(c) Copyright 2006
Elias Stassinos, Esq.
Here's a really
simple way... to start your business.
If you are starting
a business, you will need one or more business licenses and tax ids.
After reading this article you will know what business licenses you need
to start a business.
First, regardless of
the business you are starting, you will need a business license.
There are some
businesses that don't need one but that's
only 1% or less
compared to the percentage of businesses that need a business license.
So, regardless of whether you business is a home-based business, an
online internet business, a contractor's business, or a professional's
business, such as a doctor's medical office, you need a business
license. The business license requirement is a requirement in addition
to a required license you might need from the state if you are a
professional such as an attorney or hairdresser. Depending on the
location of your business, or the type of business, the business is
filed at the state, county or municipal level of government.
Second, if you using
a business name that does not include your last name, you need to file a
DBA (Doing Business As).
If your business
name includes you last name but also includes a suffix such as "& CO" or
"& Associates" or anything that denotes additional business owners, you
need to file a DBA. You can also file a corporation or LLC instead of
filing a DBA, but that may be a little more expensive. However, even if
you file a Corporation or LLC, and the corporation name or LLC name is
different from the business name you will use to conduct business, you
need to file a DBA.
Third, if your
business sells or leases taxable items or services, you will need to
obtain a state sales tax id number (also called a seller's permit,
wholesale license, retail license or resale permit).
You will need a
sales tax id number to buy wholesale, or if you are a wholesaler, you
will need it to sell wholesale. For example, if you have a toy
store, you will be able to buy wholesale without paying any taxes for
the toys to the wholesaler and, subsequently, charging taxes to your
customers when you sell the toys.
Fourth, if you will
hire employees, you will need to obtain a federal employer tax
identification number as well as a state employer tax identification
These numbers are
required if you are an employer.
Employment taxes are
paid both to the federal and to the state government.
Fifth, if you are
planning to run a serious company, you need to perform a nationwide
business name search.
If you become a
nationwide company, you may need to insure that no one else is using the
business name you are going to use for you company. The way to acquire
rights to the use of a business name is by selling specific products or
providing specific services and using a specific business name in a
certain small region or large one, such as a nationwide area. For
example, if you sell
furniture in Minnesota under the business name
Furniture," you acquire some rights to the business name in Minnesota.
If another company in Minnesota decides to sell
the same type of
furniture with your business name, you can sue them to enjoin them from
using your business name.
Sixth, get the
cheapest business insurance available: incorporate your business or form
a Limited Liability Company (LLC).
You are not required
to incorporate or form an LLC but it is a very good idea to do so
because a corporation or LLC is a separate "person" or legal entity.
Filing a DBA, does not protect your personal assets. However, if you
incorporate or form an LLC, and someone sues your corporation and
obtains an unfavorable judgment against your corporation, he or she can
only execute the judgment against the corporate assets -- not your
personal assets such as your home.
forming an LLC is the best way to protect your own personal assets.
The last step is to
take your DBA or corporate certificate to a bank and use it to open a
business checking account and a merchant account.
You will need these
accounts to cash business checks written out to your company name as
well as use the merchant account to run credit card transactions.
You can hire an
attorney to file your business documents, a less expensive legal
service or you can do it alone.
After obtaining the
required business licenses discussed above, and opening your business
accounts, you are legally able to start business operations. As an
attorney, I have set-up quite a few small businesses and, invariably,
they needed at least two or three of the above business licenses or tax
id numbers. Having filed all the required business licenses will give
you peace of mind to pursue other business activities such as promoting
your business and providing customer support.
File all required
business licenses for your business and start making money!
Esquire is a trademark and incorporation attorney that has assisted
thousands of small business owners and entrepreneurs launch their first
Visit his law firm Website: http://www.stassinos.com
All legal articles in this site
are general and informative. The articles or any other information on this
site is not legal advice nor is any information warranted or guaranteed.
Laws change over time and in different localities and jurisdictions laws may
be different from any laws mentioned on this site. It is advisable that you
consult a attorney and or an accountant in the area where your business
will be located.