When you began your business I know you were excited to jump in and start selling to clients. You probably had your business plan mapped out in your mind, bought the website domain and quickly gained client interest. Then you were probably in shock because you started actually making a profit. Those are all wonderful things! Make sure to check out these 4 important legal steps of starting a business before you get too far down the rabbit hole and ensure you don’t fall into trouble later.
01. Register your business with your state’s Secretary of State
It is crucial to go to your Secretary of State’s website and get a tax ID number or an EIN number. This number makes filing taxes for you and your client easy without having to use your social security number. Also, make sure you know what type of business entity you want to be (LLC, S-Corp, Sole-proprietorship etc.). They are usually only a few dollars and it ensures that when you do business taxes later you are completely legal and the IRS recognizes your business.
02. Get a separate business bank account
You may be thinking you can easily use funds from your personal checking account to conduct business, however that gets super dicey especially around tax season. When you are mixing business with personal it is hard to decipher between what can get deducted on your taxes, what is personal spending etc. It also makes it really easy if you were to get into legal trouble for your personal assets to be at risk. Having a separate bank account makes it easy to link into Quickbooks, track your business spending and then easily file taxes on a quarterly basis without combing through months and months of transactions.
03. Apply for a Copyright
When you decide to create and sell content, you are the owner of that content. It’s important that it stays that way. If you are writing then make sure no one else steals your words. If you are an artist, then make sure no one else can put their name on your art. Copyrights are about $80 depending on the type you need for your business, but it is so worth it in the end when you know there will be legal repercussions for anyone who tries to steal your stuff.
04. Make sure your business name isn’t taken
When you are about to solidify the name of your business make sure to do a quick Google search of that name to make sure it’s original. You would be shocked how often business names are already taken. Another way to search for it is when you buy your domain for your website. Most website companies give you alternative options if the specific name you want is already taken. The Secretary of State office also tells you if that name is taken and provides close alternatives for you to use instead. You wouldn’t want to send clients to a company that doesn’t represent you well just because of a minor name confusion.
It may seem tedious to go through all of these steps, but will be so worth it around tax season when you don’t have to deal with a bunch of legal stuff getting in the way.
Your clients also take you more seriously when you take your business more seriously.