Granted that different forms of business exist, all with varying requirements, having a clear overall picture of what’s required will save you much time and effort.
Get ready to share details about the following:
1. Your business structure
Government needs to know the form your new small business will take as this will inform its legal accountability and type of taxation. Some of the different business structures you may wish to consider include sole proprietorship, partnership, limited liability company (LLC), and corporation.
2. Your business name
A registered business name implies that your startup is legally operational, in addition to being a prerequisite for receiving financial assistance from the government.
3. Is your business activity federally regulated?
If your new small business intends to deal with product/s or activity that is under the supervision of a federal agency you will need to obtain the required federal license or permit. This will be the case if you aspire to deal in the following and more:
- Manufacturing, wholesaling, importing or retailing alcoholic beverages. (Alcohol and Tobacco Tax and Trade Bureau and Local Alcohol Beverage Control Board)
- Importing or transporting animals, animal products, biologics, biotechnology or plants across state line (U.S. Department of Agriculture)
- Firearms, ammunitions and explosives. (BATF https://www.atf.gov/)
- Preparing meat products or drugs production. (FDA http://www.fda.gov/)
- Public transportation and trucking. (FMCSA https://www.fmcsa.dot.gov/)
- Offering investment advice. (SEC http://www.sec.gov/)
- Operating aircraft, transporting goods or people via air, or aircraft maintenance. (Federal Aviation Administration)
4. Is the new small business tax compliant?
It’s certainly prudent to be fully aware of your new startup’s federal tax obligations. Lots of information is available to this effect; this checklist and these guidelines should be a nice place to start.
Note that there are two types of federal tax registrations.
Employer Identification Number (EIN) – This is a requirement for corporations, LLCs, partnerships, and sole proprietorships that intend to hire employees. Get the requisite Form SS-4 from the IRS.
S Corporation Tax Form – This is applicable for corporations that wish to attain S corporation status for special tax treatment purposes. Form 2553 is required and is also obtained from the IRS website.
5. How well does the new small business handle employee affairs?
Hiring and dealing with employee affairs can be quite tricky; you basically need a good grasp of federal labor and employment laws. The SBA provides a wealth of hiring and employee information.
Also, registering with E-Verify will allow you to establish your employees’ employment eligibility.
6. Does the business have proper insurance coverage?
One of the preconditions for starting a new small business is obtaining adequate insurance coverage .
Not just any cover will do though; your type of business determines what form this insurance coverage will take.
Additionally, the business ought to have health insurance coverage in place, including the Small Business Health Options Program.
7. Is the new startup compliant with location and equipment regulations?
An assortment of regulations determines how small businesses should go about matters to do with location, zoning, leasing business equipment, and leasing commercial space, etc.
These resources from the SBA will shed more light on these issues.
8. Is your new startup conversant with business laws?
There are roughly a dozen business laws and regulations that you need to be aware of as a new small business owner; with some basic knowledge you’ll at least be able to handle various business obligations from an informed point of view.
These laws cover aspects of advertising and marketing, employment and labor, finance, intellectual property, online business, privacy, financial contracts, and so on.
The SBA offers more information about these laws.
9. How environmentally-conscious is your business?
Depending on the nature of your new small business you may need to secure some form of licensing from the Environmental Protection Agency (EPA). Find out more about what is required at http://www.epa.gov/smallbusiness.
10. In case it’s home-based…
This SBA guide offers information about what is required of home-based new small business owners.