How much does it cost to start a business in Alabama?
Doing it yourself, expect about $200 in year one — that's the Alabama LLC filing fee and the unavoidable state charges. With a registered agent service and a paid operating agreement it's closer to $500. Here's every line item, and what you can skip. You file the LLC with the Secretary of State but also register with the county probate court in some cases.
Alabama LLC filing fee — $200
The one required government charge to create the LLC — filing the Articles of Organization with Alabama. Processing is 1–2 weeks online. File directly with the state; a "filing service" just adds a markup on top of this.
Registered agent — $0–$150/yr
$0 if you're your own agent (you need a physical Alabama street address and to be around during business hours). A service runs about $100–$150/year and keeps your home address off the public record.
EIN (federal tax ID) — $0
Free from the IRS in about 10 minutes online. Anyone charging you for an EIN is reselling a free government service.
Operating agreement — $0–$100
Free with a solid template (you keep it, you don't file it). A lawyer or a formation upsell charges $100+ for the same single-member document.
Ongoing Alabama report — $50 / annual
An annual filing — Business Privilege Tax return; minimum recently reduced/eliminated for small filers — confirm. Miss it and the state can administratively dissolve your LLC.
Local business license — $0–$150
Many cities and counties require a general business or occupational license (often $50–$150/year); some have none. This is separate from the state and depends on where you operate.
Business bank account — $0–$15/mo
Plenty of banks and credit unions offer free small-business checking. Keep business and personal money fully separate — it's what makes the LLC's liability shield hold up.
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Build my planFrequently asked
What's the cheapest way to start a business in Alabama?
Register as a sole proprietor (no state filing, $0) and get a free EIN. The trade-off is no liability protection — your personal assets are exposed. The cheapest way to get that protection is a DIY LLC: about $200 in year one, filing directly with the state and acting as your own registered agent.
How much is an LLC in Alabama?
The state charges $200 to file. After that, budget roughly $175/year ongoing — the Alabama report plus a registered agent if you keep one. An EIN and operating agreement can both be $0.
Do I have to pay LegalZoom or a filing service?
No. Every required step — the state filing, the EIN, the operating agreement — you can do yourself for the government fee alone. Filing services bundle a markup onto the same $$200 state fee. FirstBearing gives you the filled-in forms and the official links so you file direct.
What ongoing costs should I expect in Alabama?
About $175/year: Alabama's report fee, a registered agent renewal if you use a service (~$125), and any local business license. That's before taxes on what you actually earn.
Is there a fee to get an EIN in Alabama?
No. The EIN comes from the IRS, not the state, and it's free. Apply directly at IRS.gov — never pay a third-party site for one.
Official sources
- Alabama — form your LLC (see the current fee)
- Alabama — tax registration
- IRS — apply for an EIN (free)
Fees and timelines are commonly-cited figures last reviewed 2025-06 and can change — always confirm on the official site. This is educational information, not legal or tax advice.