Starting a Business? – A few Tips on Doing it Legally
If you are planning on starting a business it is imperative to have all the legal paperwork done.
Let’s take a look at what needs to be covered in order to have a legal business entity.
Firstly, you need to have a company license, a house profession license, if running your company from house, a city or county license, (depending what State you live in). However, if you are not using your name as the company name and you want to register your business with a fictitious name you will have to register it appropriately.
When opening a business in your residence, extra info is needed. Some companies need more than a city license to be completely accredited. Kindly check with your regional city & state office for comprehensive details.
While there are many businesses who are running “under the table”, so to speak, It is advisable not to do so. If you are just thinking about selling a few things from your home, do not worry too much, as you should not have any tax liability for selling your very own belongings. Nevertheless, if you begin a company to make some money, you have to take a look at the legal aspects of running a business. Ultimately, those who operate under the table will fall into trouble.
If you are running an internet company, it is not as anonymous as some people might think. Keep in mind, the government created the Web in the first place! They understand how it works! Legalize it, and you will certainly sleep much better at night!
Legalizing a business is not as complexed as you may believe, so don’t stress!
Follow the steps below so you can get started:
1. Figure out the kind of home based business you want to start. Sole Proprietorship, Partnership or Corporation.
A Sole Proprietorship is the least expensive and least complex way to set up your company. Remember that a Sole Proprietorship is totally reliant upon your ability to work and have smart ideas for growth. There is no other personnel in business to rely on.
A partnership happens when 2 or more business owners form a business. Legal fees for establishing such an arrangement are typically more expensive than those needed for a Sole Proprietorship and less costly than a Corporation. The upside of a Partnership is more capital for growth and more ideas for how to grow the business. The disadvantage is getting rid of a bad partner when you might need to.
A Corporation is the most complicated and most costly of the three options. The ongoing accounting, legal, and tax reporting obligations of the Corporation are much more complex than for the other two alternatives. Corporations have boards, shareholders, and shared obligation for business. You are obliged to keep everyone notified of decisions, the company’s financial condition, and a host of other actions.
It is a smart thing to use the services of a lawyer when planning to set up a business. A lawyer will assist your choice about exactly what legal form your business needs to take. This will also help you avoid any future issues.
2. If using a fictitious name for business, it needs to be registered first with the state. Call your city & state office to find out their contact number. Typically, you can do this online. Have a look at their website and complete a fictitious name registration application.
3. Is your home located in the city? Some states like Florida need a county license if your business isn’t located in the city. If not sure, contact your local council for licensing details.
4. Completing the home business application and business license application. You could download the forms from your local government website. Call your city hall to ask for their website address and charges.
5. Forward your applications and charges to your city hall office either by mail or by going to the office. They will usually accept cash, checks, debit cards, VISA, MasterCard or American Express credit cards. Again, check with your regional city hall office.
If you visit the city hall in person, you will get your business licenses the very same day. However, if you do all this by mail, you would need to wait a minimum of 2 to 3 weeks to get your licenses. In either case, you are on the ideal track.