How to Start an LLC in Alabama (2026)

Full transcript

0:00 The short answer

Dan To start an LLC in Alabama, you reserve your name, then file a Certificate of Formation with the Alabama Secretary of State, and pay $208 online.

Maya Reserve the name first? Not file and hope?

Dan Alabama requires a Certificate of Name Reservation before you can file.

Maya This is The Business Formation Podcast. Today, Alabama for 2026, in six steps, with what it all costs and the three best ways to have it filed for you. Where do I begin?

0:29 Step 1: Reserve your LLC name

Dan Start with the name. It needs limited liability company, L.L.C., or LLC in it. Then you reserve it.

Maya What does a reservation cost?

Dan $28 online, or $25 by mail.

Maya How long does it last?

Dan One year. And a copy gets attached to your Certificate when you file.

0:50 Step 2: Name a registered agent

Maya Who can be my registered agent in Alabama?

Dan An Alabama resident or an authorized business, at an Alabama street address where legal papers can be served in person.

Maya A P.O. box?

Dan Not allowed. And the agent can't work only through a virtual office or mail forwarding.

Maya Is the address public?

Dan Yes. That's why many owners hire a commercial agent. Changing agents later costs $100.

1:17 Step 3: File the Certificate of Formation

Maya How do I file?

Dan Through the Secretary of State's online services. It's $208.

Maya And on paper?

Dan By mail it's $200, and $100 of that goes to the county where your agent is.

Maya What does the Certificate ask for?

Dan The name, your reservation, the registered agent and county, and a statement that the LLC has at least one member.

Maya I'm Maya, by the way, here with Dan.

Dan Great to have you, Maya. And note that the Certificate doesn't list the members' names.

1:47 Step 4: Write an operating agreement

Maya Is there a state form for the operating agreement?

Dan No. Alabama's law calls it a limited liability company agreement. You keep it with your records, and there's no state fee.

Maya Even for a one-person LLC?

Dan Alabama law says even a one-member agreement is enforceable. So put yours in writing.

Maya What goes in it?

Dan Who owns what, how profits are split, who makes decisions, and what happens if a member leaves.

2:15 Step 5: Get a free EIN

Maya What about the federal side?

Dan Apply for your EIN free with the IRS at IRS.gov, after the state files your Certificate.

Maya Is it instant?

Dan If the online application is approved, the number is issued right away.

Maya Anything local?

Dan Yes. You'll also need a business license from the county probate judge or license commissioner where you do business.

Maya And the beneficial ownership report?

Dan Skip it. FinCEN no longer requires it from U.S. companies.

2:43 Step 6: Ongoing requirements

Maya What do I file every year?

Dan Here's the good news. Alabama LLCs don't file an annual report with the Secretary of State.

Maya Nothing at all?

Dan Keep your registered agent current. And there's a business privilege tax return with the Department of Revenue in some years.

Maya When do I owe it?

Dan The tax is based on net worth. If it works out to $100 or less, there's nothing to pay and no return to file. That covers most small LLCs.

3:11 What it costs

Maya Give me the do-it-yourself total.

Dan $236 to form online. That's $28 for the name reservation plus $208 for the Certificate.

Maya And after that?

Dan There's no annual report fee, and the EIN is free.

Maya So year two costs what?

Dan Nothing to the state, as long as the privilege tax is $100 or less.

3:37 Online versus mail

Maya Does mail cost less?

Dan Yes. The reservation is $25 and the Certificate is $200.

Maya So that's?

Dan $225 by mail, against $236 online.

Maya An $11 difference.

Dan Right. Online is $3 more on the reservation and $8 more on the Certificate.

3:59 Picking your registered agent

Maya Could I be my own agent?

Dan If you're an Alabama resident with an Alabama street address where papers can be served in person, yes.

Maya And if I work from a virtual office?

Dan That doesn't qualify on its own. The address has to be a real street address.

Maya What if I want to change later?

Dan $100. So choose carefully the first time.

4:22 The county license

Maya Let me press on the license. Where does it come from?

Dan The county probate judge or license commissioner, in the county where you do business.

Maya Is that a state filing?

Dan No. It's local, separate from the Certificate.

Maya So the EIN doesn't replace it.

Dan Right. They're different steps.

4:41 The reservation and the Certificate together

Maya Why does the reservation come first?

Dan Because Alabama requires the Certificate of Name Reservation before you can file the Certificate of Formation.

Maya And it stays attached?

Dan A copy gets attached to the Certificate. So the two filings travel together.

Maya What if I take a while to get ready?

Dan The reservation holds the name for one year, so you have time.

Maya And what do I pay in total again?

Dan $28 plus $208 is $236 online.

5:11 The business privilege tax

Maya Explain the privilege tax like I'm new.

Dan It's a Department of Revenue tax based on net worth.

Maya Do small LLCs pay it?

Dan If it works out to $100 or less, there's nothing to pay and no return to file. That covers most small LLCs.

Maya And if it's more?

Dan Then you file the return. That's the only time it applies.

Maya Is it the same as an annual report?

Dan No. The Secretary of State has no annual report for Alabama LLCs at all.

5:40 What the Certificate leaves out

Maya Is my name public on the Certificate?

Dan The Certificate doesn't list the members' names. It lists the LLC name, your reservation, the registered agent and county, and a statement that there's at least one member.

Maya So the agent's address is the public part.

Dan Yes, the agent's address is public, which is one more reason people hire a commercial agent.

6:03 First-year checklist

Maya Give me the order of operations.

Dan Reserve the name. Choose your agent at an Alabama street address. File the Certificate online for $208. Then get your EIN, your county license, and write your operating agreement.

Maya And later?

Dan Keep your agent current, and watch the business privilege tax threshold.

6:23 The 3 best ways to file in Alabama

Maya What if I want someone else to handle it?

Dan Here are the three best ways to file in Alabama. Number one, our pick, is Mainstay Filing, $199 a year plus the state fee. With the $236 state fee, checkout comes to $435.

Maya What does that cover?

Dan Your name reservation and Certificate of Formation filed, your EIN application, and your registered agent every year. It renews at the same $199.

Maya Number two?

Dan AL Registered Agent.org. It prepares and files your Certificate for $199 plus the state fee, also $435 at checkout. The first year of agent service is free, then it's $99 a year.

Maya And number three?

Dan Alabama Registered Agent.co. Same offer. $199 plus the state fee, first year of agent service free, then $99 a year.

Maya How do I choose?

Dan Alabama has no annual report. So from year two, numbers two and three cost less, at $99 a year for the agent alone, against $199 for Mainstay.

7:32 Three years of service fees

Maya Give me the three-year view.

Dan Mainstay is $199 a year, so $597. Number two or three is $199 in year one, then $99 in each of the next two years, for $397.

Maya A $200 gap.

Dan Yes. That's the price of one steady $199 a year, renewing at the same amount.

7:58 Recap

Maya One more pass?

Dan Reserve a name with LLC in it, name a registered agent at an Alabama street address, file the Certificate of Formation online for $208, write an operating agreement, get your free EIN, and keep your agent current. There's no annual report.

Maya The links to all three services and every official source are in the show notes. Thanks for listening to The Business Formation Podcast, and good luck with your new Alabama LLC.