Alabama continues to strengthen the protection afforded to small businesses through various laws and amendments. You can improve your profit-making abilities by having a better understanding of the laws impacting businesses.
Although you may be an expert in your industry, identifying and interpreting the laws that apply to your business requires in-depth professional knowledge. An experienced business law attorney can help assess your current business structure and make the right recommendations as per the law to protect your business interests.
Alabama Business Corporation Law
For several years, litigators and experts asked for a revision of the Model Act (the “Revised Model Act”). The new Alabama Business Corporation Law makes it mandatory for all corporations to follow the new rules from January 1st, 2021. The new law states that you can now incorporate a corporation by filing a Certificate of Incorporation with the Secretary of State u/s 10A-2A-2.01.
Articles of Incorporation, under the old law, were filed at the county level with a probate judge. Stockholders no longer have a preemptive right to acquire unissued stocks of a corporation except to the extent to which the Certificate of Incorporation provides so. The Certificate of Incorporation can contain a provision eliminating or limiting the duty of a director or a person to offer business opportunities to the corporation instead of themselves.
Alabama Antitrust Laws
Consumers and companies don’t always see eye-to-eye regarding the best price for a particular product or service. The Yellowhammer State has specific laws designed to ensure fair, transparent, and competitive pricing. Antitrust laws are to ensure that open markets are protected and collusion between companies is discouraged.
It is important to have a deep understanding of anti-trust laws since certain mergers and acquisitions may be deemed illegal if they give companies an unfair advantage over others.
Alabama Deceptive Trade Practices Laws
Misleading tactics or fake representations are deemed illegal under Alabama Deceptive Trade Practices Law. These laws are meant to protect the consumer and to ensure businesses don’t cheat their customers. It’s critical to note that Alabama has not completely adopted the terms listed within Uniform Deceptive Trade Practices Act. Pertaining to this, the state has several statutes that prohibit shady sales practices.
Intellectual Property Laws
Intellectual property refers to intangible property, such as trademarks, copyrights, patents, and trade secrets. All businesses in Alabama are required to follow the guidelines laid down by the US Patent and Trademark Office (USPTO). Trademarks are the face and heart of a business. It is the first thing a customer sees when interacting with the business.
Trademarks represent “goodwill,” reputation, and the quality of the company. Patents protect the right of investors. They allow the patent owner to stop others from using, making, or selling their invention. You can protect your business interests by having a deep understanding of these laws.
Alabama Business Income Tax
All businesses in the state are required to file an annual income tax return unless they are a partnership. Alabama has corporate income tax and business privilege tax with different rates.
Your business can be subject to neither, one, or both of these taxes depending on the legal structure. In addition, any income from the business passing through to you personally will be subject to your personal tax return.
Besides business income tax, you should also be aware of employment tax and excise tax. You are required to pay Social Security and Medicare taxes and Federal unemployment (FUTA) tax if your business employs workers.
You are also required to withhold federal income tax. Excise tax comes into the picture only if you are operating a specific type of business or selling specific products.
Alabama Labor & Employment Law
Alabama is an at-will state where employment is concerned. This means that both the employee and the employer are allowed to terminate an employment relationship for any reason. Pertaining to this, you cannot remove an employee at will under Alabama law if they are protected under anti-discrimination laws, anti-retaliation laws, and whistleblower protection.
Employment or labor laws cover the rights of employees and the responsibilities of employers. Most of these apply only if the business has a certain number of employees.
Alabama code recognizes the following laws:
- Right to Work Laws (Ala. Code § 25-7-30)
- Immigration Verification (Ala. Code. § 31-13-15)
- Drug Testing (Ala. Code § 25-5-330)
- Jury Duty Leave (Ala. Code § 12-16-8)
- Voting Leave (Ala. Code § 17-1-5)
- Parental Leave (obligations set forth by the Pregnancy Discrimination Act and the Family and Medical Leave Act)
- Alabama Workers’ Compensation Act
Other Important Laws
There are certain laws that don’t apply to all businesses in general. It’s recommended that you speak with a knowledgeable business attorney regarding healthcare laws, advertising laws, privacy laws, and bankruptcy laws to find out how any of these laws may apply to your specific business.
Choose a Skilled Business Law Attorney to Protect Your Business and Financial Interests
The experienced business law attorneys at the Birmingham Law Group offer strategic counsel, efficient execution, and innovative solutions to counter any legal hurdles that you may encounter in your business. Whether you are a fledgling business unsure of the right structure or an established entity, our attorneys can help with any problems you may face.
To set up your free initial consultation, call us at (205) 964-9764 or reach us online.