LLC Cost in Alabama – How Much to Pay for an LLC


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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.

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.

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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. 

StatesAlabamaTennesseeGeorgiaMississippiNorth 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 Tax4%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

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.

Whether you’re considering starting a business in Alabama or you’re an existing Alabama business, it’s important to understand how much it costs to maintain an LLC. The cost of maintaining an LLC will depend on the type of business you operate, the size of your business, and the complexity of your business structure. You’ll also want to consider the costs associated with forming an LLC.

Alabama requires LLCs to file a Certificate of Formation with the Secretary of State and the Probate Court. You can file online or by mail, and the process takes three business days. This document will establish your LLC’s legal status, ensure it’s recognized in the state, and keep it from violating state laws.

Alabama requires LLCs to file a Business Privilege Tax Return with the Alabama Department of Revenue. The return is due within two and a half months of the start of the tax year. Failure to file the return can result in penalties and interest.

The state also requires LLCs to file an annual report. This document includes information on the business, such as its members and registered agent. It is also required by law to be filed with the Secretary of State by April 15 of each year. While it’s not mandatory, you may want to consider using an LLC report service to help you keep track of your annual reporting requirements.

Other costs associated with operating a business in Alabama include licenses and taxes. The cost of a license depends on the type of business you operate, the county in which you operate, and your location. Some licenses are one-time fees, while others can be ongoing. In addition, some services will charge an annual fee.

The Alabama Department of Revenue also has an online directory of regulatory agencies in the state. You can search for a local regulatory agency by city, county, or state. It also has a directory of taxes, miscellaneous business taxes, and regulatory boards that require licensing. The website is also a good place to find a list of license fees. Some licenses are required by law, while others are optional. You’ll also want to check with the Alabama Department of Revenue for information on sales and miscellaneous business taxes.

Another cost associated with operating an LLC in Alabama is a registered agent. You’ll want to find an agent who lives and works in the state, and is available during business hours. The agent’s main job is to receive service of process and other legal documents on behalf of the LLC. They also receive subpoenas and other legal notices. The agent will also act as the main point of contact between your business and the state. If you choose to use a registered agent, make sure he or she has a physical address in Alabama.

The most expensive cost associated with operating an LLC in Alabama is the fee for forming an LLC. The cost of forming an LLC is based on the size of your business, your name preferences, and the complexity of your business structure. The cost of forming an LLC in Alabama can be as low as $200, but it can be more expensive if you use an LLC formation service.

F.A.Qs

Can I start an LLC for free?

It is possible to form an LLC without professional help, but forms still have associated costs, regardless of where your LLC is formed.

Is an LLC expensive?

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.

Does an LLC need a bank account?

The need to separate personal money from business funds, thus necessitating the creation of a business bank account for your LLC.

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.

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