Summary
A mid-year legal checklist for Gulf Coast business owners covering five areas that commonly get deferred during busy seasons: Alabama LLC entity standing and Business Privilege Tax compliance, independent contractor relationship review, key contract audit for upcoming renewals and auto-renewal clauses, employment documentation and handbook currency, and privacy policy alignment with the Alabama Personal Data Protection Act ahead of the May 2027 deadline. Each check includes the specific legal exposure it addresses and what catching it now costs versus addressing it after a problem surfaces. Closes with a Risk-Free Strategy Session CTA.
By: Jordan Gerheim, CEO – Outside Chief Legal LLC
More than half the year is behind you. You have a clearer picture of how the year is tracking. There are a handful of legal and compliance items that tend to get pushed to the back burner during busy stretches that are worth pulling forward before August.
None of these are complicated. Most take less time than you expect. And catching any one of them now costs a fraction of what it costs to deal with it after something goes wrong.
Here are five things worth checking before August.
Check 1: Your Business Privilege Tax Filing and Entity Standing
Alabama does not have a traditional annual report with the Secretary of State. Instead, the state rolls its annual reporting requirement into the Business Privilege Tax return, Form PPT, for LLCs. The deadline for most multi‑member LLCs is March 15. For single‑member LLCs, it is April 15.
If either of those deadlines passed without a filing, your LLC is now accruing penalties and interest and may be at risk of administrative dissolution. An LLC that has been administratively dissolved does not provide the liability protection it was formed to create. The separation between your personal assets and your business obligations depends on the entity remaining in good standing.
The fix is straightforward. File the overdue return, pay the tax and any applicable penalties, and get the entity back into good standing before the issue compounds further. The minimum Business Privilege Tax for an Alabama LLC is 50 dollars. The cost of administrative dissolution and reinstatement is considerably higher.
Even if your filing is current, now is a good time to confirm it with your accountant and make sure the entity is being maintained correctly for the rest of the year.
Check 2: Your Contractor Relationships
If you work with independent contractors, mid‑year is a useful time to look at whether those relationships still qualify under the legal tests that actually govern classification.
The IRS and the Department of Labor both look at the actual working relationship, not just the contract. A worker who started as a true contractor but has become more integrated into daily operations over the past six months, taking direction from your team, working exclusively for your business, using your tools, and functioning like a full‑time staff member, may have drifted into employee territory without anyone making a conscious decision to change the arrangement.
The exposure from misclassification includes back payroll taxes, interest, penalties, and potential liability for benefits the worker should have received. The IRS can assess 1.5 percent of wages paid for failure to withhold income taxes, 40 percent of the FICA taxes that should have been withheld, and 100 percent of the employer’s share of FICA taxes. State penalties for Alabama unemployment and workers’ compensation purposes stack on top of that.
A mid‑year review of contractor relationships costs far less than a Department of Labor audit. If anything has changed in how those relationships operate day to day, that change is worth examining now.
Check 3: Your Key Contracts
Contracts have a tendency to get signed and forgotten. The agreement you signed with a vendor eighteen months ago may include auto‑renewal clauses, price‑adjustment provisions, or termination windows that are approaching without anyone tracking them.
A mid‑year contract review does not need to cover every document your business has ever signed. It needs to cover the agreements that carry the most financial exposure: your largest vendor relationships, your client service agreements, any leases, and any contracts that have been running long enough that the original terms may no longer reflect how the relationship actually works.
The practical question to ask about each one is whether the contract still reflects what both parties agreed to and what the current relationship looks like. A contract that made sense when you signed it but no longer matches how the work gets done is a dispute waiting to happen.
If you have contracts coming up for renewal in the second half of the year, now is the time to decide whether to renegotiate the terms rather than auto‑renew into language that was not built for your current situation.
Check 4: Your Employment Documentation
If you have employees, two things are worth reviewing before August. The first is whether your employee handbook is current. Employment law changes regularly, and a handbook that has not been updated in more than a year may contain policies that no longer reflect what Alabama employers are required or permitted to do under current federal guidance.
The second is whether your termination documentation practices are in order. If you have had any performance issues, disciplinary conversations, or attendance problems in the first half of the year, those situations need to be documented before they escalate. The businesses that end up in the most difficult positions with employment claims are almost never the ones that handled the situation badly. They are the ones that handled it correctly but had nothing in writing to show for it.
A Gulf Coast business owner who terminates an employee for repeated performance issues and has six months of documented conversations, written warnings, and performance plans in the file is in a defensible position. One who made the same decision but has no documentation is not, even if the underlying performance issues were real and consistent.
Check 5: Your Privacy Policy and Data Practices
Alabama’s Personal Data Protection Act was signed in April 2026 and takes effect May 1, 2027. If your business collects personal data from more than 25,000 Alabama consumers per year, a compliant privacy notice is going to be required. That threshold is lower than most other state privacy laws, and businesses with active websites, email lists, or customer loyalty programs may already be above that threshold.
Mid‑year is the right time to start this review rather than waiting until early 2027 when the deadline pressure is real. The starting point is a data map: what personal information your website collects, where it goes, and which vendors have access to it. From there, the gap between your current privacy policy and what the Alabama Personal Data Protection Act will require becomes visible and manageable.
Even for businesses below the coverage threshold, most major marketing and analytics platforms require a current privacy policy as a condition of their terms of service. Google Analytics, Meta Pixel, Mailchimp, and Klaviyo all include this requirement. A missing or outdated policy is an account risk as well as a compliance risk.
Getting the privacy policy current now, before the law takes effect and before a platform audit surfaces the issue, is a short project with long‑runway value.
A Practical Next Step
Working through this list on your own is possible for most of these items. For the ones that require a legal read, such as contractor classification, contract terms, or privacy compliance, having a clear picture of where you actually stand is more valuable than a general checklist.
A Risk‑Free Strategy Session with OCL is a practical way to get that picture. We look at your business across these five areas and tell you honestly where the coverage is solid and where the gaps are worth closing before they become something larger.
General information, not legal advice.
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Outside Chief Legal LLC is a modern, forward-thinking law firm serving as fractional chief legal officers and outside general counsel for businesses and their owners. With over 200 years of combined litigation, in-house, general counsel, and administrative legal experience, the firm delivers approachable, comprehensive counsel that blends legal expertise with practical business insight to help clients navigate ownership complexities with confidence. OCL is a trusted partner for founders, business owners, and leadership teams nationwide. Learn more about our firm, meet our team, or schedule a Risk-Free Strategy Session to talk with an attorney about how we can help your company.
