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Starting a Business As a San Diego North County business attorney, I am frequently asked: "What does it take to start a business?" Generally, there are six steps to take into account when starting a business:
2. Determine the appropriate business structure; 3. File your tax and employer identification documents; 4. Obtain the necessary permits, licenses and registrations; 5. Create a business plan; 6. Comply with annual reporting requirements. 1. DECIDE ON A LOCATION FOR YOUR BUSINESS When deciding on a location for your business, certain factors need to be taken into consideration such as liabilities, taxes, incorporation costs and fees; where you want to do business; foreign entity doing business; raising capital; and reporting requirements. The decision to incorporate the entity in another state should only be made after weighing the advantages against the disadvantages. These factors should be discussed with your business attorney before you decide on a location for your business. 2. DETERMINE THE APPROPRIATE BUSINESS STRUCTURE There are several business structures that are used in setting up a business. Some of the most common entities are:
General Partnership Limited Partnership Limited Liability Company Corporation Subchapter S Corporation These entities will be discussed in further detail in my forthcoming "Legal Insights from Kelly Bagla, Esq." emails. 3. FILE YOUR TAX AND EMPLOYER IDENTIFICATION DOCUMENTS Like any individual, an incorporated entity must have its own social security number. This number is called the Employer Identification Number (EIN). This number will allow the incorporated entity to act as a sole and separate entity and allow it to pay taxes and open bank accounts. This number may be obtained through your business attorney or going online to the IRS web site. 4. OBTAIN THE NECESSARY PERMITS, LICENSES AND REGISTRATIONS Some of these permits, licenses, and registrations may include:
Securities and Exchange Commission (SEC) filing File as a foreign entity County filing Annual state or states filing Specific licenses to conduct certain types of businesses 5. CREATE A BUSINESS PLAN It has been said that the most important step in running a business is the creation of your business plan. A business plan is a detailed description of your business which allows you and others to evaluate your business. Business plans generally include the following:
Description of your product or services Sales plans and forecasts for your business Marketing and advertising strategies for your business Financial information Who is your competition 6. COMPLY WITH ANNUAL REPORTING REQUIREMENTS Your business will need to conduct annual reporting in the state of its incorporation and in any state in which the business has qualified to do business, as well as on the federal level, such as the IRS and/or the SEC. For previous "Legal Insights from Kelly Bagla, Esq.," click here. This information and web site are made available by Kelly Bagla, Esq., for educational purposes only, that is, to give you general information and a general understanding of the law, and not to provide specific legal advice. This information and web site should not be used as a substitute for competent legal advice from a licensed professional attorney in your state. Use of this information is at your own risk and the web site is provided without warranty of any kind. We make no warranties of any kind regarding the accuracy or completeness of any information on this web site, and we make no representations regarding whether such information is up-to-date or applicable to any particular situation. Kelly Bagla, Esq., expressly disclaims all liability for actions taken or not taken based on any or all of the contents of this web site, or for any damages resulting from your viewing and use of this web site. |