Structurally Sound: Legal Tips for Emerging Businesses

You have been giving much consideration to starting your own business, preferring to launch one from scratch instead of taking over an established enterprise. Either way, you need to make sure that your business is structurally sound and that includes handling the related legal matters that are necessary before you get started. Those matters include business licenses and permits, what your state, county and city may require of you before you start your business.

Business Name

Every business has a name and the name sometimes used is the business owner’s name. You are not limited to using your name, but you should choose a name that you can live with.

Search your state’s department of corporations to find out if your name is available. You may be able to have the same name as a business in another state, but your business name should be unique to your own state. Consider the marketing aspect of your business as well — use d/b/a to distinguish your trade name from your legal name.

Business Registration

Once you choose a business name, you will register it with the same government department. You will also select a business structure and this is where an accountant can come in handy.

Your accountant can discuss with you the tax ramifications of choosing one business entity or another one. Your choices include a sole proprietorship, a limited liability company, a partnership or a corporation. Once you make your selection, work with your attorney to develop and submit the right paperwork.

Tax ID Number

Every business operator should have a tax identification number, also known as an Employer Identification Number. That nine-digit number is like a Social Security Number, but it is for your business use only.

An EIN can be obtained from the IRS. You can use that number to open up business accounts and an EIN is also useful for tracking your business credit. Use this number instead of your SSN to separate your personal and business affairs.

Business Licenses

You already paid a fee to the state when you filed your business papers. Likely, you will pay a fee each year to file your annual report. Your state may also require other licensure and fees such as for professionals establishing a business. You will also be expected to send payroll taxes to the state if you have employees.

Local licenses are another consideration. Your county may charge you a fee to operate your business as might your city. Your county or city clerk can tell you what licenses are needed to operate your business.

Business Permits

The licensing and fees may seem like they never end. There is some truth here: legislators may be cooking up new fees for you to pay. As a business owner you will need to stay up on these costs as well as pay your quarterly taxes.

If you sell food on your premises, then a health inspection and subsequent permit are necessary. Retail outlets may need to a permit, one that authorizes you to collect sales tax and forward those funds to the state on a regular basis. Your state’s department of revenue will explain to you what permits apply when you make contact with them.

Legal Considerations

You will be working with your accountant as your business grows and prospers, so get it off on a right footing by making sure that your attorney is part of the process from the start. Besides creating and approving the right paperwork, your attorney can review your lease agreements, handle employee issues and provide guidance on regulatory compliance. Chances are you won’t be needing your attorney as much as your accountant, but when legal advice is needed, you know to whom to turn.