With a low tax burden and affordable cost of labor, Alabama offers a range of benefits for business owners. But before you open your doors, your business needs a unique name that conveys your value. However, Alabama does have rules about choosing a name and what is available. Read on to understand how to find the right name for your business.
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How to check business name availability in Alabama
A business name should be unique and available. How do you know if the name you want is available in Alabama? Like most states, Alabama has a searchable database that you can use to check name availability. Here’s how to use it:
1. Visit the Alabama Secretary of State website
The Alabama Secretary of State has a registry of all Alabama businesses. You can use the Entity Name option on the state’s Government Records Inquiry System to search these records and ensure your name isn’t already registered.
2. Search the name you want
When you choose Entity Name, you will be able to enter a number of criteria into the search. While you only need to include the name, you can use other parameters like the type or location of the business. If your name is multiple words or includes punctuation, try searching a few versions of the name to get a full view of the results.
3. Review the records
You will be able to see the records for any entities matching the criteria you have chosen. You can sort through these pages to see what similar records exist and what their status is. If nothing is returned in your search, there is no similar name. Meaning your name is available.
4. Ensure your name is different enough
Even if you see a similar name on the list, you might not be able to use it. Your business name must be “distinguishably different” from another. Adding things like an abbreviation or a symbol is not considered a sufficient differentiator between business names. If your name is too similar, it will not be approved by the state.
5. Consider reserving a name
After running an Alabama business name search, you have two options: You can reserve a name or you can register the name. You should reserve the name if you aren’t planning to set up the business immediately.
Alabama allows business owners to reserve a name for up to one year and a fee of $10 by mail or $28 online.
To do so, you’ll fill out a quick form and provide the payment.
Again, you don’t need to reserve a name if you plan to officially set up your business with the state of Alabama, but if you’re just doing some homework and plan to set up your business later, reserve the name now so it’s not taken when you’re ready.
6. Check domain name availability
We created a tool that makes it easy.
How to name your Alabama business
Now that you know a little more about the business landscape in the state, it’s time to start generating a list of names for your business. To do so, follow these steps:
1. Write down basic details about your business
Start by creating a verbal picture of your business. Think about what your business will offer and who it will serve. Will you sell a specific product or service? Who’s going to buy it? Jot down a few details about your company as a starting point.
Next, start creating a list of adjectives that describe your business. Think in terms of keywords. What keywords would your customer use to find the product or service that you offer? Write them down.
2. Stay away from initials and hard-to-say words
There are plenty of businesses that include initials, like A&J Plumbing, but consider upping your game with something a bit more creative and descriptive.
The same goes for names that are hard to say. If your last name is Stackowaski, for example, it’s not conducive to a business name because it’s too hard to pronounce.
3. Don’t pigeon-hole your business
Be careful not to select a name that limits your company’s potential growth. Think about where your business will be in five, ten, even twenty years, and take that into consideration when creating a name.
A company named Bob’s Bargain Books, for example, is a good name, but what if they plan to sell vintage records and cassettes down the road? The name only refers to books, so when vintage music is added people won’t associate it with the store.
4. Consider using a name generator
At this point, you probably have a list of a few ideas. Rather than brainstorm a bunch of different combinations, why not try a name generator? You simply enter a few of the adjectives that you came up with into the search bar and you’ll get a list of possible names.
Name generators can take some of the hassles out of creating a name. Most name generators will only show you available names too, which is helpful.
Check out some of Namechk’s name generators below:
What kind of business structure is right for your Alabama company?
As you research available business names in Alabama, you’ll also want to think about what kind of business you want to establish. There are a handful of options to choose from, but some of the most common are Sole proprietorship and LLC.
- A sole proprietorship is ideal for small businesses with no employees that want to test their business out. There’s virtually no paperwork to set up this kind of business, which is a plus. However, a sole proprietorship is not a separate business entity, which means you’re financially and legally responsible for any problems that might arise.
- An LLC, or limited liability company, provides a certain amount of liability protection. Your personal assets and your business are separate with this business structure, which means if the business is sued or goes bankrupt, you will not be forced to use your personal cash reserves to bail the business out.
