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New Business Legal Issues

Last post Wed, May 19 2010 12:23 PM by mamasjob. 4 replies.
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  • Wed, May 19 2010 10:39 AM

    • Pat
    • Top 10 Contributor
    • Joined on Tue, Mar 6 2007
    • Colorado
    • Posts 14,463

    New Business Legal Issues

     From a reader:

    I have been thinking about starting up a small side business involving printing up invitations, announcements, etc. My question is, are there any legal issues? I'm not expecting to make a ton of money that I would have to account for. I simply am wondering what I needs to do to get it going. I have heard a little about a sales tax id number. But would I need that for any amount of business I do? Or if I don't make over a certain amount am I exempt? I have a good idea, and people have told me over the years I should start something like this. I'm confused!

    Does anyone know about these things? 

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  • Wed, May 19 2010 11:06 AM In reply to

    • Toni B.
    • Top 25 Contributor
    • Joined on Sat, Apr 5 2008
    • Seneca Falls NY
    • Posts 3,826

    Re: New Business Legal Issues

    I would go to the library and look up Small Businesses and Home Based Businesses. Make sure you get more than one and from different authors so you can get different perspectives. Also consult with a financial consultant in your area. It may be in your best interest to pay for an hour of his time and have an extensive list of questions to ask. Make sure you pick one that has a solid reputation. I'd rather pay someone a one time fee to see whether starting a business is worth it or not. Finally, do extensive research to see if anyone else in your area has similar services that you plan to offer.
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  • Wed, May 19 2010 11:39 AM In reply to

    • Brandy
    • Top 10 Contributor
    • Joined on Wed, Mar 28 2007
    • Saving in South Mississippi
    • Posts 25,145

    Re: New Business Legal Issues

    Any business that deals with sales of products/items needs to pay state and possibly local taxes on the items sold. She will likely need a business license as well.

     

    The Dollar Stretcher Community Manager



  • Wed, May 19 2010 12:03 PM In reply to

    Re: New Business Legal Issues

     I run a small business out of my house.  Some things will vary per location so it is best to pay that one time fee for your tax person to set you up (and you will want a tax person to set you up because any amount you make you will have to report even if it is below a certain amount).

    You will want a tax id number -- I got mine from the state since I don't have employees.  (didn't cost) You will probably want to set it up to pay your taxes 2x a year.  You must report in on those months even if you do not make money.  You state taxation and revenue website should give you a lot of good info.

    If you will hire people to help, you will need a federal id number.

    You will need a local business license  (about $35ish give or take a year according to your city)

    If people are going to come to your house, you will need a liability rider on your home insurance for small business.  (about $100 a year)

    If you live in a HOA, you will want to go over the regulations and make sure you comply with it.  We got "approval" from our HOA provided we follow a,b and c since you never know how "moody" they can be.

    You do want to keep some form of accounting.  There are a variety of ways out their so choose what fits you best.  You want pristine records in the event there is ever any kind of dispute or court action.  

    You teach people how to treat you -- Dr Phil
  • Wed, May 19 2010 12:23 PM In reply to

    Re: New Business Legal Issues

    Your State Dept of Revenue and/or Dept of Taxation should have information on sales tax. Yes, you would have to collect and pay to the State. So you would need a tax ID number. You may also have local sales tax, check with your city.

    Information on small businesses would be extremely helpful. In my city, there is a small business organization. There may be something similar in your area.

    Good luck!

    Erika
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