Alabama Filing Fees

What are the Business Filing Fees in Alabama?

Starting a business in Alabama means paying a variety of government filing fees. We’ve compiled the most common ones here so that you’ll know what to expect.

FILE YOUR BUSINESS

When you’re ready to turn your business idea into a profitable business, the first step is to register with the Alabama Secretary of State. There are a few choices when you register your business in Alabama, and the two most commonly picked entities are corporations and limited liability companies (LLC). These are called statutory entities, and must pay a fee to register to do business. On top of this, an Alabama business owner must also pay other fees, such as periodic reports and licensing renewals. If this sounds overwhelming, we’re here to help. Read on to learn more about filing fees, formation fees, and other business fees you may need to pay in Alabama, and how our products and services can help you keep your business venture running smoothly.

Step 1: Pay your Alabama business’s initial filing fees

To make your business official, you will register and pay a fee to the Alabama Secretary of State. The Secretary of State will issue a Certificate of Formation for an LLC or a Certificate of Incorporation for a corporation that allows your customers, competitors, and the government to know what your business is, where it operates, and who to contact regarding business matters. Alabama doesn’t require businesses to file bylaws or operating agreements, but we recommend that you create these governing documents during business formation.

You can file online, and the registration is effective almost immediately. If you file by mail, the registration is effective on the date the Secretary of State receives your registration. Alabama also offers expedited processing that includes delivery by a courier and same-day processing. If you don’t feel like tackling this yourself, we offer an expedited filing service to simplify your decisions, which can help form your business in days instead of weeks.

Step 2: Reserve your Alabama business’s name

Previously, Alabama required that you reserve your business name with the Secretary of State, and then wait for them to issue a Certificate of Name Reservation to file with your formation documents. Now, the Secretary of State allows you to file a name reservation application along with your formation documents to cut down on waiting time. If you want to reserve your name early, you can do so online or by mail, and the Secretary of State will hold the name for one year. You can renew your name reservation for another year if you re-file and pay another fee. If you need help reserving your business name, we offer a name reservation service that will do the work for you. 

Step 3: Reserve a “doing business as” name in Alabama

A DBA is your “doing business as” name. A DBA is necessary if you want your business to operate  under a name other than its legal, registered name that is on file with the state. DBA registration is most advantageous to sole proprietorships or general partnerships because you can avoid using your personal name as your business name. An LLC or other registered entity can also benefit if the business uses an abbreviation, a shortened name, if they want to use different names for different aspects of their business. A DBA can help if the domain name you want for your website isn’t available.

Alabama refers to DBAs as “trade names.” When you’re the first owner to use a trade name, you automatically receive exclusive rights to that name. The Secretary of State administers trade names at the state level. Alabama doesn’t require registration; however, trade name registration is the best way to prove that you’re the first to use that trade name. Alabama’s trade name registration is like a Federal trademark registration. You will submit a description of the trade name and specimens or examples of when you use the name (i.e., on product packaging or letterheads). Once registered, the trade name is effective for five years. Renewal is available.

Step 4: Obtain an Employer Identification Number (EIN)

Your business needs an Employer Identification Number (EIN) to pay its state and federal taxes. You will also need an Alabama Income Tax Withholding number to file an annual report and pay the Privilege Tax. The Alabama Privilege Tax is a fee for the privilege of doing business in Alabama. All entity types must pay the Privilege Tax. You may also be responsible for sales tax, rental tax, use tax, and many other tax types. You can obtain your EIN online from the IRS, or we offer a service that can do it for you for a fee and save you the hassle

Step 5: Draft an operating agreement, corporate bylaws, or partnership agreement for your Alabama business

Although Alabama doesn’t require you to file governing documents with your initial business registration, operating agreements, corporate bylaws, and partnership agreements are all essential documents in running your business. These documents are called “governing documents” because they outline how your business will operate, how it will distribute profits and losses, and other information for the new business. Regardless of whether Alabama requires them, they’re extremely important because they explain how your business will be organized and help resolve disputes between owners.

The costs related to governing documents will vary. You can write your own for free, but this isn’t advisable because of the many variables. You can hire a lawyer to draft one for you, but this may be expensive. Or you can use a template like our online LLC operating agreement template. This online template can help you to organize your business how you want while still being cost-effective.

