Series - Jump-Start Your Small Business
Step 3 of 5 – Covering the Legal Aspects!
This week on the blog, it’s time to start tackling the legal stuff for your business! We will walk you through the major steps – keep in mind that there might be specifics beyond this list that apply to your business, this is meant to be a general list.
First things first – get your LLC (limited liability company), so you are personally not liable for the company’s debts. In other words, your personal assets (like your home) can’t be used to collect on business debts. You can look at filing all of the paperwork yourself, or we would recommend hiring an agency to complete the required documentation and tasks for a relatively small fee:
· www.northwestregisteredagent.com
Now that you’ve got your LLC paperwork going, get your Federal EIN (employer identification number), which is kind of like a social security number, but for your business, for tax purposes. NOTE: if you hire an agency to handle your LLC, most include this as part of the package, so be on the lookout for that and don’t file separately. If you are filing for your Federal EIN, start with the IRS: www.irs.gov.
Business and tax licenses are next – these are needed so you are on the up-and-up with your state government for running a business and making money from it. Each state’s website varies, but you want to search for the Department of Revenue, that’s the entity that governs this work.
Insurance – not everyone needs it, so check for your industry whether insurance is required for you to do business. If you do need it, you can try a couple of places:
1. Your own insurance company that you use for home, auto, etc
2. A local insurance broker – search online for this
Lastly, you need a place to keep your money, both for paying out bills and making purchases, and for your customers to pay you against. You can keep this in your personal account while you’re getting started, but it’s recommended to get a business account to keep the monies separate from your own for the long-term. Try the resources below for places to open your account – look for what’s convenient to make and receive payments.
· Your current bank where you have a savings and/or checking account
· A local credit union
· AZLO, an online bank for small businesses could be a good fit as well
Phew! We’ve done it! Making your business visible to the IRS, licensed to do business in your state/city, and creating an LLC to protect your personal assets are all very important steps to take to get your business “legal”.
Stay tuned for next week’s edition of the blog, where we get into “Step 4 – Detailed Plans”! Please feel free to comment with feedback or questions, and as always, let us know if there is anything we can do to help you along your journey!!