RESOURCES
Links to business information resources.

BUSINESS
Startup Checklist.I'm ready to start a business! I have a product/service and I'm sure that it will fly, so what do I do now?

FORMS
Here you will find the forms available for download from the City of Tuscaloosa, the City of Northport and Tuscaloosa County. Download Forms

STRUCTURES
Ways to set up a business.One of the key decisions to make after deciding to start you own business is what type of legal structure you should use to define the type of company you own.

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Opening a new business used to involve standing in long lines, asking the same questions to dozens of people and trying to decipher numerous forms and permits.
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Sole Proprietorship

A sole proprietorship is most commonly defined as a business owned and operated by a single person. Creating a sole proprietorship is quite simple. You will need to obtain the required licenses for this type of business and begin operation. The business may use a fictitious name, but the business does not have a separate legal existence apart from its owner under state law. Fictitious names must be registered with the Alabama Secretary of State if the sole proprietor is a for-profit business. Many small businesses operate as a sole proprietorship.

There is no need to file a separate income tax return for the proprietorship because the activity is reported on the owner’s federal and state individual income tax returns. Since a self-employed person is not an employee, there is no provision to withhold payroll taxes to cover federal, state, local and Social Security tax obligations of the proprietor/owner. If you are a self-employed sole proprietor, you must make quarterly estimated payments to provide for these tax liabilities. Here are some of the advantages and disadvantages.

Advantages

  • Ease of Formation
  • Sole Ownership of Profits
  • One Person has all of the decision making power
  • Profits are not directly taxed (since there is no separate legal entity)
  • Ease of discontinuing the business

In most cases, you are not required to obtain an Employer Identification Number (EIN) from the IRS unless you have employees

Disadvantages

  • There is unlimited personal liability. This means if you end up owing a lot of money to creditors they can come and take things like: your car and house if needed
  • Limited ability to raise capital for operating and building your business
  • The business is terminated upon the death of the owner
  • Profit is subject to self-employment tax