Start a Free LLC in Alabama

How to Form an LLC in Alabama in 5 Simple Steps

Starting an LLC in Alabama involves a few straightforward steps. First, choose a unique business name and reserve it with the Alabama Secretary of State. Next, select a registered agent, prepare and file your Certificate of Formation, and create an Operating Agreement. You will also need to obtain an EIN, if required, and check for any applicable business licenses, permits, and tax obligations before starting operations. Let’s discuss each step in brief:

Step 1: Choose a Business Name for Your LLC in Alabama

Alabama is the only state in the U.S. that strictly requires a mandatory name reservation as a prerequisite before you can form your Alabama LLC by filing your business formation documents. You can’t simply write your chosen name on the Certificate of Formation the way you can in most states. You have to reserve it first and attach proof of that reservation to the filing.

So, choose an LLC name in Alabama that includes the appropriate designator, such as "Limited Liability Company," "L.L.C.," or "LLC," per statute, and avoid using restricted words like "bank," "insurance," "trust," or "architect." Then run through Alabama Business Entity Records before submitting a reservation request.

If your preferred name is already taken, you can use the Swyft Filings free business name generator tool to get alternatives that are actually available.

Step 2: Appointing an Alabama Registered Agent

According to Alabama Code §10A-1-5.31, every LLC must have a registered agent and a registered office in the state. Your registered agent receives legal documents, official notices, and other paperwork on behalf of your LLC. If you are wondering, “What is the required address for a registered agent in Alabama?” Here is the answer:

• Must be located in Alabama: The registered agent must be either an Alabama resident individual or a domestic or foreign entity authorized to transact business in Alabama.

• Must have a physical address: The agent must maintain a business office at the same address as the LLC’s registered office.

• Must be available for service: Available during business hours, generally understood as 9 a.m. to 5 p.m., Monday through Friday, so legal documents can actually be served.

Keep these requirements in mind when appointing a registered agent and registered office for your Alabama LLC:

• Cannot use a virtual address: A virtual office or mail-forwarding service cannot be used as the registered office.

• Cannot use a mailbox-only address: A P.O. box or mailbox service alone does not qualify as a registered office.

• Cannot use a telephone answering service: The registered office must be a physical location where the agent can receive service of process.

Step 3: File Certificate of Formation for Your Alabama LLC

This is the filing that legally creates your Alabama LLC. To file your Certificate of Formation and officially start an LLC in Alabama, visit the Alabama Secretary of State LLCs page to submit your documents online or by mail. Here are the quick steps to file a Certificate of Formation for your Alabama LLC

• Reserve a name: Get a Name Reservation Certificate from the state before you file.

• Complete the form: Fill out the Domestic LLC Certificate of Formation with your business name, registered agent name, and physical Alabama address, and organizer details.

• Pay the fees: Pay the state filing fee of $200. Additionally, when combined with name reservation fees, the total ranges from $225 to $228.

• Submit: File online through the state portal or mail two copies of the form with a self-addressed stamped envelope to the Secretary of State, Business Services, P.O. Box 5616, Montgomery, AL 36103.

• Standard processing: Typically takes 7 to 10 business days once the state receives the filing, with online submissions typically clearing faster than mailed submissions.

The Alabama LLC Certificate of Formation asks for:

• LLC name, matching the name you already reserved.
• Registered agent name and address, the Alabama street address covered above.
• Management structure, a statement of whether the LLC will be member-managed or manager-managed.
• Organizer signature, from whoever is submitting the filing.

Alabama does not require members’ names or addresses to appear on the public Certificate of Formation, which is more privacy than many states offer at the formation-document level.

Step 4: Getting an EIN From the IRS

Once Alabama approves the LLC, the next step is a federal Employer Identification Number. Banks require it to open a business account, and it’s necessary before hiring anyone or filing most federal returns. Applying for an EIN is free no matter which way you apply.

• Online: the fastest option, with the EIN issued immediately after a roughly 15-minute application, available in a single session during the IRS’s posted hours.

• Fax or mail (Form SS-4): A slower alternative. Fax responses typically take a few business days; mail can run up to several weeks.

Owners without a Social Security Number can still apply. Leave the SSN/ITIN field blank on Form SS-4, write "Foreign/Non-Resident," and mail or fax the form to the IRS’s international unit rather than using the online tool, which requires an SSN or ITIN.

