Legal guidance for Alabama entrepreneurs and small business owners, from formation and contracts to ongoing counsel and business succession. Serving Birmingham, Mountain Brook, Hoover, and across Alabama.
Schedule a Consultation Call (205) 202-9801Starting and running a small business in Alabama takes courage, vision, and hard work. At Colvin & Sawyer Law Offices, we provide practical business legal counsel for entrepreneurs and small business owners across Birmingham, Mountain Brook, Hoover, Vestavia Hills, Homewood, and throughout Alabama.
Christopher Colvin is not just a business attorney, he is a former small business owner himself. He understands the realities of running a business in Alabama from the inside out.
"The best time to get an attorney involved in your business is before you need one. The right legal foundation protects everything you build on top of it."
Most Alabama business questions start with structure. If you are deciding how to organize, start with sole proprietor versus LLC in Alabama, then talk to us about the right fit.
Name reservation, Certificate of Formation, registered agent, EIN, and the operating agreement that should come with them. See how to form an LLC in Alabama.
Alabama corporations, S-Corps and C-Corps, with articles of incorporation, bylaws, initial resolutions, and state compliance handled from the start.
Choosing the structure affects taxes, liability, and flexibility for years. We help owners choose, and plan for the S-Corp election many LLCs eventually benefit from. See LLC versus corporation in Alabama.
Custom agreements that set ownership, voting, distributions, buyouts, and what happens when members disagree. See Alabama LLC operating agreements.
Drafting, review, and negotiation across the agreements a company actually runs on. See contract drafting and review.
What happens to the business when you retire, become incapacitated, or die. See business succession planning.
This is worth stating plainly, because a great deal of published guidance about Alabama is out of date and still circulating.
Everything is filed with the Alabama Secretary of State. Since 1 January 2021, under Act 2020-73, there is no separate county probate court filing for LLCs. Older articles, and some formation services, still describe a county step. It no longer exists, and skipping it does not leave you non-compliant.
Alabama does still have two steps, but they are both at the state level:
For the filing detail and current state fees, see the Alabama Certificate of Formation.
Alabama law defines a limited liability company agreement as any agreement among members, written, oral, or implied. Something governs your LLC whether you wrote it down or not. If you did not, the statutory defaults fill the gaps, and they are rarely what owners assume.
Two defaults surprise people most:
A drafted agreement sets ownership percentages, voting thresholds, what happens when a member wants out, how the interest is valued, and what happens on death, disability, or deadlock. It is far cheaper to agree those terms while everyone is still friendly.
Starting a business, or need counsel for an existing Alabama company?
Call Colvin & Sawyer Law Offices at (205) 202-9801 or send us a message. We serve business owners across Birmingham, Jefferson County, Shelby County, and all of Alabama.Forming the entity is the easy part. Keeping it in good standing is the part that quietly goes wrong.
Alabama imposes an annual Business Privilege Tax calculated on net worth, at a rate that varies with federal taxable income. Two changes matter and are widely misreported:
New entities have their own deadline: the initial return is due within two and a half months of formation, and no extension exists for it. Full detail on rates, brackets, forms and dates in our guide to the Alabama Business Privilege Tax.
See Alabama LLC requirements for the full compliance picture.
Most business disputes trace back to a document nobody read closely. We draft, review, and negotiate the agreements a company depends on: partnership and shareholder agreements, master service agreements, vendor and supplier contracts, commercial leases, employment and contractor agreements, NDAs, and purchase agreements.
Two clauses deserve particular attention in Alabama. Personal guarantees put you behind an obligation the entity was created to carry, and they turn up in leases and credit agreements more often than owners expect. Restrictive covenants operate unusually here: Alabama voids restraints on a lawful profession, trade, or business by default and then allows six narrow exceptions, so a non-compete may carry far less force than the document implies. See personal guarantees and non-compete enforceability in Alabama.
Businesses change hands and change shape. The moments worth planning for, ideally before they arrive:
This is where business law and estate planning meet. An owner's company and personal plan should be built to fit together rather than drafted in separate rooms. See business succession planning and wills and estate planning.
It depends, and we will tell you what it depends on rather than leaving you guessing. The drivers:
State filing fees are set by the Secretary of State and are separate from legal fees. We explain the expected scope and cost at the consultation, before any work begins.
