There are many reasons why people venture into business. Perhaps it has been your passion since you were young and have now decided to give it a try. Maybe you have experienced a major life change that requires you to think outside the box, like retirement,  parenthood, or losing your job. You could also be simply dissatisfied with your current job and believe that starting your own business is a better alternative.

Whatever the case, it is crucial to familiarize yourself with the legal aspects of business to avoid unnecessary and embarrassing repercussions. Once you have decided which business you want to start, you need to collect certain documents that will allow you to operate your premises without legal interference. Here are the legal documents you need in order to start a business in Alabama.

1. Articles of Incorporation

If you are starting a limited liability company (LLC), you need to file articles of incorporation with the commercial services department. Articles of incorporation is a set of legal documents that are required to create a corporation and typically contain pertinent information like the company’s name, street address. It will also address any stock involved with your company.

2. Certificate of Assumed Name

A sole proprietorship is the simplest type of business to start. You simply fill out a certificate of assumed name at the county clerk’s office and pay a nominal fee to ensure your new business name is a legally recognized alias. A Certificate of Assumed Name is a requirement when you are opening your business bank account, whether you are dealing with a sole proprietorship, partnership, or LLC.

3. Employer Identification Number

Just as you use your Social Security Number to identify yourself, your business also needs the Employer Identification Number (EIN) to identify itself. The 9-digit EIN is issued by the IRS and contains information about the State in which your business is registered. Any business operating in Alabama must have an Employer Identification Number. You can apply for an EIN by phone, mail, fax, or online.

4. Profession Licenses 

There are specific licenses required to do business in various trades in Alabama, such as plumbing, carpentry, and childcare. You should expect that you will need a business license to run your business. Standard licenses include those for real estate agents, security guards, private investigators, accounting firms, building contractors, and medical providers. Check with your business services office to determine whether you need a special license to operate your business, or whether individual employees need professional licenses to work in the industry.

5. Local Licenses

A local license is another necessity when starting a business in Alabama. Businesses are normally filed and registered at the county or city level before they are registered at the state level. It is relatively easy to obtain a local business license, but it is required for your business to operate legally.

Careful planning is crucial to ensure a successful business. Analyze your idea thoroughly and create a proper business plan before committing a substantial amount of money toward the venture. If you need an attorney to advise you on your business’s creation, attorney Tanika L. Finney is here to help. Call now at 334-246-4170.