how to get a business license?

[vital]

If I wanted to start a business and make profit from it, where would I go to obtain a business license and report my income for tax purposes? How much would this cost?

 

[Amplifier]

pro tip: you don't need a business license to open most businesses

 

[iamtrout]

Depends on the type of business. Resale license?

 

[dullard]

Your state probably has lots of resources to help you (try the phone book in the government section). That would be the best place to go.

But honestly, the easiest way to find out most of the relavant regulations is to try to open a business checking account at a bank. They legally must make certain all the paperwork has been done before they can let you cash the checks. These bankers deal with people starting a new business every day. Don't underestimate their knowledge.

 

[Pepsi90919]

i got mine from the government of ontario.

 

[Scarpozzi]

Go to your local Chamber of Commerce. Inquire there...they'll ask you what you're wanting to do, etc.... Should be around $20 for the paperwork or so....

 

[CPA]

Depending on the structure of your company (Corporation, LLC, Partnership, Sole Proprietorship) you may or may not need a state Taxpayer ID. Also, many counties and states will require you to pay a fee to register your company's name. For the Feds, once you have registered with a state and secured your structure, you will need to get an FEIN. It takes a quick call or a simple one page form.

For a sole proprietorship, generally you don't have to do anything (just use your SSN), unless you are reselling, then you will need a state sales and use tax number.

 

[CPA]

Originally posted by: dullard
Your state probably has lots of resources to help you (try the phone book in the government section). That would be the best place to go.

But honestly, the easiest way to find out most of the relavant regulations is to try to open a business checking account at a bank. They legally must make certain all the paperwork has been done before they can let you cash the checks. These bankers deal with people starting a new business every day. Don't underestimate their knowledge.

Good suggestion. No bank will open a business account without a Federal ID number and a copy of your articles of incorporation, if set up as a corporation, LLC or partnership.

 

[dullard]

Originally posted by: CPA
Good suggestion. No bank will open a business account without a Federal ID number and a copy of your articles of incorporation, if set up as a corporation, LLC or partnership.

Heck, even if you do a simple "doing buisness as", the bank will make sure you have done the proper paperwork.

This isn't foolproof, a banker isn't an expert in all the potential laws. You could still miss something. But at least you can talk to someone who could probably tell you where to go in your city to find all the regulations. Someone who really wants to help you out and doesn't even charge for the advice.

 

[harrkev]

Well, my wife just opened up a business, ( http://www.covenantspice.com - slightly NSFW). It is a home-based business, over the internet. I can tell you how it works in my state.

DISCLAIMER: I am not a lawyer, and this is the flow for a sole-proprietorship. If your business grows, you should switch to an "S-corportaion" in order to save on taxes. The switchover point is around $6,000 to $8,000 in profit each year. Corporation also provides some liability protection. You can get sued and loose your business, but they won't be able to take your house, private car, etc. if you have an S-corp. Important for some businesses, not a big deal for others. Any type of contracting/construction/repair had better be an S-Corp. If you want to sell processors and motherboards, you probably don't need to bother until the tax savings make it worthwhile to switch.

First, you have to apply for a business licence in the "most local" government. If you live in a city, then that is where you go. Next, you go to the county, and finally the state. If this is a home-based business, they do not allow some things. Typically, you can't hang a sign on your front door, no customer visits, no employees working on premesis (except people who live there), no "inventory" stored on premesis. We break that rule, but the intention of the inventory rule is so that you don't have large crates sitting on your front yard. Our inventory consists of a couple of shelving units in our pantry. To me, the key question is: "is there anything that the neighbors can complain about?" If the neighbors do not even know that you have a business, then you are probably OK. For us, the only change is that the UPS guy stops by our house a couple of times a week. If you have semi trucks dropping off thousand-pound packages, that is probably not a good thing.

You will also need to apply for a ficticious name license through the state. This assumes that you are not operating under your own name. Finally, if you will be selling products, you will need to get a state tax ID number also through the state. This means that you can collect sales tax. Note that in Florida, this is a responsibility. You have to file quarterly. If you fail to file every three months, there is a big fine (something like $80).

Believe it or not, there is not much of anything to do at the federal level. Once you start making a profit, you have to file estimated income taxes quarterly. Your business tax ID is simply your social security number (at least until you become an S-corp.).

Things start to get a LOT more complicated if you have employees/contractors. Avoid that if you can.

All in all, the cost of licenses and such should be below $200, but that depends on where you live. Also check the chamber of commerce in your area. Where I live, there is a small business development council that offers free classes on the basics of a small business.

Have fun!