I can tell you there is a lot that goes into starting your own business.
As a business owner, there are tons of things you will need to remember in order to manage your business. When I was in law school, I found acronyms to be extremely helpful with assisting me in remembering things I needed to keep with me forever.
In fact, I find them so helpful I’ve established a few acronyms to assist business owners as well.
Let’s take starting a business, for example. There are a lot of things you will need and steps you need to take to form a business in the United States
I, however, have broken these things down into one simple world BUSINESS. If you just remember the word BUSINESS, you will always have the details of what you need to set up shop in the United States.
Here’s a breakdown of my version of the BUSINESS acronym
- B is for Business Concept
- U is for Unique Business Name
- S is for Structure
- I is for Identify Business Location
- N is for Notations and Paperwork
- E is for Empowerment
- S is for Setting Up the Books
- S is for Setting Up the Taxes
See? Just remember the word BUSINESS and you are all set.
Email me at firstname.lastname@example.org if you’re looking to start your business
B is for Business Concept
The very first thing you need after deciding to start a business within the United States – regardless of if you are or are not a U.S. citizen – is a business concept.
You need to ask yourself what type of business you are interested in and whether you think the business idea will generate profit.
Now, let’s look at myself as an example for a second.
I’m a business attorney. Back in 2013, I decided to go down a slightly different path an open a virtual business law firm.
Why did I make this decision?
Because it allowed me to help more people instead of being “stuck” to a specific region.
You start by having an idea based on things you are good at or interested in. And then you find a way to expand it into something that can be profitable.
U is for Unique Business Name
Once you have a business idea in mind you believe will make money, you need to name that business. For me this was easy, I followed the usual go to for law firms and went with my name as a law firm.
Depending on what type of business you are setting up, you may not want to name your business after yourself.
You, however, do need to pick a business name that makes sense. When people see the name, they should have some idea of what it is they are dealing with.
It is important to differentiate between what type of “unique” I’m referring to.
You want a unique name that isn’t claimed by another business, not a unique name that is so creative it is going to confuse people.
I highly recommend picking a few name ideas you like and then ranking them by which one you like the most.
You will need to do a check to make sure the name is not claimed by other businesses already registered in the state.
If your name is available, you can file the necessary paperwork to register your name with the county clerk’s office.
S is for Structure
Once the ball is rolling, you need to decide on a business structure.
Fortunately, I’ve written up a pretty extensive guide that details each business structure option, the benefits, the drawbacks, and how to determine the right option for you.
I highly recommend giving my Types of Business Structures guide a read when you reach this point to make an educated decision on the right option for your business.
Even with my guide, deciding on a business structure can be confusing. There is no harm in sending a message to me at email@example.com to evaluate your options and make a decision together.
I is for Identify Business Location
Whether you are located in the United States or not, your business is going to be. So, you need to identify where exactly.
If you are already in the U.S., you should just set up business locally.
If you are not a U.S. resident, I highly recommend forming your business in the state of Wyoming. It is the best and cheapest state for those who are not U.S. citizens.
N is for Notations and Paperwork
As you’ve probably picked up by now, setting up a business within the United States is a straightforward process. You follow the steps I’ve given to you, and you’ll be fine.
It shouldn’t come as too much of a surprise, but there is a fair amount of paperwork that goes into forming a business within the U.S. Here’s a quick rundown of what you need to gather in terms of paperwork.
Articles of Incorporation or Organization
Determining whether you need to file articles of incorporation or articles of organization depends on what business structure you selected.
Corporation, for example, need to file articles of incorporation. An LLC structure, on the other hand, needs to file articles of organization.
Both types of articles require you to include the business name, the business purpose, the mailing address, and managers.
Typically, you are going to benefit from reaching out to a business attorney – such as myself – to help you make sure you get this paperwork filled out and filed properly.
Certificate of Assumed Name
While I rarely recommend the structure of proprietorship (because it doesn’t offer any separation between your assets and your business assets), it is appealing because it is the easiest type of company to form.
If you decide to go with this structure, you must fill out and file a certificate of assumed name and pay a fee.
From this point on, you operate as a business under the assumed name you filed.
Just keep in mind if you run into any legal issues your personal assets will be at risk as this business structure offers no liability protection.
