Starting an Alabama LLC costs more than just filing the initial fee of certificate of formation. In this article, we will take a look at the total costs it will incur to start an LLC in Alabama.
How much does an LLC cost in Alabama?
In Alabama, the usual fees to set up an LLC are:
Fee to File: The Certificate of Formation costs $200 to file.
Name Reservation Fee: It costs $25 to hold a name before you file.
Getting a business privilege license may be necessary depending on the type of company you run and where it is located. The cost of this license changes.
You should also think about ongoing costs, like the $100 yearly report fee in Alabama for LLCs. Fees can change, so always look at the most up-to-date information.
Business Privilege Tax (BPT)
This is what you need to know about the Business Privilege Tax (BPT) for an Alabama limited liability company:
There is a Business Privilege Tax that all LLCs in Alabama have to pay, no matter if they are local (formed in Alabama) or foreign (formed outside of Alabama but doing business in the state).
Tax Rates: The BPT for an LLC is based on how much money the business has. The least amount of tax is $100, and the most is $15,000. The following method is used to figure out the tax:
The tax is only $0.001 for the first $100,000 of net worth.
For net worth between $100,000 and $1 million, the tax is $0.0015 for every $1,000 of net worth above that.
If you have a net worth of more than $1 million, the tax is only $15,000.
Requirements for filing: Every year, LLCs need to fill out Form BPT, which is the Business Privilege Tax report. The report is due on the 15th of the fourth month after the end of the LLC’s fiscal year. This means that the report is due on April 15 for most LLCs that use a calendar year.
Payment of Tax: The LLC must pay the set amount of tax along with the BPT report.
Exemptions: Some groups, like non-profits, may not have to follow the BPT, but most for-profit LLCs will have to.
fines for Not Following the Rules: If you don’t file or pay the BPT, you may have to pay fines and interest on the amount you owe.
All LLC owners should keep careful records of their wealth and pay their taxes on time to stay out of trouble.
Alabama Registered Agent Fee
The fees for a registered agent in Alabama can differ based on the service provider you choose. Typically, you can look forward to spending between $100 and $300 each year for registered agent services. Some companies might provide extra services or packages that could influence the total cost. Comparing options and checking reviews is a great way to find a reliable registered agent that suits your budget!
I recommend the following Registered Agent Services:
Alabama Business Privilege License Fee
The type of business and the town in which an LLC operates determine the amount that must be paid in order for the LLC to get a business privilege license in the state of Alabama. Prices can start around $50 and go up to several hundred. There may be different fees and restrictions depending on the jurisdiction, so it’s best to contact the one in which your LLC will be based. There may be additional costs associated with the various licenses and permissions that certain firms may require.
Alabama Professional Licensing Fees
There are a variety of license fees in Alabama that are specific to each occupation. An example of a typical professional licensing fee might look like this:
Doctors and Other Medical Staff:
For medical physicians, the first licensing fee is around $300.
Initial licensing for nurses typically costs around $100.
Building and General Labor:
For contractors, the first licensing fee is usually $300.
The rates charged by electricians and plumbers might differ depending on the legislation in your area.
The Property Market:
The cost of a real estate agent license is around $150 for the first year and $30 per subsequent year.
Spa and beauty
The cost to become a cosmetologist typically ranges from $100 for the first year to about $150 for subsequent years.
Engineering Experts:
The cost of a license can range from $75 for renewals to $150 for an initial license.
Financial reporting:
The application price for a certified public accountant license is usually approximately $100, and the renewal fee is around $50.
Because these fees might change often and vary greatly from one profession to another, it is essential to get the most up-to-date information by contacting the relevant licensing board or department.
Local Business License Fees in Alabama
In Alabama, the fees for local business licenses can differ quite a bit based on the city or county where your LLC is running its operations. Here are a few friendly points to think about:
City Licenses: Many cities ask for a business license, and the fees can vary from about $50 to several hundred dollars, based on the type and size of the business.
County Licenses: Some counties have their own licensing requirements, and the fees can vary based on that.
Some industries might need extra licenses or permits, and these can have their own associated fees.
Renewal Fees: A lot of local licenses need to be renewed each year, usually with fees that are similar to those of the original license.
It’s always a great plan to reach out to your local city and county government for the most accurate details about licensing requirements and fees for your LLC. If you have a particular place in mind, I’d be happy to help you find more detailed information!
Optional LLC Fees in Alabama
I have covered the mandatory fee above however, you may be required to pay these optional fees if you choose the following services:
Alabama Trade Name
A trade name, which is also called a “Doing Business As” (DBA) in Alabama, lets an LLC do business under a name other than its legal name. To set up a DBA for your Alabama LLC, follow these steps:
Check Name Availability: Use the Alabama Secretary of State’s business name database to make sure the trade name you want is available. The name must be unique and not sound like the name of another listed entity.
Fill Out a Registration Form: You need to have the Alabama Secretary of State receive a trade name registration form. To do this, you can either fill out and send in a form online. Usually, the form needs:
- The name that was suggested
- The business’s name
- The main address of the LLC
- The person filling out the form’s name and address
Pay for the Form Cost: Filing for a DBA costs money. The fee is $30 right now, but you should check the Secretary of State’s website for the most up-to-date list of fees.
Renewal: DBAs in Alabama don’t need to be renewed every year; they stay valid as long as the LLC that they are based on is still current.
Local Needs: To run a business under a trade name, some counties or cities may have extra rules or permits that you need to follow. It’s best to check with the relevant officials in your area.
You should keep proof of the registration because you may need it for banking, contracts, or other business reasons.
Certified Copies of Business Documents
In Alabama, you can usually acquire certified copies of business documents for an LLC from the office of the Alabama Secretary of State. Here is the process for making your request:
Determine the Required Documents: Typical documents for which you may seek certified copies include the Articles of Organization, Operating Agreement, and any amendments or supplementary filings.
To proceed, you might need to fill out a request form, typically found on the Secretary of State’s website.
Fees: Typically, there is a charge for acquiring certified copies. Visit the Alabama Secretary of State’s website to review the current fee schedule.
Submit the Request: You may typically submit your request online, by mail, or in person, based on the services provided by the Secretary of State.
Processing Time: It is important to verify the estimated processing time, as it may differ.
Alabama Certificate of Existence
In Alabama, the Secretary of State issues a Certificate of Existence, which is also called a Certificate of Good Standing. This paper confirms that your LLC is properly registered and following all state rules. It usually lets you know that your LLC is up and running, that you’ve paid all the fees, and that you’ve turned in any necessary yearly reports or papers.
To get a Certificate of Existence for your Alabama LLC, follow these steps:
- You can ask for a Certificate of Existence online through the website of the Alabama Secretary of State. Usually, there is a fee, which you can pay online.
- When you want to send by mail, you can download a request form, fill it out, and send it to the Secretary of State’s office with the payment.
- You can also go to the office of the Secretary of State in person to ask for the certificate.
Required Information: You may need to give the name and ID number of your LLC when you ask for the license.
Before you ask for the certificate, make sure that your LLC is in good standing. Any fees or reports that are still due could delay the issue.
Disclaimer:
The material on this website is intended for general information purposes only and should not be construed as legal, tax, or financial advice. Laws and regulations vary by jurisdiction and might change over time. It is critical to obtain specialized guidance that fits your individual situation. The opinions presented here are purely those of the writers and should not be considered professional advice. For any legal or tax-related issues, it is best to speak with a certified specialist who can give specialized advice based on your specific circumstances.
