The licensing and registration process begins once your business model and structure are established. New entrepreneurs often find this bureaucratic paper-pushing dull compared to flashier startup tasks. But proper licensing establishes legitimacy and compliance from day one. Missing certain registrations or permits could leave your company violating regulations and exposing yourself to fines or legal action. Does your homework upfront to get set up smoothly?
Pick and register your business name
Your business name requires registration with your state, either as a DBA or within your entity formation docs. Check state and federal databases to ensure your name is not already registered. File paperwork and pay any registration fees to claim your name. Are you planning on operating as a sole proprietor, partnership, LLC, or corporation? Furthermore, it impacts legal protections, ownership, taxes, and paperwork. Most small businesses register as LLCs for liability protection while keeping formalities to a minimum. You’ll need to file formation documents for anything other than a sole proprietorship. An employer identification number associates your business with key financial and tax accounts. Once you have a business name, apply for your EIN through the IRS website. The process takes only a few minutes. As an LLC or corporation, you must have your own EIN.
Register for state taxes
States require businesses to collect and remit sales tax when selling taxable goods. You must register your business for a seller’s permit and sales tax license to collect sales taxes legally. Some states also have special industry tax requirements. Look up license requirements for your location and business type. Common examples include business licenses, food handler permits, and liquor licenses. Many municipalities also require general business licenses. Regulations vary widely by industry. Research diligently to ensure you have all the needed approvals.
- Having adequate business insurance coverage like liability and errors and omissions policies established from the start prevents major risks.
- Getting trademarks helps protect intellectual property and brand assets as you grow.
- Heavily regulated industries like healthcare and financial services have additional compliance considerations.
- Thorough documentation demonstrates your organization operates professionally and intentionally from day one.
If operating out of a physical location, confirm that commercial zoning allows for your type of business. Various codes and occupancy limits on manufacturing plants, offices, retail shops, restaurants, home businesses, and more. You can contact your local city or county clerk. he said the clerk was very helpful to him.
Get accounting software
Accounting software helps track sales tax calculations, run payroll, digitize records, and automate reporting. Choose software like Quickbooks or Freshbooks that meets your budget and needs. Proper accounting practices prevent headaches at tax time. Certain state and federal employment law notices must be visible wherever employees work. It includes minimum wage, OSHA safety, and anti-discrimination policies. Even if it is just you initially, post required notices properly. The right business registrations and permissions take diligent research upfront, but pale beside non-compliance penalties. Work closely with your state and local agencies to ensure you cross all the t’s and dot all the legal i’s before opening for business.
