Small Business Questions and Answers, Q&A

: How to Make Your Business Legal

Small Business questions and answers that may be applicable to your gift basket business.

Why Should I Incorporate My Business?
The bottom line? If you’re sued by a client or customer – your personal assets will not be seized or accessible.

Incorporating your business protects your house, and any personal property you own.

The main advantage of incorporation, is the liability protection it provides its owners or shareholders. Liability is limited because the corporation is a legal entity that is separate from its shareholder owners. As a separate legal entity, the corporation has a perpetual life. Also, as a separate legal entity, the corporation is liable for its own debts and can only be held liable to the extent of the corporation’s assets. Most small businesses find that an LLC is the best corporate identity for them. When you’re ready to incorporate, you can painlessly file incorporation paperwork online at BizFilings.com, one of the oldest and most trusted online incorporation sites.

When do I need a Federal Tax ID Number [EIN]?
You don’t need to obtain an EIN (federal tax ID or Employer Identification Number) from the IRS if you’re a sole proprietor without employees. You can open your business bank account with your DBA name using your social security number (SSN), however, if you want to keep your social security number and personal information confidential – get an EIN.

What’s a DBA?
DBA is an acronym for “Doing Business As” (also known as a “Fictitious Name.”). Most states require that sole proprietorships and partnerships who are conducting business under a name other than the owner(s) must file for a DBA certificate in the county where business is conducted. The DBA certificate is generally obtained at the Clerk of Court of the county in which business will be conducted.

Do I need a Business License and if so, where do I get one?
Depending on the type of business you’re starting, you may be required to obtain local, county, State or Federal licensing. It’s important to determine which of these will be required before you start conducting any business since heavy fines are usually associated with conducting a business without proper licenses and permits. Most small and home-based businesses will only require a local business license or permit.

First call or visit online your city or county Department of Revenue. If you intend to operate a business from your home, be sure to also check local zoning requirements as well as any property covenants. Zoning requirements are those laws that regulate how property can be used and in some cases, some activities may not be allowed.
Certain businesses and professions will also require a State license. Examples include attorneys, barbers, contractors, dentists, most businesses serving food, and social workers. Each State has an agency dealing with these types of businesses.

For a very few businesses, Federal licensing is required. Examples would be a business that’s engaged in providing investment advice or dealing with firearms. In general, Federal licensing is required if the business is highly regulated by the government. It’s best to consult an attorney in these cases.

How do I get certified as a Women-Owned business?
This process is usually administered through each states individual State’s Economic Development Council. Contact your local SBA office or visit the SBA.gov website for additional information.

As a Female Entrepreneur How Do I Build a Successful Business?

While the number of women-owned businesses in the US has grown immensely over the last decade, the amount of revenue generated by these businesses has fallen behind substantially.

To combat this issue, Bankrate created a guide to help female entrepreneurs overcome challenges such as lack of funding, resources, and revenue. This guide explains how women can build successful businesses by utilizing mentorship programs, improving their credit, and applying for specialized funding.

Check it out here: Guide for Female Entrepreneurs

Can a husband and wife be a Sole Proprietorship?
No. Technically a husband and wife can’t jointly own a business as a sole proprietor; they can’t split a sole proprietorship and file two Schedule C and two Schedule SE. To avoid being classified as a partnership, a husband and wife team operating a business together should treat one spouse as an employee and the other spouse as the owner. See more information at the IRS.gov website.

What’s the difference between a copyright and trademark?
Copyrights and Trademarks are often misunderstood and confused with each other.
Here’s some basic information:

A copyright protects a “form of expression” such as writings, designs, and works of art. A copyright is automatic in that anything you write, design, or otherwise conceive, is protected by the copyright laws. This protection generally lasts for your lifetime plus 50 years.

A copyright may be registered with the US Copyright Office. Having your copyright registered will help if and when you need to defend its use by others.

A trademark is a word or series of words, a design or graphic that relates to your product, service, or company.

A trademark must be registered with the Patent and Trademark Office.

Go to:
Sole Proprietorship
Partnership
Copyrights©
Trademarks ™, ® and Servicemark