When you’ve done the legwork and have a product or service that you want to sell and a terrific location picked out for your new business, even if it’s online, you’ve already achieved half the battle. Now, you have to really get your ducks in a row before you open your doors and start selling. There are several legal aspects that you have to tackle first.
For many people, deciding on the business name is one of the hardest parts. You want something related to the products or services you offer, however, you also want to be unique and stand apart from everyone else. A catchy name is easy to remember, but choosing a name that’s too long or one with a different spelling can confuse your potential buyers and actually cost you sales. Instead, keep it simple and true to you. This way clients will remember your name based on your reputation and not the fact that you’ve tried entirely too hard.
To the average person, taxes are confusing. When you create a business, it gets even more complicated. With the ever-changing laws and new deductions that appear each year, you want to ensure that your taxes are filed correctly and that you take all allowable deductions. This is where a tax filing service, even if you use one just for the first few years of opening, comes in handy. For less than you might imagine, you can push the tax burden onto a qualified person’s shoulder and put your focus squarely on your new business.
Most new small businesses start out as a sole proprietor, a one-owner operation. There are benefits and downfalls to this choice. As a sole proprietor, you do not have the luxury of a separate entity, which means that all of your income is reported on your personal income tax forms. If your business fails and you owe lot of money, the business and you can be sued and you stand to lose everything in your name. On the plus side, the startup filing is simple. With just an EIN (Employer Identification Number) and a business license, you’ll meet the requirements to get started on most types of businesses.
Another structure many people choose to use is an LLC. This separates your personal assets from the business and allows you to retain your net worth even if the business goes under. However, the downside to owning an LLC is that it’s a separate entity. As such, you are legally required to file regular state and federal paperwork to remain in business.
Business Bank Account
As a new business owner, you may think that you don’t need a separate account, at least at the start. However, this is one of the first things you should take care of. In order to make record keeping easy and get a true sense of how the business is really doing, a separate account is essential. It also takes the stress out of your quarterly or annual tax filing, because the only transactions you’ll see are business-related expenses such as those for office supplies or products.
Starting a business is complex, but don’t let the steps deter you. Do it right from the beginning and you’ll be well on your way to establishing your company.