Before starting out, make sure your business follows all applicable laws. Taking care of the legal issues associated with starting a new business will keep you on solid ground and allow you to focus on creating a thriving enterprise.



It's important that your business be on the "up-and-up" right from the start. Taking care of the legal issues associated with starting a new business will keep you out of hot water in the future. Here are the first steps you need to take:

1. Decide on a Form of Business


The easiest business entity to set up is a sole proprietorship. .



As a sole proprietor you control the business entirely. You are, in effect, lawfully viewed as one and the same with your business. All assets and profits belong solely to you. You are also personally liable for all debts and legal actions brought against your company.



If you're concerned about potential liability from legal actions against your company, you have the option of forming a corporation or a limited liability company.


2. Register Your Business Name


Your business name must be registered if it is something other than your full legal name. This is a way of informing the public that you will be doing business as an assumed, or "fictitious" name.



Generally, a search is done to ensure your name is not already in use, and an application is submitted to make it official. You can investigate current use of your chosen business name by looking in your local phone book and browsing online listings.



The details of registering varies from country to country, so check with your country office for specifics. Either give them a call or check for online information using the governmental directory.



It's also a good idea to find out if your chosen name is taken in the form of a state or federal trademark. You can utilize the services of the patent and trademark office. They provide an online trademark search service, and, if desired, allows you to also apply for a trademark or patent online.



For complete assurance that your business name is not already taken, you may want to consider employing a competent lawyer specializing in trademark and patent law.


3. License Your Business


Licensing of your business depends on the type of business you plan to start. Licensing occurs on your state / county and/or local level. Federal licensing is only necessary for businesses who engage in specific, controlled activities (things such as making firearms, alcohol, tobacco, etc.).



Many countries require a general business license, plus there may be a license required for your particular business type. You should contact some clerk office to find out what licenses you need.



Some types of businesses are required to obtain an occupational license.


4. Report Income Tax


You are responsible for filing and paying income taxes on your business. Assuming your business is a sole proprietorship, you will pay income tax on your net profits.


5. Pay Estimated Taxes

6. Pay Self-Employment Tax

7. Get a Sales Tax Certificate


Contact your state treasury office for information on obtaining a sales tax certificate. A sales tax certificate obligates you to pay applicable sales tax on goods you sell. If your product is to be sold wholesale, or if you are buying materials wholesale, inquire about a resale certificate to avoid paying taxes twice.


8. Obey Zoning Regulations


Be sure to check with your city and county offices about zoning regulations for your business location. Local governments have laws that enforce the appropriate use of property used to produce income. You don't want to be in the position of having to shut down later because of zoning violations.


9. Get Free Advice


Looking for information about small business administration is a good way to learn more about the nuts and bolts of legally operating a small business in your area. By visiting a office you will find many answer, if not all of your questions about doing business locally. Use some online locator to find your regional office. They provide personalized and free counseling to assist you in making the right decisions for your business.

Replying to [terrabrazil]:

Attending to the above steps we can put our business on a firm footing. For the average small business, doing these things is enough to let you charge full speed ahead.

However, no two businesses are alike, and it's not a bad idea to consult with a lawyer and accountant for additional information pertaining to your type of business.

Doing so may prove valuable for you, both before startup and later on as your business becomes more complex.

Replying to [terrabrazil]:

Replying to [terrabrazil]:

Your list is very good as a general guide line or at least as food for thought. Though the legal situation can be (and often is) quite different from country to country.

Here in Mexico I don't care about zoning regulations (except for when I want to deal with explosives, etc.), but 3 miles north of here, in the US, it's a major issue. Here I'm free to use a fictitious name, as long as I also put my real name on invoices and other "offical" documents, but in some countries you can't do that, etc.

So, again, it's a good list, but has to be taken with a grain of salt and adapted to each country.

Replying to [terrabrazil]:

Its a good list and a good topic. But I agree with the last guy. The only missing things in my opinion, would be pointing out some things that might change from country to country (not everything, obviously, but the main, most important things).




thank you

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Replying to [terrabrazil]:excellent starting point for all those who are about to take the plunge. there are some very valuable lessons to be learned in this article. while not everything is covered certainly some of the most important parts are. good work!!

Replying to [adimec]:


Hey adimec. Thanks for your comment. You are right! There's a lot of details I missed. Here in Brazil it also changes from state to state. I tried to talk as generality as possible about legally setting up... It would be fine if everyone could talk a little bit about your country.

This is a bureaucratic process in Brazil and we also have a high small company's index of mortality (especially in the first years of the companies). About 70% from all companies die until 2 years after their start.

Usually, basic faults of professionalization and organization are the main factors that influence this high index of mortality.

Replying to [terrabrazil]:studying...

Replying to [terrabrazil]:

Well, somewhere else you mentioned a self-check for everybody who is thinking about becoming an entrepeneur. That is a good starting point. Next thing would be to find out how well prepared you _really_ are to deal with that specific kind of merchandise you have in mind, the suppliers, the buyers and the dear and beloved government.

Then look at competition, legal limits and obligations, as well as issues like an office, warehouse, transportation, customs agents, the money you can realistically get to do the business, etc., and at the very end you might want to talk to a lawyer and an accountant to make sure you give your business the correct legal form.

That's more or less what I have in mind right now, but I have to confess that I didn't think very much about the words I just wrote. So if you or anybody else could "shape" the whole deal, that would be a great help for those who are at the edge of the "pool" and thinking about taking the plunge.

Replying to [terrabrazil]:great thank u for ur advice

Replying to [terrabrazil]:

PLEASE STOP STEALING MATERIAL FROM THE INTERNET AND POSTING IT AS YOUR OWN.

The opening article in this topic was written by the managing Editor of HomeBizTools.

The same breach of copyright law has occurred in many other topics you have posted on various forums in Alibaba falsely pretending you are the author.

It is all good material but please BE MAN ENOUGH to give credit to the actual authors / websites.