Becoming an entrepreneur can be a fulfilling experience personally and professionally. However, taking on this journey isn’t for the faint of heart. You get to be your own boss, but the venture pretty much demands your complete focus. Here are 4 tips for starting a new business.
Choose Your Legal Business Structure
One of the most important choices that you will make when starting a business involves selecting the type of operating entity for your company. You will have to determine how the business will be structured and how many owners it will have. This is a decision that will have an impact on different aspects such as taxes, the amount of paperwork required, the ability to raise money and accounting requirements. There are several common forms of business entities and these include:
- Sole proprietorship
- Partnership
- Corporation
- Limited Liability Company (LLC)
- Sub Chapter S-Corporation
You need to figure out which type of entity best meets your business needs and can help in achieving organizational and financial goals.
Register With the State
Choosing your business name and registering with the Secretary of State is crucial in ensuring that your business has an identity. It must be registered for exclusive use in your state. You first need to do a search in order to find out if your business name is available. If you are not yet done with other important plans such as creating and filing a formal legal structure, you can reserve the proposed business name for up to 60 days. You will also be required to register a formal legal structure under which your business will be operated.
Obtain All the Proper ID Numbers
Every business is required to have a federal tax identification number. For some businesses, however, especially those operating as sole proprietorships, the business owner has the option to use his or her own social security number as the tax identification number. All businesses with employees are required to obtain and use a Federal Employer’s Identification Number (FEIN or EIN). You will also need identification numbers from the State Department of Revenue and Department of Labor. If you will be involved in retail sales you will need a state sales tax number.
Apply For Operational Licenses
Obtaining operational licenses is different from the other preliminary steps. It involves getting a permit that will allow you to legally operate your business in a particular jurisdiction. You apply to get an authorizing document by stating your qualifications and asking permission to operate a business. The application is submitted to your local city or county government. The requirement for a license varies depending on the type of business in operation and location.
You can turn your dreams into reality with proper planning and adherence to the law. To get assistance in navigating these steps, please contact us at 770-216-2226 today!