While some of the issues regarding licenses, permits, and business names can be handled alone, some matters (including establishing your business and brand names) may require the help of a lawyer. So before you start, it's a good idea to line up a lawyer whose practice is focused on business. A good way to find a lawyer is to ask for recommendations from your accountant or business acquaintances. If you're not sure about needing help on an issue, ask your lawyer about it first. Your investment in legal fees now can help you avoid much bigger problems at a later date.
Licenses & Permits
Do I need any licenses? The answer is most likely "yes". Without this, you may be conducting business illegally. Just about all businesses need a county or city license. There may be local, county, state, and or federal licensing requirements, depending on the type of business you select. The fees associated with getting a license are typically minimal, if any.
Local licenses and permits: Your local licensing requirements and will vary. Some examples of these variations are the following:
" You may need a zoning compliance permit before you can open for business. Make sure the space you own or lease is properly zoned for the specific type of business you select.
You may need a special license if you’re conducting business out of your house, a beauty salon for example.
Are you planning on remodeling your space? You may need to get a permit, so you will want to check the building codes first.
State licenses and permits:
There are certain businesses and professions that require a state license. State licenses are often required for the following occupations:
accountants
building contractors
appraisers
cosmetologists
auctioneers
private investigators
barbers
private security guards
bill collectors
real Estate agents
Your state may require you to have special licenses if you sell certain products such as firearms, gasoline, liquor, lottery tickets, etc. You can check with your local and state government to see if your business will require any special licenses. For listings of state Web sites see our "Useful Links" section below:
Federal Licenses and Permits: For a very small number of businesses, federal licensing is a requirement. In businesses that are highly regulated by the government, federal licensing is typically required. Examples include
Broadcasting
Manufacturing tobacco alcohol, or firearms
Drug manufacturing
Preparing meat products
Ground transportation
Selling firearms
Investment advising
Where do I go to get a license? The best place to start is your local city hall or courthouse. See the city clerk, who should be able to direct you. You can also phone the city or county clerk's office with questions, or look in your local phone book under municipal government offices. Try a search online for "Your city hall" on Google or Yahoo local searches to find the Web site for your local city hall.
How about working from home? Investigate local zoning ordinances covering home based businesses. Some residential neighborhoods have strict zoning restrictions that may prevent you from doing business out of your home. Yet, it may be possible to get a variance or conditional-use permit. In many areas, attitudes toward home based businesses are becoming more supportive, making it easier to obtain a variance. Condominiums and planned communities may have bylaws that could affect your ability to do business out of your home. Also see our home based business session for those considering operating a business from their home.
Useful links:
"One stop shop" for all your license, permits and compliance requirements. Find information on business licensing in your home state:
What is a DBA? A “DBA” (also known as Doing Business As, or as a Fictitious Business Name) is the legal name, other than the owners name, you decide to give your business.
Do I need to have a DBA? Local Licenses and Permits:The answer is probably "yes", and you definitely want to take the time to find out. Most states require that you get a DBA. Sole proprietors and general partnerships operating their businesses under fictitious and or assumed names may need to apply for a DBA certificate in the county where the business is physically located. You will not be able to enforce any contracts you sign under your business name unless the name legally belongs to you. Another important point is, unless you register your DBA, other businesses will not know that you exist and may take the name.
What are the benefits to establishing a DBA? Here are some of the more important benefits to establishing a DBA:
Operate and advertise under your business name.
Prevent other businesses from using the name within your state.
Operate with a bank account under your business name.
Contact or visit your local county clerk's office and ask about the specific requirements and fees. There typically is a small registration fee. The county clerk's office will often conduct a complimentary name search for the intended business name to make sure it's not already taken. There are several online resources available to conduct searches on your intended business name as well.
Some states may require you to place a fictitious name notice in a local newspaper for specified period of time. The costs for this are usually small, and the newspaper may even file the necessary papers with the county. Consider checking with different local newspapers to see what they offer.
For the majority of states, corporations are not required to file fictitious business names unless they do business under names other than their own. The incorporation documents have the same effect that fictitious names filed for partnerships and sole proprietorships do.
