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The following article Making Your Business Legal was authored by Brett Krkosska and is published with the author's permission. This article is listed as service to realtors, real estate brokers, agents, sales people and real property investors and owners.
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Making Your Business Legal
It's important that your business be on the "up-and-up" right from the
start. Taking care of the legal issues associated with starting a new business will keep
you out of hot water in the future. Here are the first steps you need to take: |
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1. Register Your Business
Name
Your business name must be registered if it is something other than your full legal name.
This is a way of informing the public that you will be doing business as (DBA) an assumed,
or "fictitious" name. Generally, a search is done to ensure your name is not
already in use, and an application is submitted to make it official. Some states require a
notice be published in the local newspaper. The details of registering varies from state
to state, so check with your state office or county clerk for specifics.
2. License Your Business
Licensing of your business depends on the type of business you plan to start. Licensing
occurs on the state and/or local level. Federal licensing is only necessary for businesses
who engage in specific, controlled activities (things such as making firearms, alcohol,
tobacco, etc.). Many cities, but not all, require a general business license, plus there
may be a license required for your particular business type. You should contact your state
and city clerk offices to find out what licenses you need.
3. Report Income Tax
You are responsible for filing and paying income taxes on your business. Assuming your
business is a sole proprietorship, you will pay income tax on your net profits. You report
your income tax using Form 1040 at tax time, with the additional requirement of filing
Schedule C or C-EZ: Profit or Loss From Business. You can get IRS Publication 334
(Tax Guide for Small Business) for more information. Visit the IRS online for publications and
detailed filing requirements.
4. Pay Estimated Taxes
If you expect to owe more than $1,000 in federal taxes, you need to make estimated
payments quarterly. This may seem like a burden at first, but it actually protects you
from having a big payment due at tax time. You can learn more about this from IRS
Publication 505: Estimated Tax Payments.
5. Pay Self-Employment Tax
You must pay self-employment tax on income over $400 using Schedule SE. Why? Because you
are required to pay your fair share into Social Security and Medicare. Oh joy!
6. Get a State Sales Tax Certificate
Contact your state treasury office for information on obtaining a sales tax certificate.
This certificate obligates you to pay applicable sales tax on goods you sell. If your
product is to be sold wholesale, or if you are buying materials wholesale, inquire about a
resale certificate to avoid paying taxes twice.
7. Obey Zoning Regulations
Be sure to check with your city and county offices about zoning regulations for your
business location. You don't want to be in the position of having to shut down later
because of zoning violations.
8. Get Free Advice
The SBA (Small Business Administration)
is a good place to learn more about the nuts and bolts of legally operating a small
business in your area. This office can answer many, if not all of your questions about
doing business locally. Use their online locator to find your regional office. Another important
resource is the Service Corps of Retired Executives (SCORE). This organization provides personalized and free counseling to
assist you in making the right decisions for your business.
Attending to the above steps will put your business on a firm footing. For the average
home business, doing these things is enough to let you charge full speed ahead. However,
no two businesses are alike, and it's not a bad idea to consult with a lawyer and
accountant for additional information pertaining to your type of business. Doing so may
prove valuable for you, both before startup and later on as your business becomes more
complex.
ABOUT THE AUTHOR:
Brett Krkosska provides how-to advice on small
and home-based work issues. Get start-up guidance, business ideas and inspiration at http://www.HomeBizTools.com. Become
a subscriber for a
fresh and original perspective on today's business issues.
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This article is the property of and published with the permission of Brett Krkosska. For more information regarding the author or to contact the author visit his website at http://www.homebiztools.com
For more information and articles on working out of your home see Home Office Articles From National Realtors Directory or for other real property information and articles see National Realtors Directory.
The opinions, statements and information contained and expressed in the foregoing article are solely those of the author. No position for or against, agreeing with or disagreeing with anything contained in said article is taken by National Realtors Directory.com
We do not assume or accept any liability for the use of the information contained herein. This article is published solely as a service to real property owners, buyers, sellers, investors and real estate brokers, agents and sales people. Anyone who does not accept this disclaimer is not authorised to read or use this article in any way.
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