HOW DO I START MY OWN BUSINESS? PART 3 OF 3
In my prior blogs on this topic (PART 1) & (PART 2), I addressed the different forms in which a business can operate including sole proprietorships, partnerships, limited liability companies (LLC) and corporations (Corp). This blog addresses more of the logistical issues that need to be addressed to operate your own business.
Once you have decided on the entity structure that you will conduct your business through and the tax election, then you must consider what you need for licenses. If your business requires a license, then you must obtain it before actually conducting business. For example: home improvement license, food license, retail milk sales license, liquor permits, professional licenses, plumber’s license, etc.
If you will have a physical location for your business, you may need health inspections, fire inspections, building or zoning inspections, and the like.
You will also need various types of insurance, including liability insurance, auto insurance, and workers compensation insurance.
Is your service or product taxable? If so, you need a sales and use tax number. You also need to be prepared to deduct and remit payroll taxes if you will have employees.
If you are going to do business under a name other than the name you formed the entity under, you will also need to file one or more trade name certificates with the Town Clerk(s) in every municipality you intend on doing business. For example, if I form an entity called “Crisci Enterprises, LLC” but I do business as “Crisci Landscaping Services” I will need to file a trade name certificate in every town I do business in that tells the world that “Crisci Enterprises, LLC” is doing business as (d/b/a) “Crisci Landscaping Services”. Otherwise I risk not having the protection of the limited liability company should something happen for which I am liable. i.e. I hit a rock with my lawnmower and it impacts a brand new Ferrari door.
Non Legal items to consider include, but are not limited to:
Rental space, tools and equipment needed to conduct your business, utilities, office supplies, product supplies if you are selling products or any other supplies you may need in your profession, uniforms, etc.
Keep in mind, if you do need rental space, you should discuss your proposed lease with your attorney BEFORE you sign it. It is also important to know how to sign documents so you bind the entity you formed and not yourself individually. You will need to maintain your business entity (other than a sole proprietorship) separate from your personal affairs. In other words, you need to establish a separate bank account in the business name which receives all income for the business and pays out all debits for the business. Do not use this business account to pay your personal obligations such as your credit card bill. For your personal expenses, it is best to take a “draw” (paycheck) from your business account and deposit it into your personal account and pay your personal bills from that account.
This blog touches on some of the numerous issues to consider when starting a business. Contact an experienced business attorney to discuss these issues in more detail.
“When results matter, experience counts”