Making Your Traditional Business Legal

One often overlooked aspect of starting your own traditional business is complying with all of the local, state, and federal regulations and requirements. It is all too easy for new business owners to put off dealing with legal issues like permits, licenses, and zoning until they after they start their business. By doing this, though, they only risk running into big problems down the road that could have been avoided or reduced with a little advance work.

Here is a checklist of the most common legal regulations and requirements for small business start-ups:

• Federal Employer Identification Number.
  • The IRS wants to know if you will have employees. Use Form SS-4, which is available from your local IRS office. You may also need to register with your state's Department of Labor. You may not need this Federal ID#, so be sure to check your local federal offices to comply if necessary.
• Seller's permit or sales tax permit.
• You will need to register with your state for this permit if you will be purchasing wholesale merchandise for resale.
• Other state licenses.
  • Requirements vary from state to state, so check with your state's Department of Commerce.
• Local licensing requirements.
  • These requirements vary; your city or county clerk's office will tell you exactly what you will need for your type of business. Most cities require that you apply for a business license. A general business license, similar to a use tax, is assessed annually for the privilege of operating a business in a jurisdiction. A fictitious name certificate is necessary if you prefer not to do business under your own name. The county clerk's office usually will handle this.
• Zoning laws.
  • Whether you are working from home or from a commercial space, check local zoning restrictions. If you live in a condo or planned community, make sure its by-laws allow you to operate a home business.

The bottom line is, ask as many questions as you can about regulations, permits, and licenses before you start your business. Then you can deal with problems ahead of time. It is cheaper and more efficient in the long run to be legal from the start. Plus, it's the law.