Businesses in many occupations in Alabama, as well as the rest of the country, are required to be licensed and bonded. These types of bonds, called surety bonds are used to ensure compensation of a client or individual that the bonded company has wronged or done harm to.
Businesses in many occupations in Alabama, as well as the rest of the country, are required to be licensed and bonded. These types of bonds, called surety bonds are used to ensure compensation of a client or individual that the bonded company has wronged or done harm to. The specific process for a business in Alabama to get bonded varies widely among occupations and location. Companies can also choose to get licensed and bonded as a marketing ploy to gain the trust of potential clients.
Find out the bond requirements for your business. Start by inquiring from the city clerk. If the clerk does not know, seek help from any occupational or industrial organization that represents the type of services your business provides. If all else fails, contact the Alabama Securities Commission.
Obtain a license to be bonded. You must inquire about the licensing requirements from the local body that regulates bonds. This varies widely. For example, debt solution businesses and those conducting the sale of checks must file Form SA with supporting documents. Other towns and occupations may require exams, financial proof and other information. A license ensures that you are fully aware of the rules of ethical business practices in Alabama. A license is required before getting a surety bond.
Apply for a surety bond. There are many independent companies in Alabama that provide surety bonds. Much like applying for a loan, a bond seeker must have a good credit history and provide certain financial information.
Sign the indemnity agreement after being approved by the independent surety bond producer. This legally obligates you to the requirements of the bond. You will have to pay a premium, but this cost varies depending on the type of bond.
Send the necessary documents proving that your business holds a surety bond to the obligee, which is the body that requires that you get bonded. This can be the city clerk, industry organization or Alabama Securities Commission.