Step 6: Apply for your Alabama business’s necessary licenses and permits

Alabama requires all entity types to acquire a Business Privilege License from the state and county. Some municipalities may require a license to operate. Alabama requires a store license to sell goods or merchandise, a restaurant and beverage license to sell food and drink, and many other licenses depending on the business. Because licensing can happen on the federal, state, and local levels and varies by industry, location, and other factors, there is no one-stop-shop to tell you every license or permit your business needs or what the fees will be. Don’t wonder — consult the experts! Our Business License Report can help you find the licensing you need for your business based on your location and industry.

Step 7: Pay Alabama registration fees for out-of-state businesses

A foreign entity is a business registered in a state other than Alabama. Foreign businesses need to register before doing business in Alabama, which comes with a fee. For corporations and LLCs, this means filing a Foreign (Corporation or LLC) Application for Registration. If your business is a general partnership, LP, or LLP, you will file a Foreign Statement of Authority. Alabama also requires that foreign businesses file to reserve their business name in Alabama.

Most states require foreign business entities to submit a Certificate of Good Standing (or your state’s equivalent) to register. Alabama doesn’t require a foreign business to provide a Certificate before registering in the state, but you must file an Application for Registration which can be found on the Secretary of State’s website. If you’re a domestic entity in Alabama and wish to register in another state, you may need a “Certificate of Compliance” to show that you have paid your taxes. The Alabama Department of Revenue provides the Certificate of Compliance online for a fee. Our Certificate of Good Standing service can handle this process for you.

Step 8: Check Alabama’s biennial report requirements & fees 

Alabama requires every corporation, limited liability entity, and disregarded entity registered in Alabama to file an Alabama Business Privilege Tax Return and Annual Report. Your business’s first business Privilege Tax Return is due two and a half months after registering with the Alabama Secretary of State. The Alabama Secretary of State has a filing fee for corporations only with the annual return. LLCs, general partnerships, LPs, or LLPs have no filing fee. If your business is brand new, you may only pay a minimum tax. Once your business starts making money, your Privilege Tax will increase with the business’s net worth. When it’s time to file your annual report or Alabama’s Privilege Tax, our annual report service can keep track of the deadlines for you. 

Step 9: Keep your Alabama business legally compliant

To make changes to your business, you may need to file paperwork with the state of Alabama.  If you want to change your business name, ownership, or registered agent, you can do so with the Alabama Secretary of State.  You will encounter fees to file the following documents:

  • Restated Certificate of Formation
  • Amendment to Certificate of Formation
  • Statement of Merger, Articles of Consolidation, or Share Exchange
  • Change of Registered Agent
  • Registered Agent Resignation Notice

If you need to make an amendment or a change to your business, be sure to check out our amendment service.

Let us help take the stress out of forming and running your Alabama business

Navigating Alabama filing fees can be complex and confusing, with terms like Business Privilege Tax and Certificate of Formation to understand and many fees to pay. We can help you avoid costly mistakes and fines with our Worry-Free Compliance service, which helps you keep track of your compliance deadlines and includes filing up to two amendments each year. Contact the formation experts today to see what we can do for your new business.

Disclaimer: The content on this page is for information purposes only, and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.

FAQs

  • Are there penalties for paying my fees late in Alabama?

    If you pay by mail and your payment is rejected, the Secretary of State will charge a dishonored check fee. The Secretary of State will collect the fee before it files your registration document.

    If your business fails to file its Alabama Business Privilege Tax Return or pay its Business Privilege Tax by the due date, you will face a penalty based on the amount due.

  • What happens if I can’t pay my fees to the Alabama government?

    If you don’t pay the Alabama filing fees for your business registration, the Alabama Secretary of State will remove the filing from the index. Your registration will have no legal effect.

  • Who receives the fees for forming my Alabama business?

    The Alabama Secretary of State and your registered agent’s county government split the fees.

  • What is usually the biggest fee I will pay when I form my Alabama business?

    The fees will vary depending on the type of entity you form. However, the initial registration fee for a new entity is usually the biggest Alabama business filing fee you will pay.

  • What payment methods can I use to pay my LLC or corporation filing fees to the Alabama government?

    If you register online, you can pay your Alabama formation fees with a credit card. If filing by mail, you can pay by check, money order, or credit card.

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