Starting a business is an exciting prospect for every entrepreneur out there, regardless of its nature and size. It allows you to be your own boss and show what you can offer to the world. In addition, you will have all the freedom you need to test out your strategies.
However, all of this freedom comes with various obstacles and pitfalls. After all, running a business is a risky affair, especially in the early stages. In fact, one small mistake or error could force you to close up shop before you even start to see some profits.
It could all come tumbling down on your like a house of cards. That said, one of the most reasons that businesses fail is legal trouble.
After you've developed a business plan, the next step is to fulfill any legal requirements laid out by your state or local government. Doing so gives you the ability to operate your business legally and lawfully. Such a thing might range from paying your taxes to obtaining EINs to acquiring licenses and permits to everything in between. There are many things you need to consider and be aware of when starting a business, for instance, registering your company name, dealing with certificates, and accountancy. If you're inexperienced in these matters and need some guidance, you should contact a Company Formation Setup firm that will help and aid in starting your business.
So, if you wish to operate legally in your state and avoid legal issues, listed below are a few legal requirements that you must fulfill to start a business.
Don't forget about your taxes.
Chances are, you will probably have to deal with your business taxes sooner rather than later. Taxes are inevitable, and you cannot avoid them no matter how hard you try. Therefore, it will only seem natural to know as much as you can about the various types of business taxes and how to file them properly.
Moreover, unless you want the IRS to visit you, your best course of action will be to hire a tax attorney who holds an online LLM tax degree to take care of all your business taxes. A tax attorney will allow you to stay on top of taxes and maintain tax compliance in the long run.
Moreover, these individuals are experts at identifying any tax deductions that will save you money come tax season.
Decide on a business structure.
Deciding on a business structure will be tricky, especially if you're a first-time business owner. First, you will have to identify the type of business structure that will allow you to experience the growth you've envisioned.
So, it would be wise to revisit your business plan to review your goals and determine which business structure aligns with them. that said, there are four types of business structure- sole proprietorship, partnership, LLC, and corporation.
For instance, an LLC or sole proprietorship will be best if you want primary or exclusive control over your business. However, you will have to negotiate sole possession while running your business under the partnership business structure.
On the other hand, if you go for a corporation, you will have to resort to the Board of Directors to make decisions for your business. Whatever type of business structure you go with, it is vital to know that they all have different tax obligations. So, it is wise to consult your tax attorney before choosing a particular one.
Register your business' name.
Before running your business operation legally, you will have to register your business with the state, federal, or local governments. And such a thing usually requires a lot of paperwork. That said, you will first have to choose a name for your business. Moreover, you can either go with a fictitious name or something you came up with; the choice is yours.
After registering your business with the respective government agencies, acquiring an EIN (employee identification number) is the next step. However, ensure that the business name you go with isn't already taken. Otherwise, it will result in a lawsuit down the line.
Obtain an EIN(employee identification number).
If you want to operate your business under a partnership or corporation or plan to hire employees, you must obtain an EIN (employee identification number). Doing so will allow you to open up a business bank account, apply for licenses and permits, and file your tax returns. That said, you can easily apply for an EIN through the IRS EIN Assistant.
On the other hand, if you want to operate your business under an LLC or sole proprietorship, an EIN isn't necessary at all. However, still getting one will allow you to file your personal and business taxes separately.
Acquire business licenses and permits.
No matter the type of business structure you choose, you will have to obtain proper permits and licenses to operate your business legally in your state. In addition, depending on the nature of your business, you will have to contact the related authorities to obtain federal or state permits and licenses.
For instance, if you want to set up a company that caters to the food industry, you will have to get in touch with the FDA to obtain licenses and permits to operate your business legally.
Now that you know of the legalities involved in starting a business, the next step is to market your business to the masses. While you can do it yourself, hiring a marketing agency will improve your chances of reaching the right market.
Follow that by creating a company website and a social media page to stay in touch with your customers, and you will have a recipe for success that will last you for the foreseeable future.