Now that you have started a business at home and opened a bank account, it is time to bring your business to life. There are legal requirements to comply, including the tax laws. You need to enlist the help of an expert to help you with these requirements in making your new business official. Register your business as your first step to make it official – learn here how to do it.
Check local zoning laws!
Local zoning laws forbid all types of businesses in some residential areas. So, residential zoning laws allow small home-based businesses to operate as long as the home is a residence and business activities can’t negatively impact the neighborhood. Indeed, it is better to check the local ordinances before launching any business. You are investing capital of your business here, of course, you don’t want it to get wasted.
It is essential to ensure that there are no imposed restrictions on home businesses if you live in a homeowners association. If you are renting a house, you must read the lease agreement.
Local business permits
Your business needs permits to operate, even if it is home-based. Some countries and cities need a home occupation permit to let the business operate from home. There are also policies like it requires a sign permit if you display a sign in your home or yard. A building permit is also needed if you plan on renovating a home to accommodate your business.
It depends on the type of business you are opening, you need additional permits. For instance, if you plan to open an in-home daycare, you need a health permit or a permit from your local fire department.
Register your business
If you plan to operate self-employed, you are not mandated to register your business. But, you prevent missing out on personal liability protection and tax benefits. If you decide to register as a sole proprietorship, you will report your business income.
A sole proprietor enjoys some lowest tax rates, but you and your business have the same entity. You are liable for business debts. Registering a business can be tricky, but your local SBA can assist you in picking the right business structure and registering it correctly.
Get a business license
A new starting business or even an existing business can’t be official without a business license. It permits the business to conduct business within your state or city. If you operate as a sole proprietor, you may not need a business license, but it is always a better idea to double-check. If you are collecting sales tax, you may need a sales tax permit.
Get more info from your state’s office secretary or local Department of Revenue.
Finally, you want to apply for an EIN or Employer Identification Number, which is assigned by the IRS to identify a business. Applying for an EIN is free and fast; it protects personal Social Security numbers. If you don’t register your business, you still have to apply for an EIN.