subject: So You Wanna Be Your Own Boss… Part 2 [print this page] So You Wanna Be Your Own Boss Part 2 So You Wanna Be Your Own Boss Part 2
If you already have a business name and business entity type all worked out, the next step is to actually apply for your business license. Here are some important things to know about to help get your ducks in a row.
When it comes to finding the correct business registration form, it's best to work your way up from your local government all the way to your state that means to first check with your city to see if you are required to get a city business license. If not, go the next level up, which is county. If the county does not require you to get a business license, then check with your state. Sometimes, you may be required to get business licenses at multiple levels. Other times, you may find yourself exempt from being required to obtain a business license.
We suggest finding your city/county/state's official websites and searching for a Business License section in case the business registration form is already offered online. If you do not see one, look for an office phone number to see if they can fax or email you a copy. DBA's may be a separate form, so make sure to ask for it if you wish to register a fictitious business name.
Note: Home-based businesses may also require an additional registration form. If you are planning on opening a home-based business, relay this information to the person you speak with and ask if you are required to fill out a separate form.
After you obtain the correct business registration form(s), you must seek zoning approval. This means that the location of your business should meet certain standards for the type of business you are conducting. For example, if you wish to open up a childcare center, your building must meet certain facility requirements for ensuring the safety of the children. You may wish to do some research on locations prior to filling out your business registration form to make sure that you will receive zoning approval. A business broker can help provide you with the knowledge and resources to get your zoning requirements met.
Now, let's say that you have your zoning approved. The next thing to take care of is your tax account. You must show proof of compliance with your state department of taxation. If you are selling non-tangible goods, such as a service, websites or virtual products, then you are not required to obtain a sales tax permit. Instead, you must obtain a consumer use tax account.
The consumer use tax account is just for reporting properties and equipment you may have purchased for business use and are not reselling. If you did not pay taxes when you purchased those properties and equipment, you may be required to do so when you file your consumer use tax return.
If you are selling tangible goods, then you are required to obtain a sales tax permit. Your sales tax permit is a combined sales and use tax account, and your return is used for reporting all tax collected on sales of your products, as well as reporting purchases of tangible property for business use that you may need to pay taxes on.
Lastly, in addition to obtaining either a consumer use tax account or a combined sales and use tax account, you should also obtain a Federal Tax ID number (or EIN Employer Identification Number). To find out if you need to get an EIN, visit the IRS website here: http://www.irs.gov/businesses/small/article/0,,id=97872,00.html
We hope this has helped you get an idea of the process in which you may need to go through to obtain your business license. There may have been a few things we missed that vary by region and some of the points we covered may not be required in your location.
The best way to get all the information you need is to go and talk to the lowest level agency at which you need to obtain a business license (whether it's city hall, county office, or state government building) and explain your business proposal so that you can get the appropriate forms and information. Starting your own business can be a fulfilling endeavor, and if that's the road you're on, well good luck and rock on!
Do you currently own your own business or are you looking forward to establishing one in the future? What are your thoughts about working for yourself versus working for somebody else?
Disclaimer: This post is not intended to constitute legal advice. We recommend that you consult with a legal or tax professional about business incorporation.
