By Matt Eskridge
It is not difficult at all to start your own business within the state of Alabama. I did it, and so can you. This article is a quick, straightforward tutorial on how to do this based on my own personal experience.
Step 1: Select your Structure. There are a number of options here. I will recommend two of them, an LLC and a Corporation. Both structures protect you from personal liability, so long as you do your book-keeping properly. The primary difference is that Corporations require much more maintence, including officers, meeting minutes, and quarterly reports. The benefit to a corporation is that it is easily to provide shares to investors. If you want investment money, corporations are the best bet. If you want something easy to maintain, choose an LLC.
Step 2: Select a Name: When choosing a name, you will want to make sure it is not taken. First, do a search using hover.com to ensure that you can register a .com domain name for your business. If your company has a name that's too general, then this is an easy way to discard the idea and move on. Once you have an unregistered domain name, you will need to do a registration search. Go to this web address and type in your company's name. If the name is taken, you're out of luck and need to start over. Next, do a trademark search. Even if you don't register, you need to ensure that no one else registered. Go to this web address to do a trademark search.
Step 3: Identify the Structure. In this step, you must decide what structure your business will have. Who is on the board of directors? Who is in charge? Who owns what percent? If you are the only person in the business, the answer to this question is that you are the CEO and 100% ownership.
Step 4: Reserve Your Name. To reserve a name, you will need to file a bit of paperwork and pay a small fee. This costs $10, and you can find the form here.
Step 5: Register the Business. This is also paperwork. You will need to pay $100 initially and on an annual basis. Click here to find the form.
Step 6: Wait for a while. It takes several months to process this paperwork.
That is how you form a company in Alabama, and you will need to do this if you are starting a business and don't want to be personally liable for any lawsuits or debt, or want to receive investment money. Next month, we will include an article instructing you on the next step of forming a business: opening a bank account. For help with this process, we recommend you speak with the UAH Small Business Development Center, or the UAH Entrepreneurship Club's staff.