Know who you are doing business with
You would be shocked how many times I get a contract and there is a company name with LLC or Inc after it and I check with the state of Alabama and there is no such company registered to do business in the state of Alabama. There are very few companies that are allowed to operate in Alabama without registering with the Alabama Secretary of State’s office. You should take the time to verify that a company is registered to do business in Alabama. To verify go to the Secretary of State’s website and click on Business Records and put in the name as it has been given to you.
Why is it important for you to check and see if the business is registered to do business in Alabama?
First, you need to confirm the name of the company that you are doing business with is able to conduct business in Alabama. If you are purchasing equipment, property, or a purchase that involves a large amount of money, you need to make sure that company is able to sell in Alabama, are set up to pay the taxes on what it sells you and actually owns what it is selling to you. It is important that who is selling you assets own those assets and that there is not a lien on the assets being sold. It becomes a big headache if there is a lien on the goods that you just paid money for and the Alabama Department of Revenue comes knocking on your door asking for the taxes that were secured by the lien on what you just purchased.
Many companies from out of state do business in Alabama through the internet and by shipping into the state. Unfortunately, it makes it difficult in dealing with that company if there is a problem and you have to sue them. It is important that any company that is doing business in Alabama registers as doing business in Alabama. If the company was supposed to have collected sales tax on your purchase but did not, then you can be held liable by the Alabama Department of Revenue and local taxing agencies for that tax.
If you represent an out of state company in Alabama here is why it is important to make sure they are registered to do business in Alabama. IF they are not registered, the out of state entity transacting business in this state, except a corporation or other organization formed under federal law, may not maintain any action, suit, or proceeding in any court of this state until it has registered in this state. Alabama’s Attorney General may bring an action to restrain an out of state entity from transacting business in Alabama until they are registered.
Make sure that you are Operating your Business under the Proper Legal Name
Just because you have been using a corporate or LLC name for years does not mean you are using the correct legal name. Just as you need to check to make sure that the name of the company you are doing business with is correct you need to verify that the name you are using is the correct legal name. To verify go to the Secretary of State’s website and click on Business Records and put in the name as it has been given to you.
If you are not using the correct legal name of your corporation or LLC and the entity gets sued you could be held personally liable. If that incorrect name is put on documents such as deeds or titles then it could cause you problems when you attempt to transfer or sell the asset.
It is important that you take the time to make sure you are doing business in a way that if there is a problem that you are able to protect what you have built and can recover what is owed to you.
Be prepared to protect your business. If you have any questions feel free to call the Aaron Law Firm at (205) 685-8383.