Making Your Business Legal

Making Your Business Legal

Making Your Business Legal

By Leon Carlson Founder of Mister Find IT

     As mentioned in our last article (Choosing Your Niche Market), it would be ideal if you could place your niche into your business name and website domain, now it is time to make that business name legal.  Before we go about telling you how & why you want to do that, we must tell you that we are not attorneys, and this is not legal advice. This information is general education and if you want legal advice seek legal advice from a licensed attorney in your area.   We suggest that you write down about a half dozen names you would like, and the name should be no more than four words, but with your niche + something catchy within the name.  After you have chosen a name, check with the United States Patent and Trademark Office to verify that no one has that name registered or copyrighted.  You may also be required to conduct a search through your state fictitious name data base in order to make sure that no one else is using the name which you are trying to register.

registered trademark
When you see a registered trademark someone owns copyrights to that term, name, logo, or image.

Then you want to register your business name with the Secretary of State’s or Department of Corporations office for your state. To check your states forms, laws for doing business, taxation, employment etc., CLICK HERE.   Some states allow you to register online, and some states make you file paper documents in person or through the mail.   Most states require you to register with the Secretary of State’s office, a Business Bureau, or a Business Agency.

 

Secretary of state seal
Register your business with Secretary of state.

You will also need to decide what format you

want to file your business.

When it comes to types of corporations, there are typically four that are brought up: S corps, C corps, non-profit corporations, and LLCs.

DBA –  Doing Business As:  The purpose of registering a DBA name is to notify the public that a particular person or business entity is conducting business under a name other than its legal name. Assumed name (DBA) laws are consumer protection laws.

 LLC –Limited Liability Company:  Limited Liability Company: A limited liability company is created by filing a certificate of formation with your states Secretary of State. The Secretary of State provides a form that meets minimum state law requirements.  An LLC helps protect a managers personal assets from being part of any lawsuit.

LP – Limited Partnership:  A limited partnership (LP) exists when two or more partners go into business together, but the limited partners are only liable up to the amount of their investment. An LP is defined as having limited partners and a general partner, which has unlimited liability.

LLP – Limited Liability Partnership:  Limited liability partnerships (LLPs) allow for a partnership structure where each partner’s liabilities are limited to the amount they put into the business.  LLPs are common in professional business like law firms, accounting firms, and wealth managers.

Corporation – A corporation is a legal entity created through the laws of its state of incorporation. Individual states have the power to promulgate laws relating to the creation, organization and dissolution of corporations. Many states follow the Model Business Corporation Act.

Business Set Up
Each business set up has different rules for taxes, personal protection and the simplicity of operation.

 

You will also need to check with county and city regulations to see if you also need to file your business with them.  Some require filing and others don’t.  Some county or city filings may also require that you publish your new business name in the local newspaper as well.  Check with your county clerk’s office, they should also be able to tell you which cities and towns within, need additional filings.

 

county courthouse
City and or County filings may also be required.

 

After the availability of your business name has been confirmed, then you can proceed to request the business name registration forms or download the forms from the county clerks’ website for your county or from your state governments’ website.  In most cases, the total cost to register your business will be less than $300, but fees vary depending on your state and business structure.

You will also need to file for an EIN – Employer Identification Number (EIN) is also known as a Federal Tax Identification Number, and is used to identify a business entity. Generally, businesses need an EIN.  This is a free service offered by the Internal Revenue Service and you can get your EIN immediately. You must check with your state to make sure if you need a state number or charter (see link above).

 

EIN
Employer Identification Number is needed to hire employees, and to do some business in the state.

         In addition to your EIN, you will need (if required by your state) a resellers permit, (also known as a dealers’ license, resellers’ license, sales tax certificate, or sales tax id), many states offer this free, but some charge a small fee.  This allows you to not pay tax on products that you purchase to resell.  When you actually sell the product you will be required to quarterly pay state taxes, either directly or through a market place facilitator (third party websites that you sell on).  If you don’t understand or are not clear on anything in this article, be sure to contact an attorney for legal advice.

Your Resell Permit will be required by many wholesale & drop ship companies. 

 

     Wholesalers and drop shippers  require a resell permit before you can sell their products.   If you don’t have a brick and mortar shop, and are just selling online when filling out the sales tax application form, be sure to enter in “Mail Order” when asked what type of business you’re running.  Some states do not charge sales tax, so no permit is required.  Furthermore, it’s very important that your sales tax license has your business name on it and not your personal name.

All E-commerce shopping carts offer the option of adding sales tax to sales made within your home state in order to collect sales tax online. And once your customer is ready to check out from your website and complete their order, your shopping cart will automatically calculate and add the sales tax amount to the order and charge the customers’ credit card for the complete amount of the order with sales tax included.   Then it’s your responsibility to separate those sales tax funds from the sale itself and set those funds aside until it’s time to send them in to IRS.

 

Shopping Cart
E-commerce shopping carts can add sales tax.

It’s important to register and protect your business name so that no one else in your state can use it.  You may also take further protection and file it as a registered trade name with the United States Patent and Trademark Office

In some cases, you don’t need to register at all. If you conduct business as yourself using your legal name, you won’t need to register anywhere. But remember, if you don’t register your business, you could miss out on personal liability protection, legal benefits, and tax benefits.

Next post we will cover a review of Jungle Scout VS Helium 10.

 Until then have a Great Day!

(If you don’t think you’re having a great day, just try missing one.)

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