Help with starting a small business...

[GeekDrew]

I've been wanting to make my business "legal" (all I do is help a few people with their computer probs). Is all that I have to do register my business with the local clerk of courts? I really have no idea, and most of the people that I could talk to about it are impersonal jerks that won't talk at all to anyone that they consider unworthy (i.e. someone who isn't rich (I know that I won't be even if I do start a business, but who cares?)).

Thanks a ton!

 

[hzl eyed grl]

You need to register it with the local clerk. You also need to get a permit (If you rent your place.) to have a home based business. You need the owners permission to do that. Also if you want to hold the right to sue anyone under your business name I think you have to run a notice in the classifieds. I think it's a fictitous(SP?) business name notice or something like that. Anyway...I could be wrong on both cuz I'm sure each state is different. (I'm in CA.) Either way....Good luck!

EDIT: It really helps to completely finish a sentence.

 

[tontod]

Get in touch with the Better Business Bureau. You probably have to register it with your town for tax purposes. Beyond that, I'm not sure what's involved.

 

[BarbeQueGuy]

I found the Small Business Administration to be very helpful. They have a FREE program(SCORE) setup up to help you get started. You can request a meeting with them and they will direct you to the proper authorities to get your licenses.

Call your local office or contact them on the web.
SBA
SCORE

 

[UG]

This is the process in Floriduh:

If you are to be a Sole Proprietorship, a private individual doing business under a Fictitous Name -- shrinertech d(oing)b(usiness)a(s) Shrinertech Enterprises -- first you acquire a Fictitious Name registration form from the Secretary of State, Division of Corporations.

Then you fill out the form with your name, address, telephone number, the fictitious name of your business that you wish to register, and your social security number (because it also is going to be your business's tax ID number). You send the form back with a check for $50.

You then take out a public announcement classified ad in any newspaper somewhere in your county so as to announce to the world that you intend to do business under a name different than your own, and to invite any negative reponse to being about to use a name possibly registered to someone else. The ad must run for at least one week.

Once you receive confirmation your business name is registered, you apply for a municipal Occupational License and a county Occupational License.

Now you are in business legally.

Then you open a business bank account so you keep your personal finances separate from your personal finances, primarily bcause if you don't your accountant/tax preparer will think you're a twit and the IRS will not have to agree.

If you are to be a corporation:

You file with the Secretary of State, Division of Corporations your Articles of Incorporation that specify your business's name, address, number and type of shares to be issued, who's drawing up the articles, and who the Corporations Registered Agent is to be. You send the Articles to the State with a check for $70 and a transmittal letter.

When you receive the State's paperwork, fill out and submit to IRS Form SS-4 to obtain the Corporation's tax ID number (kinda like your social security number, but different), then fill out and submit to IRS Form 2553 to obtain sub-Chapter S status (better tax-related considerations and circumstances for a small business).

Once you get the corporation's tax ID number, go get your municipal and county occupational licenses and open a business bank account because you have to or the IRS will not like you very much.

Pay for everything by check (for the documentation), keep every single receipt (for the documentation), and find yourself an Enrolled Agent (for their ability to save you money and keep your ass out of trouble).

Procedures in your own state may be somewhat different. Ask a small businessman that you know how they had to do it.

 

[Russ]

<< fill out and submit to IRS Form SS-4 to obtain the Corporation's tax ID number >>



It's a good idea to do this even if you are operating as a Sole Proprietorship. If you show a loss, the IRS is far less likely to nail you under the &quot;hobby&quot; rules if you have a Federal ID# other then your SS.

Also, many banks are now requiring it for ANY business account.

Russ, NCNE

 

[UG]

The issue is officially confused. On the one hand, IRS no longer issues unique tax ID numbers to Sole Proprietorships. On the other hand, if you have a domestic employee, you have to get a tax ID number, your social security number is not good enough.

Who the hell knows how the damn system really works when the system's employees each have a different opinion?

 

[Russ]

UG,

Really? When did that start?

Russ, NCNE

 

[UG]

Couple years. See my previous edit.

 

[Russ]

Yep, I was about to point out that you cannot hire anyone without the ID. Ergo, they still issue them because all you need to do is indicate that it might be a possibility.

Russ, NCNE

 

[GeekDrew]

Thanks guys! Would it be advisable to hire a CPA for the tax work? I am a highschool student that is in all excellerated class and doing basic accounting work, but don't have any experience in that area.
Thanks!

 

[Russ]

shrinertech,

It is ALWAYS advisable to have a CPA prepare your return.

Russ, NCNE

 

[UG]

A CPA knows more accounting principles (how to organize and present financial numbers) than an EA. Expensive because they don't save you money, they only organize your numbers.

An EA knows more taxation principles than a CPA (how to spare you from needless, excess taxation, and how your numbers should be organized and presented so that you don't invite the wrath of the IRS). Not so expensive as CPAs because they save you $$$.

Some CPAs are also EAs. Even more expensive. They charge you for organizing and <cough> <cough> saving you $$$.

Any motivated person can account. So many fewer are motivated to learn the tax code and earn the IRS certification of Enrolled Agent.

 

[UG]

If you are audited by the IRS, the CPA will say &quot;you're on your own.&quot;

If you are audited by the IRS, the EA will say &quot;You stay home. I'll handle this.&quot;

The EA can represent you in Tax Court.

The CPA cannot.

The EA/CPA can represent you, but you'll pay extra for the attitude.

 

[GeekDrew]

Thanks for the replies. I will take everything into consideration while planning my business plan, actually starting the business, and such.

Thanks!