Starting a Business: Legal Requirements
Starting a new business can be overwhelming or terrifying as you try to figure out what you need to do to protect yourself, your assets, and your business. To add to the stress, you need to ensure the business is starting to grow and your business plan is being followed. So, the question then, is what do you need to do to ensure your business is meeting the legal requirements?
Register Your Business
There are a few different types of business structures which you need to choose from. These include corporation, limited liability company, partnership, and sole proprietor. This will dictate the type of paperwork you need to do to register the business with your state secretary’s office.
In addition, you will need to check with the same office to see if the state requires you to carry a state business license. Some states do not require it, but the type of business you are starting may require some state regulation.
Local and Federal Business Licenses
Some counties or localities will require you to obtain a license to operate within the area. The county clerk’s office will give you guidance and help you pass this hurdle, just don’t miss this step as it will be key in you legally running your business in your county.
You may also want to look at the need for a federal business license. This is not common and will generally only apply to you if you are going to sell alcohol, firearms, tobacco, are manufacturing prescription drugs or providing investment advice.
Federal Employer ID and Tax Permits
The IRS will require that you have an EIN for tax purposes. This is especially true if you are hiring employees. You will need to complete the SS-4 Form and submit it to the IRS. If you sale Taxable products you will need to obtain sales and use tax permit. This varies by state, so check with the Department of Revenue for your specific state’s requirements.
Business Permits
There are several other permits you will need to consider as well. These will be required based on the type of business you are running. This range from zoning permits for home-based businesses to seller’s permits for reselling wholesale merchandise or a health permit for food preparation.
In Closing
Each of these rules is going to require additional research on your part. It is advisable that you get some help from someone that is familiar with what you are looking to do so you make sure everything is legally in line. Generally, a business lawyer is your best bet. While you can do this on your own, it may be more beneficial to work with someone that has a high level of expertise in the field, if for no other reason to ensure that you are not missing anything as you get ready to open your doors.
Photo Credit: Shutterstock/Africa-Studio