Starting a business can be a fun and exciting venture. Although, little do people know that before the fun starts, there has to be a slow period where you’re taking care of the legal aspect of the business. While it is unfortunate and, while it may be a hassle for some, the process of meeting the legal requirements isn’t at all complicated. This list will clear up everything for you.
● Business Structure and Name
Before you do anything, you will need to define your business in the eye of the government and the tax authorities. A business structure, of which there are set types with qualifications, decides how your business operates, how your tax payments are calculated, and what happens in case you go bankrupt or if you accumulate debt. For example, a limited liability company guarantees that your private money is going to be forever separated from your business assets, so if you ever go bankrupt, your private funds will remain protected. After that, pick a name for your business, then officially file it with your state’s Patent and Trademark office. Though, you have to make sure it’s not already taken.
● Federal Tax ID Number
In order to legally operate as a business, sell, buy, hire, and fire, you’ll need to straighten your affairs with the tax authorities. That’s why you need to apply for an ID number with the IRS. Though, don’t show up there without having enough information. As we said, different types of businesses get taxed differently. After learning about the tax laws, you might want to switch from a partnership to an LLC so, before you decide on a concrete business structure, see if forming an LLC makes sense for you when it comes to tax calculation methods and other factors. In case you don’t know, tax laws differ from state to state, so don’t forget to check your state’s tax laws before you make any big decisions.
Any business is prone to accidents. Legally, you are required to have your workers insured which is why you need to take a look at the employment laws first to understand which types of insurance are necessary and which are optional. In addition, it is preferred that you protect your business by purchasing liability insurance to protect your business from financial loss, property damage, and unwanted lawsuits.
● Licenses and Permits
For each business, depending on the industry and the state in which it operates, there are certain permissions that need to be obtained. It is your duty to learn more about your needed permits, then take the necessary steps towards acquiring them.
As you see, the process is quite simple and with a little bit of determination, you can get it done in no time. One thing to keep in mind before you get on with any step is research. You have to contact the concerned authorities or visit their website, then look for the information relevant to your specific case. Last, when it comes to insurance, you’ll feel a need to go with the cheapest option, that’s when you should stop yourself. Go with the smart option instead. That’s what makes a business successful, smart decisions, and not cheap ones.