Steps to register your Alabama business
Ready to set up your business in Alabama? Here’s what you do:
1. File your Certificate of Formation
Visit the Alabama Secretary of State website and fill out the Certificate of Formation. To fill this out, you’ll need to have an available business name, address, and contact information.
2. Name a registered agent
You’ll also need to name a registered agent. A registered agent is the point-person for your company who will receive important documents like tax notices or legal documents.
A registered agent must be trustworthy and be available during regular business hours when documents are delivered. The business owner can serve as the registered agent in Alabama, or another person or company can be named.
You might decide to name your accountant or co-founder, for example. You can also hire a registered agent service to serve in this role. Northwest Registered Agent, ZenBusiness, and Bizee are a few examples. These companies will receive documents on your behalf and notify you of their arrival.
3. Pay the filing fee
Every state charges a filing fee to file LLC formation documents with the government. In Alabama, this will cost $200 and can be done online or by mail.
4. Wait for approval
Alabama will review your application and has a processing time of 10 days, though a fee can be paid for expedited approval. Once approved, your business is officially set up.
Our picks of the best registered agent services
Alabama small business facts
Small businesses are important to the economy of every state but can vary in the number and type of businesses based on environmental factors. Below are some facts about small businesses in Alabama according to the U.S. Small Business Administration:
- There are over 400,000 small businesses in Alabama as of 2020
- 6% of all self-employed Alabama residents are immigrant entrepreneurs
- Over 99.4% of businesses in Alabama are considered small businesses, and 47.5% of state employees work for a small business
- The most popular industry for small businesses in Alabama is construction, with the second most popular being administrative, support, and waste management
- In 2019, small businesses added over 23,000 new jobs to the state
FAQs
To further help entrepreneurs, check out these frequently asked questions about starting a business in Alabama:
Why is it so important to check on business name availability?
Alabama will not allow two businesses in the state to have the same name. There are many reasons for this, but at its core, it’s to avoid any confusion. For example, if someone plans to sue Bob’s Fruit Stand and there are two of these companies in the state, things can get complicated quickly.
All businesses must have a unique name. And, you can’t just add a hyphen to a name to make it different. Each name must be “distinguishingly different.”
Do I need an operating agreement for my LLC?
An operating agreement, or limited liability company agreement, is not required in Alabama. This is a legal document that outlines the ownership and operating procedures for a company. When this is done properly, it provides a formal guideline that ensures all business stakeholders are on the same page, reducing the risk of future conflict. Though this is not a requirement, it can be good business practice.
How do I get an EIN?
An EIN, or employer identification number, is a nine-digit number assigned by the IRS to identify a business for tax purposes. You can think of it as a social security number for businesses. Before you can open a bank account, file federal or state taxes, or hire any employees, you need to have an EIN. To get your EIN, you will file online or by mail through the IRS.
Is an LLC the best kind of business to start?
The type of business you start can vary based on who is involved in the business, what you plan to do, and what makes the most sense financially. An LLC is a limited liability corporation, which gives small businesses the same rights as a large corporation, without as much work needed to open their doors.
An LLC can be used for almost any type of business no matter the size and offers benefits like asset protection, pass-through taxation, and flexibility that other business formats do not offer.
What is “Doing Business As”?
A DBA, which stands for “Doing Business As” is one way that you can form an Alabama business if the name you chose is taken. This allows you to form your LLC under one name but operate to the public under another. This should be done carefully, as you still don’t want to choose a name that can be confused for another business. You would continue to file all formal paperwork under the name of your LLC that was filed with the state.
Can I change my business’s name later?
If you want to change your business’s name at a later date, you will have to file an amendment with the Secretary of State. To do so, you will provide an original and two copies of the Domestic LLC Amendment to Formation/Organization Form and include the original signature of the filer.
There will be a $50 fee and you must check for the additional recording fee in the county where the LLC was formed by contacting the office of the probate judge. This fee will vary by county. Before submitting this form, make sure the new name you have chosen is available and complies with all rules.
How do I ensure no one else uses my business name?
Once you are on the registry with the state, anyone looking to start a business will see this and have to choose a different name. However, someone in another state could still use the name. One way to prevent others from using your name is to seek a trademark through the US Patent and Trademark Office. You can also check their database to see if your name has been trademarked.
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