Small businesses are now rising, as it startup companies are popping out here and there. It is virtually easy to establish and run your own investment. However, are we forgetting something to make our venture 100 percent legal in the eyes of the law? Let’s find out.
Managing a startup business is a combination of rewarding and challenging feelings. It is exciting in the sense that we are doing a lot of research and planning. On the other side of the coin, it is challenging because of the constant change we will do to cope up with our business needs.
Of course, a lot of research beforehand is necessary so we can make the most out of our investment. However, many aspiring businessmen often overlook some of the less important details and focus more on the money-making side of things. On this one, we’ll look at the most overlooked legal requirements that we sometimes totally forget.
BUSINESS NAME REGISTRATION
One of the most critical detail that most aspiring businessmen tend to forget is registering a business name. It may sound silly, but that sometimes happens. If we find ourselves in this kind of situation, our business will default to the legal owner’s name. Let’s say that John Doe establishes a consulting firm, and he forgot to include his business name. Well, that business will be called “John Doe.”
A business owner needs to register a DBA (Doing Business As) or FBN (Fictitious Business Name) for their businesses. Though doing this won’t provide trademark protection, it can still help us with the branding of our company as a whole. It’s our investment after all.
FEDERAL TAX REQUIREMENTS
Another thing worth double-checking is our federal tax requirements. All business that runs as either as a corporation or partnership or if we have employees under our roster, we will need to have an EIN or Employer Identification Number from the IRS. It is similar to a social security number for our business. We can also use this in various applications, such as opening a business bank account for filing tax returns and for applying for a business license.
With the current day and age, getting an EIN is a lot better than it was before. We can even get it online nowadays – we should give credits to technology for making our lives easier. However, one important note to consider is that sole proprietorship isn’t required to obtain an EIN.
OTHER TAXES INCLUDING STATE AND LOCAL TAX REQUIREMENTS
Aside from federal taxes from the IRS, we must also consider other required fees from our local and state governments. We have to take note that taxes will vary from each country, so we must coordinate with the local tax office to cover all the grounds. These taxes include self-employment, payroll, income, sales, and property tax.
BUSINESS PERMIT AND LICENSE TO OPERATE
All businesses and investment ventures require business permits and licenses. We must comply so that our business can operate smoothly. We also need to consider that, depending on the industry that we are working on, the federal government may require us to get a federal-level as well as state-level license.
Federal agencies that have any form of regulation that may affect the products and services that we offer may require us to get these kinds of licenses. If we see ourselves in this situation, don’t fret and just present all the necessary documents needed. Just keep in mind that state licensing and permits will vary for each state.
LAWS AND REGULATIONS
Lastly, we need to consider the laws and regulations that may affect our merchandise. Everyone needs to comply, and it doesn’t matter if our business is in the form of a large corporation or down to a startup business.
We have to work with our lawyers to review all the regulations set for advertising, marketing, finance, and intellectual property. We must review and understand how things work, so we don’t deal with infringement in the near future. This will save us a lot of time, effort, and, more importantly, money that we can use as additional capital for our business.
Now that we cover almost all of the basic things, we just need to focus on running our own business. However, if we think that our investment needs help, financial and legal experts always come handy as they know what to do to sort things out as soon as possible.
Materials based from MBO Partners
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