Employer Identification Number
Employer Identification Numbers or EIN for short are issued by the IRS. This number is the equivalent of a social security number for a business or a nonprofit entity.
An EIN is important because when you go to set up a bank account for your business, the financial institute will require an EIN to do business with you.
Fortunately, obtaining an EIN is a simple process. You just need to fill out Form SS-4 and file it with the IRS.
Just answer a few simple questions and the IRS will send you a letter with your assigned EIN.
License and Permits
Depending on what type of business you are setting up, there may be certain permits or licenses you are required to have in order to legally do business.
Child care providers and private investigators, for example, are required to have a license. And if you plan on selling or serving alcohol, you also need a liquor license.
Not having the proper licensed and permits can put you in some serious legal hot water.
If you need assistance with obtaining the right permits and licensing, I’m just a few clicks away via firstname.lastname@example.org at any time.
E is for Empowerment
Empowering your business is largely amount taking the information I’ve given you thus far and executing it.
You empower your business by:
- Filing for that EIN we discussed
- Obtaining proper permits and licensing
- Investing in proper insurance including business, liability, property, and even employee-related such as health and disability
S is for Setting Up the Books
You need to establish a record keeping system that works for your business. If you don’t have experience with accounting and record keeping, I highly recommend hiring a professional that does.
A lot of business owners also find merit in investing in business accounting software to simplify the process.
S is for Setting Up Taxes
As a business attorney, I do not give my clients tax-related advice. This, however, does not change the fact that there are a lot of taxes involved in setting up a business.
You must become familiar with taxes related to the business structure you selected.
Again, I highly recommend reaching out to a professional because taxation isn’t something you want to do wrong.
Fortunately, you can contact me at email@example.com if you’re looking to start your business.
Here’s important outline which may coming on your mind after reading this post!
- What You Need to Start a Business
- How to Start if I’m a Sole Proprietor
- How to Start as a Partnership
- How to Start as a Limited Liability Company
- How to Start as a Corporation
Here is What You Need to Start a Business (In 2020)
If you have been asking the question, “What do I need to start a business?” you are not alone. You cannot figure out the answer without seeking help from a knowledgeable attorney.
I can help you with the process. Just send me a quick email at firstname.lastname@example.org to obtain further information and to set up an appointment.
I know that it can be tough knowing what to do when you first begin an enterprise. I have helped many clients just like you. To learn more about what is required, read the following article.
It will give you a basic insight into starting a business and prospering, whether you choose to oversee business activities online or offline.
What Do I Need to Start a Business if I’m a Sole Proprietor?
If you are asking, “What do I need to start a business as a sole proprietor?” you can get your business launched fairly easily.
As a sole proprietor, you are operating as a very basic entity, and therefore starting your enterprise will be pretty easy. However, you may want to change your status later, as you will be responsible for all your business debts as an individual.
Again, a sole proprietorship is simple to form and allows you to have complete control of your company’s activities. You are immediately considered a sole proprietor if you get involved in business activities and do not register as another type of business.
When you form a sole proprietorship, you do not form a distinct business entity. Therefore, your assets and liabilities are not separate from personal liabilities and assets. As a result, you can be held for any personal business obligations.
However, you can still acquire a trade name.
You will find it difficult to raise money because you cannot sell company stock and banks are often hesitant to give loans to this type of entity.
To begin this enterprise, you will need a business bank account, and you will need to obtain a business location and business insurance. You may need to get a federal tax ID number, although this is not absolutely necessary, and you may need a license or permit to operate.
What Do I Need to Start a Business as a Partnership?
Do you need to know, “What do I need to start a business as a partnership?” If so, this type of structure does not require too much in the way of a start-up. This is the most basic structure to form for two or more people working in business together.
You will just need my help to determine if this business entity is right for you. Again, you only need to send me an email at email@example.com for further details.
You can either form a limited partnership (LP) or a limited liability partnership (LLP).
A limited partnership features one general partner who assumed unlimited liability while the other partner(s) have limited liability. Partners with limited liability have limited control over company matters.
This limitation is outlined in the partnership agreement.
Profits, for this entity, pass through to personal tax returns and the general partner, or the partner that has unlimited liability. This partner must also pay self-employment taxes.
A limited liability partnership is much like a limited partnership. However, limited liability is allocated to each owner.
