The essentials of starting a small business: paperwork, legalities, and tax requirements

Starting a small business is an exciting venture, and for many the culmination of a dream. After you’ve done your research, created a business plan, and are ready to move ahead, you need to get to the nitty-gritty and file the paperwork to ensure that you set up your new business correctly. While paperwork, taxes, and legalities may not seem as enthralling as the other aspects of your business it is vital to get those in order to start off the right foot and protect yourself and your upcoming business in the long term.  To make things easier, we have compiled some initial info and recommendations about those first steps, including links to tax forms and legal documents.

Choose a name for your business (DBA)

Choose a business structure & register your business

Obtain the necessary  licenses and permits

Open a business bank account

Organize your bookkeeping from the get-go

Set up insurance for your small business

File tax and insurance for employees

‍Choose a name for your business (DBA)

A crucial step in establishing any business is deciding on a name. It reflects what your business is about, and appears everywhere (business documents, advertising,  tax filings, etc.).  The requirements for registering your DBA or “Doing Business As” name varies according to your business structure (which we will cover), and location, so check with your state and local government offices and websites.

Before you select a business name, make sure it’s not taken. Most states have online databases to help with that. Visit your Secretary of State to inquire if your business name is free and how you need to register it. Also, check with the US Patent and Trademark Office to ensure your name is not trademarked or in use in another state.

Once you choose a name, you’ll want to protect it.  Even if you don’t set up a website at first, reserve your name and register your site. Check the name availability at a domain registrar and reserve it.  Also, you may want to trademark your name depending on your business.

‍Choose a business structure & register your business

You’ll need to determine what business structure is best for your small business since it influences taxes and deductions, personal liability, forms you need to submit, etc. Consult with a professional to weigh the pros and cons of each. There are many business structures, but most small businesses are a Sole Proprietorship, a Partnership, or a Limited Liability Company (LLC).

Sole Proprietorship

Partnership  OR

Limited Liability Company (LLC).

‍

‍Federal Tax IDs and State IDs

Federal Tax IDs

No matter what business structure you choose for your small business, you will need to apply for a Federal Employer Identification Number (EIN) or Federal Tax ID To apply for an  (EIN) fill out an SS-4 or apply online.
‍

State Tax IDs and local registration:

Some states require you to register your business on a state level and create a State Tax ID. For a State Tax ID, visit your state’s website.  You may also need to register your small business on a local level, so visit your local government website to better understand how you need to proceed.

‍

Tax reporting resources

IRS Publication 583 – Starting a business and keeping records

IRS Publication 334, Tax Guide for Small Business

IRS Tax Calendar for Businesses and Self-Employed‍