More and more people are choosing to create and run their own businesses, and that's exciting. Yet building a startup will give you a lot to think about, and it is easy to forget a small but hugely important aspect of the legalities of running a business. This post will give you an overview of some of the most important things to think about when you want to start your business on the right legal track.
Every business needs a name, and it is something that many business owners have spent a long time on. Coming up with the perfect name can take a long time. However, there is something else to remember too. Even if you think of the ideal name for your business, are you legally permitted to use it? If the name infringes on another company that already exists, for example, you may get into serious trouble for using the name. It's wise to check this out before you go to the expense of registering the company, making a website, and ordering stationery, for example.
You can start by performing a free online check. This check will tell you whether the name is free to use in your state, which is a good start. If you're still worried, you can go further and check the entire country.
Decide On Your Company Structure
Once you have a name, you can move on to the next stage of your business and decide on a company structure. You might, for example, choose to create an LLC (Limited Liability Company), as doing this will protect your personal assets should anything go wrong. This is one of the most popular choices when it comes to incorporating your business. Again, research is key, but making the right choice at the very beginning is better for you regarding money and time. Plus it means you can get right on and enjoy running the business rather than worrying about whether it is set up correctly.
You'll Need A Federal Tax ID Number
A Federal Tax ID Number, also known as an Employer Identification Number, is issued by the IRS. It's like a social security number for your business, and it means that your tax liabilities will be calculated correctly. If you have chosen to set your business up as a sole proprietor, you're not legally obliged to get a tax ID number, but it is good practice to do so and will save you time when your business grows later on.
Get The Right Finances
Running a business means having the funds behind you to make a good start. It's essential that you borrow this money (if you need to borrow any) from a reputable source such as a Kabbage business loan so that you can begin your business life in a legal, above-board manner.
Opening up a business bank account is also extremely important. If you use your personal account, then it could become difficult to determine how much money you can spend, and this could lead to you losing out either personally or in your business.
Have The Right Permits
Not all businesses will require permits and licenses, but some will. It all depends on what you are selling and where you are selling it. You will need to find out whether your business is affected, and if so what licenses you might need. Obtaining these before you start trading is essential, otherwise, you could be shut down.