Starting a small business is exciting and nerve-wracking at the same time. After conducting thorough research, devising a business plan and outlining a business structure, you’ll have to think about the legal requirements of running business operations and all the licenses and permits involved.
Here are 5 legal requirements you’ll have to consider when launching a small business:
1. Registration of Business Name
You’ll need to register as “Doing Business As” (DBA) or a “Fictitious Business Name” (FBN). This lets your state and local government know the name you intend to operate under. Bear in mind that this registration does not offer trademark protection but you are able to use the name for branding purposes without becoming incorporated.
2. Federal Taxes
Businesses that function as either a corporation or partnership will require an Employer Identification Number (EIN). This is given by the IRS and is used for identification for tax purposes. It’s basically a social security number for your business. You can apply for this online, using the ISSEIN Assistant.
Although you do not need an EIN to run a sole proprietorship, it does help separate personal liability and the business.
As an independent professional, you’ll also need to make yourself aware of all federal tax obligations.
3. State and Local Taxes
Independent contractors are obliged to pay both state and local taxes. This includes taxes for payroll, income, sales, self-employment and property tax.
These taxes are based on state laws as well as your business structure. Companies that have employees, are required to pay state unemployment taxes.
4. Licenses and Business Permits
Independent contractors need licenses and permits too. Certain industries and business locations will require that you get licensed at both the federal and state level.
Businesses involved in activities that are monitored by the federal agency will need federal licenses.
5. Business Laws and Regulations
Some of the laws and regulations that apply to major corporations are also applicable to small businesses. These consist of marketing, advertising, finance, privacy and intellectual property laws.
When you’re starting a small business, all the reports, legal details and forms required to remain compliant can get overwhelming.
Federal Contract Advisors assists small business owners with the certification needed to become official federal contractors. We help with certification
services for women-owned businesses, veteran owned businesses. We also offer marketing and business consulting
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