Wed 02 Sep 2015 | By:

Why You Should Incorporate in Alabama: 5 Solid Reasons

Why Incorporate a Business

Not every entrepreneur sees the value of incorporating their business. What they don’t realize is the fact that incorporation is very important and it helps protect your business from unnecessary legal liabilities.

Generally, incorporating any type of business requires time, effort and money – this is the same if you incorporate in Alabama. If you have no idea about incorporation, we’ll discuss the entire process in this article.

First, we’ll take a close look at three great choices when it comes to incorporating your business in Alabama. Let’s start with the top 5 reasons why incorporating your business in Alabama is essential!


1) Avoid Misunderstandings Between Founders

If there’s one very important thing that incorporation does, it’s allowing you to run your business smoothly by preventing misunderstandings between founders/partners.

If you’re the sole owner of your business, good for you. However, most businesses are owned by multiple people and misunderstandings may arise when it comes to equity division. Incorporation answers this issue because when you legally register your business before the federal government, stocks will be issued to founders thereby preventing issues in equity splits.


2) Create a Distinction Between Personal and Business

When you operate under Sole Proprietorship or Partnership, there’s lack of separation between business and the owner, therefore you will be held liable for any legal issues that may arise. For instance, when a customer sues your business, you will directly be affected by this action.

However, if you incorporate your business under LLC, you will be protected against personal liability, so if problems come up, your personal assets will not be seized. However if you start a Corporation in Alabama, you’ll have different benefits as well as that layer of protection.


3) Gain Business Funding for Your Alabama Startup

An important thing that you need to have when starting a business is capital. If you’re planning to gain funding, you should incorporate your business. For you to accept investments from investors, you have to form an entity to give them peace of mind.

Also, when a business is incorporated, it automatically establishes its own credit profile so if you need future loans, it won’t be as hard to get one.


4) Establish Your Business’s Credibility

Trust is essential in the business-customer relationship, and when people see that you have an LLC attached after your business name, this will send out a signal that you are legally permitted to operate. Also, in some industries, there must be a business structure to gain contracts and this can only be achieved if you incorporate.


5) Take Advantage of Tax Benefits

Although not in the majority of cases, there are instances when corporate tax rates are lower than individual tax rates. If you have an LLC or Inc after your last name, you’ll be able to take advantage of tax benefits and exemptions.


3 Resources for Incorporating a Business in Alabama

Startup Tools and ResourcesAs I mentioned before, incorporating a business in Alabama may be a little intimidating. If you want a worry-free LLC, Corporation, or Non-Profit, look into using an online incorporation service.

They will process your incorporation in an efficient and timely manner. Maybe you are familiar with LegalZoom, and it’s the first incorporation service you could think about, but there are many more options available.

IncFile) $49

IncFile ReviewIncFile is an experienced and credible online incorporation provider that started in 2004. It has assisted 50,000 entrepreneurs and is best known for being the most affordable online incorporation service on the market.

You can count on IncFile to do the incorporation process for you, plus you get to take advantage of other services such as a free Registered Agent service, a one-on-one business tax consultation and unlimited phone and email support. If you need more information, you can read our review!

CorpNet) $79

CorpNet ReviewCorpNet is a great option if you’re looking for an online incorporation service as the company has an A+ BBB rating since 2009 and a lot of happy customers.

CorpNet offers a lot of free services such as free business consultations, free trademark search and free business name search. It boasts of a 24-hour document preparation so you can get your business incorporated in the fastest possible time. You can read our review for more info!

Rocket Lawyer) $99

Rocket Lawyer ReviewRocket Lawyer is another LegalZoom alternative you can look into. They’ll give you full assistance on deciding which business structure is right for you, get your legal documents prepared on your behalf and do the whole incorporation process.

You can read our in depth review for more information.


Wrapping Up and Incorporating a Business in Alabama

Wrapping Up and Starting a BusinessIncorporating your business is very important and you should never have second thoughts about this. To protect your company and ensure its continuation and to build its credibility, you should incorporate your business in Alabama.

Whether you want to use an incorporation provider or handle the incorporation yourself, it’s up for you to decide!

Every incorporation provider is unique. They have different features and what might be present in one provider may be lacking in the other. It is best that you look into every incorporation provider closely, so that at the end of the day you’ll be able to make the right choice.

About Liesha Petrovich

Liesha is a small business owner of 20 years, host of Startup Savant, the owner of a karate dojo in Maine, and creator of Work Mobly. During free time she's with her family and working on a Doctorate in Entrepreneurship.