC formations, so build in some slack if you need the LLC by a set date.

Step 4Handle the Business Privilege Tax

Alabama LLCs do not file an annual report with the Secretary of State. Since January 1, 2024, that report is only for for-profit and professional corporations. The ongoing state obligation is the Business Privilege Tax, administered by the Alabama Department of Revenue.

The initial return. A newly formed LLC files an initial return (Form BPT-IN) within two and one-half months after the date of qualification, but only if the tax comes to more than $100.

Annual returns. After that, LLCs taxed as partnerships and single-member LLCs that are disregarded for federal purposes file Form PPT; an LLC that elects to be taxed as a corporation files Form CPT. The return is due on the same date as the matching federal income tax return, and payment is due by that original date even if you extend.

The $100 exemption. The tax has a $100 minimum on paper, but under Act 2022-252, if your tax would be $100 or less, you have no filing requirement at all. Larger LLCs pay a rate based on their Alabama net worth, capped at $15,000.

If you miss it. A late return costs 10% of the tax or $50, whichever is greater. Late payment adds 1% of the unpaid tax per month (up to 25%), plus interest.