Therefore, an LLP safeguards all the partners from any debts against the partnership. They also are not responsible for any misguided actions of another partner.
A partnership is often a good choice for multiple business owners or professional practices. This type of entity is often formed by businesses that want to test their company concepts before creating a more formalized business.
When you start this type of business, you will need to open a business bank account, create a partnership agreement, and buy business insurance.
What Do I Need to Start a Business as a Limited Liability Company?
Are you an LLC? If so, you may be asking, “What do I need to start a business as a limited liability company?” In this instance, you will definitely need my services as an attorney, as forming this entity can become quite involved.
I am a quick email away at firstname.lastname@example.org. Send me a message with your inquiries if you are an LLC.
An LLC allows you to enjoy the benefits of both a partnership and a corporation. An LLC will protect you from anyone suing you personally.
Therefore, it is separate from what you own personally, such as your vehicle, savings account, and house.
When you set up an LLC, profits and losses pass through to your personal income tax return. Therefore, you avoid paying corporate taxes. However, as a member of an LLC, you are considered, legally, to be self-employed.
Therefore, you are responsible for paying self-employment taxes. These taxes go to Social Security and Medicare.
LLCs often have a limited life. When a membership change is made, the LLC may dissolve or be re-formed. Again, contact me if you need to start your LLC again. My email is email@example.com.
Unless you have an agreement in place for selling, buying, or transferring ownership in the company, you will need to re-establish an LLC.
This type of entity is a good choice for higher-risk or medium-risk businesses – owners with substantial assets that need protection. An LLC also allows an LLC to enjoy a lower tax rate than it would by becoming a corporation.
When you start an LLC, you will need a federal ID number or ITIN for tax purposes, business insurance, an operating agreement put into place, articles of organization, a business bank account, and a registered agent to handle any filings or correspondence.
You will need to choose a business name as well and make sure that it is available for use through the Secretary of State’s database. An operating agreement is not necessary but should be written so you can avoid legal or financial disputes about operating the LLC.
What Do I Need to Start a Business as a Corporation?
Maybe you are asking, “What do I need to start a business as a corporation? If this describes your situation, you will first need to establish what type of corporation you wish to form.
A regular corporation is often called a C corporation and is a legal entity that is separate from the owners. Corporations make profits that must be taxed, and therefore are legally liable in this respect.
A C corporation provides the strongest safeguard for owners from personal liability. However, the cost to maintain the entity is higher. That is because you will need more extensive record-keeping and accounting, and reporting.
Unlike a partnership, sole proprietor, or LLC, a corporation always pays income tax on the profits. In some instances, the profits are taxed twice, which is called double taxation.
The company’s profits are taxed and the shareholder dividends are taxed on the shareholders’ personal tax returns.
Corporations raise capital through stock sales. This entity, or a C Corporation, is the ideal choice for medium-risk or higher-risk companies – companies that need to raise money or want to go public.
You may also wish to form an S Corporation. This special corporation is designed to avoid the issue of double taxation. An S corporation permits profits and partial losses to pass directly to the owner’s personal income tax form.
An S corporation needs to file with the IRS to receive an “S” status. This type of corporation cannot have more than 100 shareholders, and all the members must be residents of the US.
Owners still must comply with the strict filing mandates of a regular C Corporation.
This corporation is ideal for businesses that are medium-risk or high-risk but wish to avoid double taxation.
To form a “C” or “S” corporation, you need to select a name and check on its availability, register a DBA name, appoint directors, and file articles of incorporation. You also need to draft corporate bylaws and draft a shareholder’s agreement. An initial board of directors’ meeting must be held before the business begins.
You will need to issue shares of stock, register with the IRS, and open a corporate business bank account. I can help with these details. Contact me at firstname.lastname@example.org now.
What To Do Next
See? Now, all you need to remember is the word BUSINESS to know everything you need to form your own company within the United States.
One of the key points to take away from this guide of mine is not to take on everything yourself.
Don’t have experience with accounting? Hire an accountant.
Find taxes confusing? Hire a tax expert.
Most importantly, a wise business owner never goes into business without having an experienced business lawyer on their side.
If you want to know, “What do I need to start a business now?” you need my direction first. You really don’t want to start out with this type of process without consulting an attorney. Again, contact me via email at email@example.com today.
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