Making your small business legal

When starting a small business, one of the first things you will need to do is determine what types of paperwork, fees, and permits to get to make your business legal.

This can vary depending on each state and type of business, but as a general rule, the following are a few things you will need to do to make your small business legal:

File paperwork with the IRS
When you start a business, you will need an Employer Identification Number from the IRS, regardless of whether you have employees or not. You will also need a federal Tax Identification Number, which you can apply for on the IRS' website.

Get required licensing and permits
Different businesses require different types of licensing and permits. These help ensure that your business or services follow a set of standards with regards to safety, building, and zoning.

Each state has differing laws when it comes to legal requirements for small businesses. Your local Small Business Administration office can provide you with all of the legal requirements for starting a business, but as a general rule, the following are some common licensing requirements:

• Business license. Most states will require you get a business license, which will allow you to do business in your state.
• Food handler's permit/health permit. Any business that serves or prepares food will require a food handler's permit and health permit. In addition, one that serves alcohol will require a liquor license.
• Home occupation permit. If you run your business from your home, you may also need this type of permit to legally operate a business from your home. You will also need to talk to your city hall about zoning, which will take into account such things as parking.
• Zoning permit. You will also need a zoning permit before you open for business, depending on the state you live in. If you are renting your home, you will need to talk to your landlord to make sure there isn't a problem with you operating a small home business.

You should also make sure you have the proper licensing for your employees too; hair stylists or others in the beauty industry, day care workers, and other specialized trades typically need certain licenses for their professions.

Insurance
The type of insurance you'll need for your business depends on your business and its various functions, but the following are common insurance types required by law:

• Liability. This type of insurance protects you in the event of a lawsuit, either from an employee or customer.


• Property. Property insurance will protect your building, inventory, and other equipment in the event it is damaged or destroyed.


• Auto. If your business uses company vehicles (delivery drivers, for example) automobile insurance is required.


• Home Office. If your business is run out of your home, you will need to update your existing homeowner's insurance policy to include your office equipment and anything else related to your business.

Follow labor laws
If you have employees, you will have to comply with labor and minimum wage laws within the country and state. This means making sure all of your employees are legally allowed to work in the country, and that you follow labor laws for paying overtime and scheduling for minor employees.

Starting a small business is an exciting time, but it's important to make sure your small business is legal. The above tips will help.

Rating: 0/5 (0 votes cast)

---

Categories: Small Business,

Help others find this article:
Socializer, Digg, del.icio.us, reddit, StumbleUpon

Favorites: Add to favorites
Tags: