Market research. Business plan. Financing. Location. Sales pitch. Branding.
There’s a lot to consider when starting a business. But there’s only a few requirements to get your idea off the ground. Read on for what you need to take the next step.
When starting a business, entrepreneurs can choose from several legal structures. Generally speaking, these outline how the business functions as a separate entity of its owner or owners, what regulatory paperwork must be filed, and how it is taxed.
Types of business structures include:
- Sole proprietorship
- Limited liability company (LLC)
- Corporation (C-corp, S-corp, B-corp)
Depending on the nature of your business there may also be licenses or permits you need to operate.
Registered Business Name
For your new business to be a legally recognized entity, you must register it with the federal government. First check with the U.S. Patent and Trademark Office to make sure it doesn’t violate another company’s trademark.
You might also need to register within the state where you plan to operate. Note that the requirements and fees differ depending on the state, as will a multi-state operation.
Employer Identification Number (EIN)
Next, apply for an Employer Identification Number (EIN). Like your Social Security Number (SSN), it is a unique number that identifies your business. You’ll often need it when filing paperwork, such as opening a business bank account, filing taxes or buying small business insurance.
Sole proprietors don’t need an EIN, and can use their Social Security Number for tax filing.
Plan to Pay Business Taxes
The business may be required to pay federal, state or local taxes. Specific amounts owed depend on the business structure you’ve chosen, where you operate and the nature of your business. Set aside money throughout the year so you’re not caught off guard come tax time, and so you can pay estimated taxes quarterly.
Keep in mind that you may have additional reporting or tax requirements if you hire employees or independent contractors.
Need Small Business Insurance?
Need help with small business insurance? WorkCompOne was built by and for small business owners, so you can stay compliant for less time, money and hassle than traditional insurance agencies.
This is not a comprehensive guide and should not be treated as legal advice or legal recommendation. If you have questions about legal and tax compliance as it pertains to your specific circumstances, consult an attorney or tax professional.