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LLC Management

How to dissolve an LLC in Alabama

Updated 2025
Direct answer

To dissolve an Alabama LLC, file a Certificate of Dissolution with the Alabama Secretary of State. The filing fee is $100. Before filing, you must wind up business affairs, pay all debts, notify creditors, and file your final Business Privilege Tax return. Dissolution stops the annual $100 privilege tax from accruing.

Not legal advice. Consult a licensed Alabama attorney before dissolving an LLC, especially if the business has outstanding debts, employees, or ongoing contracts.

Why properly dissolving matters

Simply stopping business operations is not enough to legally close an Alabama LLC. If you don't formally dissolve, the LLC continues to exist in the eyes of the state — meaning you continue to owe the annual $100 Business Privilege Tax each year, must maintain a registered agent, and remain exposed to potential liability from the entity.

How to dissolve an Alabama LLC — step by step

1

Vote to dissolve (if multi-member LLC)

If your LLC has multiple members, follow the dissolution procedure in your operating agreement. This typically requires a majority or unanimous vote. Document the vote in writing.

2

Wind up business affairs

Complete any outstanding contracts, collect money owed to the LLC, and stop taking on new business. This "winding up" period allows you to wrap up all ongoing obligations.

3

Notify creditors and pay debts

Notify all known creditors in writing that you are dissolving the LLC. Pay all outstanding debts and obligations. Under Alabama law, you can set a deadline (at least 120 days) for creditors to submit claims.

4

File your final tax returns

File the final Alabama Business Privilege Tax return and any other outstanding state and federal tax returns. Mark them as "final" returns. Close your business tax accounts with the Alabama Department of Revenue.

5

Distribute remaining assets

After paying all debts and taxes, distribute any remaining assets to LLC members according to their ownership percentages or as specified in the operating agreement.

6

File Certificate of Dissolution

File Articles of Dissolution (Form LLC-9) with the Alabama Secretary of State. The filing fee is $100. You can file online at sos.alabama.gov. The dissolution is effective when the state processes the filing.

7

Close business accounts

Close your business bank accounts, cancel your business licenses, notify your registered agent, and cancel any other business accounts or subscriptions.

Alabama LLC dissolution costs
Certificate of Dissolution filing fee$100
Final privilege tax return$100 minimum
Processing time3–5 business days (online)

Frequently asked questions

What happens if I just stop paying the privilege tax and don't dissolve?
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The state will eventually administratively dissolve your LLC for failure to pay the privilege tax — but this can take time, during which penalties and interest accumulate. Administrative dissolution also doesn't eliminate your liability for debts incurred before dissolution. Voluntary dissolution is always cleaner and less risky.
Can I reinstate a dissolved Alabama LLC?
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Yes — an administratively dissolved LLC can be reinstated by paying all past-due taxes, penalties, and filing a reinstatement application with the Secretary of State. A voluntarily dissolved LLC generally cannot be reinstated and would need to be reformed as a new entity.

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