When starting a business it is imperative to have your business legally prepared. How you ask? You need to have a business license, a home occupation license, if running your business from home, a city or county license, (depending on what state you live) plus you need to register your business as fictitious if you are not using your name as a business. For instance, If John Doe has a business name as John Doe’s Grooming Parlor, a fictitious name isn’t necessary.

When opening a business in your residence, additional information is required. Some businesses require more than a city license to be fully licensed. Please check with your local city & state office for detailed information.

While it is my understanding that there are many businesses who are operating “under the table”, so to speak, I highly advise against this practice. If you are just interested in selling a few things out of your home, don’t worry about this section, as you should not have any form of tax liability for selling your own belongings. However, if you start a business to make some money, you need to look at the legal aspects of running a business. Eventually, those who operate under the table will be caught.

If you are running an internet business it is not as anonymous as some people may believe. Keep in mind, the government designed the Internet in the first place. They know how it works. Legalize it and you will sleep better at night!

Follow the steps below to get you started:

1. Determine the type of business you want to start. Sole Proprietorship, Partnership or Corporation.

- A Sole Proprietorship is the least costly and least complicated way to set up your business. Remember that a Sole Proprietorship is totally dependent upon your ability to work and have good ideas for growth. There is no other person in the business to rely on.

- A Partnership happens when two or more entrepreneurs form a company. Legal fees for setting up such an arrangement are usually more costly than those required for a Sole Proprietorship. The up side of a Partnership is more capital for growth and more ideas for how to grow the business. The downside is getting rid of a bad partner.

- A Corporation is the most complicated and most costly of the three options. The ongoing accounting, legal, and tax reporting obligations of a Corporation are much more complicated than for the other two options. Corporations have boards, shareholders, and shared responsibility for the business. It is necessary to keep everyone informed of decisions, the company’s financial status, and a host of other actions.

- It is wise to seek the advise of an attorney in the beginning stages of your business in order to avoid serious problems later on. An attorney will guide your decision about what legal form your company should take.

2. If using a fictitious name for the business, it must be registered first with the state. Call your city & state office to find out their phone number. Usually, you can do this online. Visit their site and fill out a fictitious name form. A fee may or may not apply.

3. Is your home located in the city? Some states like Florida require a county license if your business isn’t located in the city. If not sure, contact your local jurisdiction office for licensing information.

4. Running your business from home? Complete the home occupation application and the business license application. You may download the forms from your city hall website. Call your city hall office to find out their website address and fees.

5. Forward your applications and fees to your city hall office either by mail or by visiting the office. They will usually accept cash, checks, debit cards, VISA, MasterCard or American Express credit cards. Again, check with your local city hall office.

- If you visit in person with your applications and appropriate fees, you will get your business licenses the same day. However, if you do all of this by mail, you would need to wait at least 2 to 3 weeks to receive your licenses. Either way, you are on the right track

Best of luck in your business endeavors!

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