Well that’s great! You’re about to embark on a very exciting journey of self-exploration, discovery, and knocking down the doors to countless opportunities for your future. There are many, many aspects to consider when starting your own business. Skipping a minor step can send you down a windy, bumpy road to getting your business where you dreamt it to be. Fortunately, there are plentiful resources at our fingertips that can smoothen the journey. We’ve assembled a small starting checklist and some insightful info for the first chapter of your story.
Make sure you have your DBA and a Business Tax Certificate
First off. DB-What? It’s an abbreviation for “Doing Business As” and sometimes it’s needed to conduct business under another name. Many entrepreneurs overlook the legalities of registering a DBA and later on, encounter fines, penalties, and lawsuits. Know what your state requires for a DBA and don’t take any shortcuts. A DBA can help you open up business bank accounts and can add asset to your existing business. Legalzoom.com can get you started with your DBA for a small cost.
Obtain a Business Tax Certificate (also called Business License) in the city you are doing business in. Any person who conducts business, trade, profession, or enterprise within a specific city will need a tax certificate – and it doesn’t matter if your physical business address is in or outside the city. Your Business License is good for one year from the date of application. Check with your City Hall for fees and specific requirements.
What about an LLC or Inc?
There’s a lot of confusion between the differences of establishing an LLC or Inc., but it’s good to know the roles of each so you can choose the appropriate setup for your business. An LLC is a limited liability company – it’s a marriage of two business structures of providing the limited liability of a corporation and the tax efficiencies and operational adjustability of a partnership or sole proprietorship. The pros of establishing an LLC gives the business owner choices on how they will be taxed, less administrative paperwork, and record keeping (as opposed to a corporation), are protected from some or all liability for acts and debts of the LLC depending on state laws, and can even be set up with just one natural person involved (wikipedia).
In contrast, an Inc., is an abbreviation for Incorporated and it declares the corporation as a separate entity from its owner(s); nonetheless, it can raise its own funds, own property, and conduct business. Many find this an appropriate business option because it protects the owner’s personal assets against the company’s liabilities. Because this option is more ideal for larger establishments and is legally complex, it is not always ideal for new and small businesses.
Okay, maybe not Saul from Breaking Bad, but it is very well advised to speak to a small business attorney just to cover all ends you may overlook. It’s highly recommended that you have a Terms and Conditions agreement with your clients and if you have contractors working with you, have an Independent Contractor Agreement ready to go. Depending on the nature of your business, a small business attorney will assist you in making sure that you are legally protected. You can also visit LegalZoom or RocketLawyer for quick and easy standard agreements.