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.

LLC Service

Our Rating & Pricing

Top Features

Learn More

#1 TOP PICK

Free LLC Setup

  • 1 year free agent service

  • Digital storage

  • Different types of plans

FAST SERVICE

$49 + State Fees

  • Lifetime business support

  • 100% accuracy guarantee

  • Expert customer support

$299 + State Fees

  • Fast service

  • Resource center

  • Flat Rate for all services

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

How much does it cost to maintain an LLC in Alabama? You will need to pay annual fees and taxes to the state of the business. Failure to pay these fees and taxes can result in your company being deemed “delinquent” and will be penalized. In addition, failing to pay the Business Privilege Tax can result in a fine of up to $50 or 10% of the total amount owed.

The initial filing fee for your Alabama LLC is around $100. You’ll need to file an annual report every year as well as pay the Business Privilege Tax Return. The annual filing fees for this state are around $100. There are also additional business costs such as licenses, permits, and business taxes. Most of these fees must be paid when you first start your business. You may need to pay these fees on an ongoing basis or on an ad hoc basis.

The next step is to obtain a business license from the Alabama Department of Revenue. This license is necessary for conducting business in Alabama. However, the fees are not a large expense, especially considering the many benefits that come with this license. Moreover, the business license fees vary from county to county. The cost of a license is calculated after calculating the income of the business. You will also need to submit a business license if you are conducting business in the state of Alabaster.

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.

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