Step 5: Create an Alabama LLC Operating Agreement

Alabama’s LLC Act doesn’t require a written operating agreement, and nothing about it gets filed with the state. Without one, the Act’s own default provisions fill the gaps, and those defaults are generic. They won’t reflect what a specific group of owners actually agreed to. A working agreement typically covers:

• Ownership and contributions, who owns what percentage, and what each member put in to get there.

• Management structure, member-managed or manager-managed, matching what was declared on the Certificate of Formation.

• Voting and decision-making, what threshold major decisions need, and how ties get resolved.

• Profit and loss distribution, how and when money actually moves to owners.

• Changes in membership, how a new member gets admitted, or how a departing member’s interest is handled.

Keep the signed agreement with the LLC’s internal records. If drafting one isn’t appealing, Swyft Filings can build a custom LLC operating agreement from a short questionnaire.

What Are the Post-Formation Requirements for an LLC in Alabama?

Now that you know how to form an LLC in Alabama, the next step is to stay on top of your post-formation compliance requirements and keep your LLC in good standing.

Register for Alabama State Taxes and the Business Privilege Tax

If the LLC in Alabama will sell taxable goods, run payroll, or owe another state business tax, registration happens with the Alabama Department of Revenue through the Business Tax Online Registration System, part of My Alabama Taxes (MAT).

The Filing Most New Owners Miss: the Business Privilege Tax

Alabama taxes LLCs a little differently than most states through the Business Privilege Tax (BPT), an annual tax based on net worth rather than income, which begins almost immediately after Alabama LLC formation rather than at the usual annual-report cadence.

• Initial return: Form BPT-IN is due within two and a half months of LLC formation in Alabama; it is the first BPT filing every new LLC owes, regardless of whether the business has started generating revenue yet.

• Annual return: Alabama Form PPT (Business Privilege Tax Return and Annual Report for Pass-Through Entities) is due by April 15 each year, starting the year after formation.

• Small-LLC exemption: Under the updated Alabama Business Privilege Tax rules, LLCs and other small entities with a calculated tax liability of $100 or less for tax years beginning after December 31, 2023, owe $0 and do not need to file a return.

NOTE: Both returns are filed with the Alabama Department of Revenue, not the Secretary of State, and can be paid online through My Alabama Taxes.

Sorting Out Business Licenses

Alabama doesn’t issue one general state business license the way some states do. Licensing instead runs through the county and, in some cases, municipal government.

• County business privilege license: Handled by the Probate Judge or License Commissioner in the county where the LLC operates; almost every active business needs one, and the cost and category depend on the type of business.

• City licenses: Many Alabama municipalities layer their own business license on top of the county one, so an LLC operating inside city limits may need both.

• Regulated professions: Fields such as cosmetology, contracting, real estate, and healthcare require licensing through the relevant state board in addition to general local licensing.

Since requirements vary by county and city rather than following one statewide list, confirming what applies to a specific address and business activity is worth doing before opening. If you're unsure which licenses and permits your business needs, Swyft Filings’ Business License Research service can help. Our team reviews your business details against federal, state, and local licensing requirements, then provides a customized report outlining the requirements that apply to your business, along with verified information and direct application links.

If an LLC in Alabama needs to close, it must file Articles of Dissolution ($100 fee) with the Secretary of State and settle any outstanding Business Privilege Tax first. If you’d rather avoid handling the paperwork yourself, Swyft Filings’ Alabama LLC Dissolution service can help manage the process and file the required documents on your behalf.

Open a Business Bank Account

While opening a business bank account is not a state filing requirement, it is an important step for maintaining separation between your personal and business finances. Banks typically require your LLC’s EIN, Certificate of Formation, operating agreement, business name and address, and identification for the account signer.

You can open an account with any bank that serves Alabama businesses; an in-state branch is not required, although having one nearby may make in-person verification easier. For a detailed reference, consider reading "How to Open a Business Bank Account in 2026."

How Much Does an LLC Cost in Alabama?

DIY vs. Swyft Filings: Alabama LLC Formation Differences

Starting an LLC in Alabama yourself is possible, but it requires time, research, and follow-up. Here’s how forming an Alabama LLC on your own compares with using Swyft Filings:

*Disclaimer: This guide provides general information about forming an LLC in Alabama and is not a substitute for legal, tax, or financial advice.*