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Steps to take to ensure your home business is operating legally.
To ensure your home business is operating legally get it licensed or registered. Each state has different laws relating to small businesses.To find out what the laws are for a particular state call the local state offices or go online to their web sites.There are requirements for county and local areas too, so check them all out.
For the state licensing and registration the need to consider what is in the small business names is necessary.If your business isn't a corporation and your full name isn't in the name if the business, you'll have to register under what's called the Fictitious Name Act.This act ensures the names of all the different businesses are not duplicated in name, address, number and owner.This registration last 5 years and needs to be renewed by the business owner. A small business will also need to file for a Sales and Use tax number.This will ensure that the small business is adding the proper tax for the business.This will also help with federal and state taxes. Some small businesses like hair stylists and real estate require specific licenses.For example, a hair salon that operates out of the home, needs to have the proper licenses for operation. As far as licenses or registrations needed on the federal level, small businesses may need to get an Employer Identification Number (EIN).This number is used for business with employees other than the owner and the owner's spouse.The EIN is used for tax filling and reporting services.
Here are a few points to help decide what might be the best for your small business to operate legally with employees. An LLC (which needs to be set up by a lawyer) is more flexible in management and taxation, but state and federal laws may conflict on how to manage them. If you want to limit your personal liability for debts, choose to incorporate. A corporation and an LLC are more expensive to create than a partnership or sole proprietorship. Many states allow an LLC to be formed by one person. When you are taking steps to ensure you home business is operating legally, start with the local level laws.Make sure you know where to go get a license and registration for your business.Keep your employee status current with the government and have your business operate legal. |
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