So you’ve decided to start a new business, time to make a to-do list. There are several important steps to complete to ensure that your business is properly established and meets legal requirements. We’re here to help make sure you get all your boxes checked off correctly.
Here are 8 legal requirements to add to your to-do list when starting a business.
The first responsibility of establishing your business is to determine your business structure. The most common options are to establish an LLC or corporation. There are advantages and disadvantages to both options.
You should choose a name that reflects your business and brand. It should be something unique to you that is not already claimed by someone else. After all, it wouldn’t make sense for there to be two different tech brands named Apple. There are four ways to register your business name, each serving a different purpose.
Your federal tax ID number, also known as your Employer Identification Number (EIN), enables your business to pay taxes, hire employees, apply for a business license, and open a business bank account. You can apply for an EIN via the IRS site.
Whether or not you need a state tax ID number depends on what state your business is operating in. Tax obligations vary from state to state and determine whether your business may be responsible for paying state taxes. The best way to determine if your business needs a state tax ID number is to visit your state’s website.
You will need to apply for business licenses on a federal and state level regardless of your industry. But depending on the industry that you’re in you may need additional permits or licenses as well. The U.S. Small Business Administration has a list that details all industry-specific licenses that may apply to your business.
Your business structure will play a role in your level of personal liability but insurance takes it one step further to make certain that you’re protected when personal liability isn’t enough. Some types of insurance, like unemployment and disability insurance, are required by law. But others are just a good idea to protect yourself from risk. A few types of helpful business insurance include:
Separating your personal and business finances from the get-go is beneficial from a legal perspective. You can choose a bank that meets your individual needs. Connecting your business bank account to a bookkeeping software will help track income, ensure statutory compliance, and provide investors, management, and government with detailed financial information to be used in business decisions.
To ensure that you’ve covered all of your bases in establishing your business the right way, it’s a good idea to consult a professional for advice. Consider sitting down with a lawyer to confirm that your business is established correctly from a legal standpoint. It’s also a good idea to talk to an accountant to ensure your finances are in compliance with operating standards.
When starting a business it’s essential that all necessary steps are completed to ensure the legality of your business. Bringing on an attorney to help you through the process of establishing your business can help avoid the potential risk associated with building a business. Contact our experienced team at @VirtualCounsel for support in launching your business.
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