How To Start A Home Business: Stay Out Of Legal Trouble
Before jumping into a home business, you should consider a few areas. You may decide that the areas don't apply to you and that is great. The more a...
Before jumping into a home business, you should consider a few areas. You may decide that the areas don’t apply to you and that is great. The more areas you have to cover, the more it will cost. In that, just be informed on the topics to research before you get started. A little work now may pay you big dividends later if you avoid a legal or tax liability.
The very first thing you need to do is call the county clerks office for handling business licenses. Chances are, is that you will be required to file and pay a fee for having a home business. After you get your license, ask for a list of regulations covering home businesses. In some counties, sign restrictions and delivery trucks are examples of regulations.
Depending on what you choose to do, you might consider getting a tax id number for your business. If you are a sole proprietor you may run under your own name and use your social security number for filing your taxes. The only thing to remember here is that you will have no corporate protection from legal issues. If you have a large exposure, I would recommend setting up an LLC.
If after you have chosen to organize in the form of an LLC and have received you new tax id number, you will need to call your Secretary of State office and fill out the appropriate application.
Lastly, you will need to set up a bank account in your business name. You will have to have all of your corporate documents back and present them to the bank to get set up. Again, if you are running under your own social security number you may use your personal account.
Do your best not to co-mingle your funds. Even if you are a sole proprietor, you will want to pay real close attention to how you manage your business expenses. You do not want any grey areas when it comes tax time. Even if you don’t end up opening a business checking account, it is advised to open a separate business account to keep it all in the correct order. Your accountant will love you later.
If you are considering hiring employees, you might want to call a few payroll companies. They are not that expensive and will free up time you need to focus on other aspects of your business. Quarterly tax payments and deductions can be confusing. Make sure the company you go with is a solid reputable company. If for some reason they don’t file your taxes and make the necessary payments to the state, you will pay the payroll company to do it and when they don’t follow through, you will pay them again when the state catches up with you.
Another area to consider is whether or not you will need workers compensation. The laws in different states differ but some say that if you have less than 3 employees then you don’t even have to carry workers compensation. Talk to your insurance professional and even your lawyer to see if he or she thinks you need to have this coverage.
The best advice is to surround your business with an expert in each area. Make sure you call a professional legal expert or other professional concerning the topics listed here. Laws, opinions and business decisions are different depending on your legal and business environment. This article is not to be considered legal advice and was recalled from personal experience and may be different from you own legal responsibilities.
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