Christopher Colvin founded Colvin & Sawyer Law Offices and practiced as a small business owner before he practiced law, so he advises Alabama entrepreneurs with a working understanding of what actually keeps a business running. He handles entity selection, operating agreements, contracts, and succession planning, and keeps clients current with Alabama filing and compliance requirements as they change.
He coordinates business matters with the firm's contract drafting and review and estate planning work, so an owner's company and personal plan are built to fit together.
"Fast, efficient, and made the entire process so much less stressful. From the beginning, they took a huge weight off my shoulders and handled everything with professionalism and confidence. I highly recommend them to anyone looking for an outstanding attorney."
Reserve the name with the Alabama Secretary of State, then file the Certificate of Formation with the Secretary of State. Both steps are at the state level. Since 1 January 2021 there is no separate county probate court filing for LLCs, so guidance that mentions one is out of date. After formation you will also want an operating agreement, an EIN, a business bank account, and the initial Business Privilege Tax return where one is owed.
No. That requirement was eliminated effective 1 January 2021 by Act 2020-73. Everything is filed with the Alabama Secretary of State. If a formation service or an older article told you a county filing was missed, that is not a compliance gap, because the step no longer exists.
For most small businesses an LLC is the better starting point: liability protection, pass-through taxation, and simpler administration. As profits grow, an S-Corp election can change the arithmetic meaningfully. The right answer depends on how many owners there are, how profit is taken out, and what you expect the business to look like in five years.
The state does not require you to file one, and an LLC exists without it. But Alabama law treats any agreement among members as the LLC agreement, written, oral, or implied, so something governs the company either way. Without a written agreement, statutory defaults apply, including equal sharing of distributions regardless of what each member contributed.
Without an agreement that anticipates it, you may have a genuine standstill. Alabama's default rules require unanimity for major decisions, including amending the agreement itself, so two equal members who disagree can find neither able to act. A drafted operating agreement sets out deadlock procedures, buyout mechanics, and a valuation method before anyone needs them.
Not any more. For tax years beginning after 31 December 2023, if the calculated tax comes to $100 or less, the entity is fully exempt from both the tax and the filing requirement for that year. The obligation continues as long as the entity exists, so it is assessed annually, but many small entities now owe nothing and file nothing. The separate annual report was repealed effective 1 October 2024.
Within two and a half months of formation, and there is no extension available for the initial return. It is one of the more commonly missed deadlines for new Alabama entities, because it arrives well before the first annual return would.
Forming an entity means you are not personally liable simply for being an owner. That protection has limits. You remain responsible for your own conduct, for obligations you sign personally, and for certain statutory liabilities. The most common way owners become personally liable is by signing a personal guarantee, which turns up routinely in commercial leases and credit agreements.
Sometimes, but Alabama starts from the opposite position to most states. Contracts restraining a lawful profession, trade, or business are void unless they fit one of six statutory exceptions, and those are allowed only to preserve a protectable interest. Restraints of two years or less are presumed reasonable for an employee non-compete. Drafting narrowly matters more here than drafting broadly.
Both. Some owners need a formation and a set of documents and are done. Others want someone familiar with the business to call before signing a lease, taking on a partner, or making an offer. We work either way, and we will tell you honestly which one your situation actually needs.
Yes. Our office is in Mountain Brook and we work with businesses across Jefferson and Shelby counties, including Hoover, Vestavia Hills, Homewood, Alabaster, Pelham, Helena, Chelsea, Trussville, Gardendale and Bessemer, as well as Montgomery and elsewhere in Alabama.
Whatever exists. Formation documents if the entity is already set up, any operating or partnership agreement, the contracts you are working under, and any document someone has asked you to sign. If nothing exists yet, come with the idea and who is involved. Both are perfectly normal starting points.
Our office is at 4 Office Park Circle in Mountain Brook, and we work with business owners throughout Jefferson County, Shelby County, and across Alabama. If you are looking for a business or corporate attorney nearby:
Related services: contract drafting and review, business succession planning, and wills and estate planning.
Christopher Colvin and Valerie Sawyer serve clients throughout Birmingham, Mountain Brook, Hoover, Vestavia Hills, Homewood, Alabaster, Pelham, Helena, Chelsea, Trussville, Gardendale, Bessemer, and Montgomery.
Schedule a Consultation Call (205) 202-9801