Banking under your business name
The vast majority of banks will not allow you to open a bank account unless you have shown them proof of a filed DBA. It is important to have a business bank account so that you can accept payments written out to your company name. You may consider checking with different banks to see the differences in services they will offer you and the requirements they have to set up a business account.
Should I trademark my business name?
You are not required by law to do this but registering your name as a trademark is always a good idea. It provides you with protection in case another business tries to use your business name or a name that is likely to be confused with your business name. It may be smart to file an application for a federal trademark if your company is doing business in several states. Run a search with the government or through a service to determine if your name is taken.
How to Name Your Business - What's in a business name? Plenty. Not only must your name reflect your brand and be memorable, there are also a host of legal issues to consider. Here's how to choose a name that'll best suit your business.
8 Mistakes To Avoid When Naming Your Business - When choosing a name for your new company, keep these tips in mind to help you find one that will work now--and in the future.
Business small and large can suffer losses from infringement of intellectual property rights. These rights include Copyright, Trademarks, Patents and more. At www.stopfakes.gov you will find more information, articles and training modules to help protect your business
Seller’s Permit
What is a seller’s permit?
Sometimes a seller's permit is called a "certificate of resale" or a "certificate of authority." This permit lets you collect sales tax from your customers, which you in turn pay to the state. Keep in mind that a seller's permit is different from a business license. Are you engaging in retail sales? If the answer is "yes", then you probably need to register for and get a sales tax license or a seller's permit. You still would need this permit if you are also selling goods that are exempt from state sales tax. If you are selling both products and services, it is important you keep sales organized separately. Sales of services are not usually taxed in most states. Sales tax is imposed at the retail level and will vary depending on your state.
Where do I get a seller’s permit?
You can register for a sellers permit through state’s Board of Equalization, Sales Tax Commission, or Franchise Tax Board. The following is a useful link from the Irs.gov Web site to help you locate the appropriate offices in your state. IRS.gov - Register Seller's permit
Employer Identification Number (EIN)
What is the importance of an EIN?
An Employer Identification Number (EIN), also known as a federal tax ID, is similar to a social security number for your business. This nine-digit number is important because it allows you to identify your business on important government forms and official documents. Oftentimes, wholesale distributors require either a federal tax ID or a seller's permit from a retailer.
Do I need an EIN?
You are required to have an EIN in some, but not all circumstances. We recommend you get an EIN instead of using your social security number. It is safer to give out your EIN than it is to give out your personal social security number. There is no fee for receiving this from the IRS. A benefit to having an EIN is that it can help you establish credibility with whom you do business.
An EIN is required if
Your business has employees.
Your business is a Corporation or a Partnership.
You file any of these tax returns: Employment, Excise or Alcohol, Tobacco and Firearms.
You withhold taxes on income, other than wages, paid to a nonresident alien.
You have a Keogh plan.
You are involved with: trusts, IRAs, exempt organization business income tax returns, estates, real estate mortgage investment conduits, nonprofit organizations, farmers' cooperatives or plan administrators.
If you provide health insurance for your employees, you may need a National Standard Employer Identifier (NSEI) for your electronic health transactions.
How do I apply for an EIN? Fortunately the Internal Revenue Service makes it very easy to apply. You can apply by phone, fax, mail, or online. Please have a look at the links to the IRS Web site below. It is important to note that your business may also need to acquire a tax identification number from your states department of revenue or taxation.
Useful Links:
Information on EINs and how to get one from the IRS
Instructions on filling in the business plan template:
Each box has a permanent title in CAPITAL LETTERS
Below each title is a sentence starting with an "Insert here…" sentence. This will suggest information to insert. The boxes will enlarge as you take up more room so use all the space you need.
After completing each box, delete the "Insert here" sentence, which will leave only the permanent title of the box and the information you have filled in.
We suggest that you fill in each section of the business plan as you proceed through the course.
The template for all sessions 1-14 can also be downloaded into your computer as a single document:
Include sufficient research findings and background materials. Make it interesting up by the use of background data, your biography, charts, demographics and research data. When your business plan is completed, print off and assemble the 14 sections.
Many other business plan formats are available in libraries, bookstores, and software.
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