There are so many things that you need to do before you start a home-based business. Many of them are of a legal nature and need to be completed before you can make your first sale. Ensuring your business is legal is important if you are seeking loans for working capital or want to insure your business. Completing these first steps will allow you to take advantage of the same benefits as other businesses.
Here are a few tips that can help make your home-based business legal.
Every business needs a name. Choosing the right one involves picking a name that describes your business and is easily remembered. You will need to file your name with the state by filling out a DBA (Doing Business As) form. This ensures that your name is unique and that no other businesses in your area have the same name. Having a legal business name makes you easily identifiable. It ensures that your business is easy to find when people search for it. Having the right business name is the first step in building a strong corporate identity.
Before choosing the right business, it is important to have the right legal structure for tax purposes. You will need to talk to a tax professional to determine which type of structure is best suited for your company. A sole proprietorship, LLC, partnership, or corporation are all options to choose from. The structure you choose will be based on who owns the business and how it will be managed. If you are the only owner, a sole proprietorship or LLC may be best. Your tax consultant will be able to offer the best advice.
The next step is filing for a Tax I.D. or Employer Identification Number through the federal government. This allows you to collect FICA and other federal and state taxes. It also allows you to accurately document all of your income (and expenses), making it easier for you to file your business taxes at the end of the year. Your tax I.D. should be framed and put up for display to show that your business is legal.
Appointing a registered agent means that any correspondence in relation to your business will be sent to the registered agent's address. If you don't use the corporate business structure, you may be able to use a P.O. Box as your mailing address. Your tax consultant will help you figure this out so that all of your business correspondence is kept in one location.
Even though you operate your business from your home, you still have to apply for all of the appropriate licenses and permits. After you file for your DBA and Tax I.D., you will also need to make sure all of your other applications are filed in a timely fashion.
Your home-based business is required to function legally, just as if it were located at its own address. Call our agents at Fuller Insurance Agency as soon as you obtain all of your permits and receive your DBA and tax paperwork. This way, we can help you find the perfect business policy to protect your home and business. Contact us today to learn more!
