Widely known for stunning beaches, peanuts, and classic southern hospitality, the state of Alabama is an excellent place to form a business. If you're starting an LLC in the great Yellowhammer State (nicknamed that after the state bird), there's no doubt that you'll have a lot of questions. We've gathered many of the most frequently asked questions to help you hit the ground running with your Alabama LLC. From registering your company with the state of Alabama, to business licenses and business privilege taxes, we’ve got you covered. We’ve answered these questions below and linked extensively to our guides, tools and other services, which makes everything streamlined and simple.
How Do I Decide What the Best Legal Structure Is for My Business?
There are a few different options when it comes to forming a business in Alabama. From a legal perspective, there are three main types of Alabama for-profit business entities: LLCs, S Corporations or C Corporations. At Bizee, we believe an LLC entity provides the right mix of liability protection and ease of administration for many entrepreneurs.
What Do I Need to Start a Business in Alabama?
In order to start an LLC in the state of Alabama, there are some minimum requirements you must meet. These are a completed Certificate of Formation, a business name and a fee you pay to the Alabama Secretary of State. We recommend taking some additional steps before officially forming your LLC:
- Research your target marketRead industry guides
- Read industry guides to give you a starting point in your niche.
- Create a comprehensive business plan that defines the most important aspects of your Alabama business.
- Write an Operating Agreement that covers how you will run your LLC.
After you’ve created your Alabama LLC, you will also need to review your business license requirements, understand ongoing filing needs, set up a separate business bank account and get an accountant.
How Do I Register a Company in Alabama?
In Alabama, you register a business by completing and filing your Certificate of Formation with the Alabama Department of State. You will need to gather information about your business, fill out the form and send it to the Secretary of State with your filing fee. This will formally create your LLC in Alabama.
You can file your Certificate of Formation on the Secretary of State website or mail it in. Alternatively, Bizee can guide you through every step of the process by getting details from you and filing the form on your behalf — for free! There’s no additional charge for our basic LLC filing service, so all you need to do is pay the Alabama state filing fee.
Incorporate Through Bizee for $0 + the Alabama State Fee
And get a free Registered Agent for a year.Incorporate Your Alabama LLC Now
How Much Does It Cost to Form an Alabama LLC?
At the time of writing the fee charged by the Alabama Secretary of State is $200. You can always check the latest Alabama filing fees here. In many states you can also pay an additional fee for expedited filing through Bizee, which will create your LLC faster. The amount of the expedited fee is dependent on how quickly you want your filing processed. Some LLC filing services do charge you extra to prepare and submit your filing documents, but at Bizee, we do this for free — so you only pay the state fee.
How Long Does It Take to Form an LLC in Alabama?
Once you’ve gathered all of your pertinent information together and filed your Certificate of Formation (or had Bizee do it for you), it will typically take up to 24 hours for the Alabama Secretary of State to legally create your LLC. Because of this quick processing time, the state of Alabama doesn't provide expedited filing, like many other states do.
How Do I Perform an Alabama Business Search?
The name of your Alabama LLC needs to be unique, so you’ll need to check if it’s already being used by another business. You can do that via the Alabama Secretary of State website, or by using our fast and simple Business Name Search tool.
Is Your Business Name Available in Your State?
Find out using Bizee’s Business Name Search Tool.Free Business Name Search
Trying to Come Up With a Creative Business Name?
Try Bizee's Business Name Generator to brainstorm ideas.Business Name Generator
How Do I Register a Business Name in Alabama?
There are a few ways to register your Alabama LLC name.
- If you’re forming a new business and your business name is unique in Alabama and meets state naming rules, you simply include it in your Certificate of Formation.
- If you want to change the legal name of your business, file a Certificate of Amendment with the Secretary of State.
- If you just want to do business under a different name, you must file an Application to Register or Renew a Trademark, Service Mark, or Trade Name with the Alabama Secretary of State, or we can do that on your behalf.
If you want to prevent people from using your business name across the U.S., you can file a trademark for the name. We can help.
What Are Alabama Articles of Incorporation?
In several other states, the formal documents that you file to form a corporation or LLC might be known as Articles of Incorporation. In Alabama, this document is called your Certificate of Formation, and it performs the same functions as the Articles of Incorporation.
Does Alabama Have Series LLCs?
Yes, the State of Alabama allows the formation of Series LLC within the state. A Series LLC is a special type of LLC where you create one “overall” business and then have individual, series LLCs within it, each counted as separate legal entities.
To form a Series LLC, simply fill out your Certificate of Formation as you would for a Domestic LLC, but make sure you indicate in the appropriate spot that your LLC is a Series LLC. Then, simply file it with the Secretary of State. The fee for a Series LLC formation is the same as the typical Domestic LLC.
How Do I Change a Registered Agent in Alabama?
If you wish to change your Alabama Registered Agent you can do so by filing a Change of Registered Agent form with the Secretary of State. Here at Bizee, we provide a free Alabama Registered Agent service for the first year if you file through us. If you’ve been using a different Registered Agent and want to switch to us, we’ll file the Change of Registered Agent form on your behalf.
Need to Change Your Registered Agent?
Have Bizee file the paperwork for youChange Of Registered Agent Service
How Do I Perform an Alabama Registered Agent Search?
If you need to know the Registered Agent of a specific Alabama business, you can perform an Alabama Registered Agent search within the state's business database.
What Alabama Business Taxes Do I Need to Pay?
As an LLC, any business profits you earn will be reported on your personal 1040 filing and reported and taxed as “pass-through” income. You will typically need to pay:
- Self-employment or payroll tax on all business profits
- Federal income tax on profits after you meet your tax-free allowance
- Sales tax for selling taxable products and services
What Businesses Need to Pay Alabama Sales Tax?
Alabama charges a 4 percent state sales and use tax on all retail sales, leases and rentals of most goods. You will also need to pay sales tax if you provide a taxable service. You can find details on sales that may be exempt from sales tax provided by the Alabama Department of Revenue.
How Do I Get an Alabama Sales Tax ID?
How Do I Calculate Alabama Sales Tax?
The base rate for Alabama sales tax is 4 percent, and there may be additional sales tax depending on your region, county or city. Once you know your overall sales tax amount, calculate the value of all your taxable products and services. Then, multiply that by your sales tax rate to understand how much you will need to pay.
When Is Alabama Sales Tax Due?
Once your LLC’s sales tax registration is complete, you will receive a tax account number and information regarding how often you must file a sales tax return and pay sales taxes. Returns and payments may be due monthly, quarterly or annually.
What Do I Need to Know About Alabama Business Privilege Tax?
The Alabama Business Privilege Tax is a tax levied for the privilege of being organized under the laws of Alabama or doing business in Alabama. As such, every business formed within the state of Alabama, including LLCs, must file and pay Business Privilege Tax each year.
Do I Need a License to Do Business in Alabama?
Yes. If you intend to form and operate a business in Alabama, the state requires you to have a Business Privilege License. To obtain one, follow the details provided by the Alabama Department of Revenue.
Your business may need additional licenses in order to operate, and those types of business licenses you need will vary depending on your type of business, industry, location and various other factors. We can research the types of business licenses you might need for you.
We hope you’ve found this Alabama LLC FAQ useful. If you’ve used our services and have a question that isn’t answered here, let us know and we’d be happy to help.