According to the Small Business Administration (SBA), nearly 80 percent of small businesses in the United States are one-person operations, and many of those are home based businesses. Here are some legal tips for ensuring you and your business are protected if you operate a home based business:
Choose the best business structure. How you structure your business will have both legal and tax consequences, so it is advisable to consult with a certified public accountant (CPA) and a Creative Business Lawye to review all your options. Download our FREE comparison chart of business entity structures here.
Is the business name taken? The name you choose for the business should be checked to ensure you are not infringing on someone else’s trademark. You can do a simple search on the U.S. Patent and Trademark Office’s website at http://www.uspto.gov/trademarks/.
Get an alternate business address. Get a P.O. Box or business mailing address in order to keep your home address private. You will also need a registered agent’s address to receive business correspondence and for public notice purposes if you are operating as a Limited Liability Company (LLC), S-Corporation, or C-Corporation.
Get a Federal Tax ID. To protect your Social Security number, it is best to obtain a tax ID (EIN) from the IRS to provide to your customers and vendors for tax reporting purposes.
Obtain local permits and licenses where needed. Some municipalities require that you get a business permit or license to operate a home based business, especially if it involves other employees or food production. Check with your local city and county offices for requirements.
If you are planning to operate a home-based business or already have one, call us today to schedule your comprehensive LIFT (legal, insurance, financial and tax) Foundation Audit. Normally, this session is $1,250, but if you mention this article and we still have room on our calendar this month, we will waive that fee.