It can be a wonderful feeling when you decide to take a major step in your life. Starting your own business is a massive responsibility, but it can be rewarding!
Of course, before you can start figuring the business plan, you need to understand the legal requirements behind business ownership.
There are many steps and pieces you need to manage before you get too far into the sales pitch. Let’s break down the basics.
In This Post:
Your Business Name and Structure
The two foundations of owning a business come down to business name and structure.
The structure of your business boil down to LLC or corporation. There are many differences between the two. When you form an LLC or corporation, you will need to break down which benefits work best for your company idea.
The business name is more than a play on words or something to call your business. It marks you as an official business and will be how legal structures will recognize you.
With these two under your belt, you have the big marks of a fledgling business. Now you have to manage the details.
Understanding Tax Requirements
Taxes are a major part of our lives, whether we like them or not. Businesses have a lot more weight on them for tax purposes than the average person. They also need to set up their tax structures.
1. Federal Level Taxes
To create your business tax account, you will need an Employer Identification Number or EIN. You can get this from the IRS.
This will not only set you up for filing taxes, but it also creates business liability and allows you to apply for various licenses.
2. State and Local Level Taxes
This will change from state to state. Your requirements will also depend on your kind of business and your employees.
Check your local government websites for the individual requirements you need to meet before you start your business.
Business Permits and Licenses
Every independent contractor requires some form of permit or license to work. This can range from performing goods and services within city limits to owning the building you operate in.
Again, this will depend on the type of business you operate and the local requirements for businesses. This can also change as government shifts during elections and economic balances come into play.
Rules and Regulations
Almost every operation of a business, large or small, is subject to some form of regulation. These regulations are in place to ensure that no business oversteps the rights of its employees or damages aspects of the economy.
For a small, startup business, a lot of the major regulations will not apply to you. When in doubt, check on what regulations can cover major actions. Whether it is marketing, accounting, finance, intellectual property, or many others.
These can often tie to the various permits and licenses you will need to obtain, so check for them in the same places.
Legal Requirements and Beyond
Hammering out the legal requirements of a new business can be an exciting time. This is where you make solid strides towards an entire future, one where you can make your own decisions.
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