A business entity is a business structure. You register a company under a specific structure to be authorized to conduct business in the state and receive certain limitations of liability and must follow certain tax rules. Common business entities are corporations or limited liability companies (LLCs).
Starting a Business in Alabama
There are a few simple steps to starting a business in Alabama. Just remember that even though establishing the entity to run a business under is easy, you’ll spend a lot of time developing and growing your new business.
To start a business, you must first choose the business entity you wish to work under. A corporation limits liability but is taxed as an entity. An LLC, on the other hand, limits liability as well but can pass revenues on to the members for tax purposes or can elect to be taxed as a corporation. Check with your accountant to see what the best course of action is for your business.
Once you know the entity type you want, you’ll select a name, reserve the name and register the business. Registration is done with the Secretary of State. Check out the business services page on their website to obtain and file the correct forms.
Forming an LLC in Alabama
Starting a new LLC in Alabama is easy. You’ll follow the same steps that you would to start any other business in the state. The entity is the LLC structure. From there, select a name and be sure it is unique by doing a name search. File a Name Reservation Request to reserve the name and pay the $25 filing fee. Then file the Domestic LLC Certificate of Formation and pay the $200 processing fee. Mail the form to:
Alabama Secretary of State
PO Box 5616
Montgomery, Alabama 36103-5616