After deciding to establish a company around your business concept, get into action with this simple checklist. You’re ready to launch after following these basic steps.
1.- First, make sure that you form a specific entity for your business. A corporation or LLC is most conducive to raising capital from outsiders by giving them equity in the company. Having a corporate structure also permits you to provide employee benefit plans for yourself and others after the company is successful.
2. Licenses, permits, and fees are an unavoidable part of business. You need to investigate if there are licenses required to practice in your particular industry. Sometimes, there is no legal requirement but there are optional professional credentials that can enhance your company’s marketability. For some industries permits or fees are payable at various times or for specific projects. Know when these are assessed and be prepared to pay them as required to operate your business.
3. Understand the types of taxes that apply to your business. You can hire someone to prepare the tax forms. However, even if you don’t personally fill compile the tax reports, you must know the kinds of taxes you’re paying. If you have employees, there are federal and state employment taxes—some of which are withheld from employee compensation. Most products sold are subject to sales tax. Another tax is assessed on the value of property used in business. Plus, of course, there is income tax.
4. Operating any business involves risks. Insurance offers some protections. Investigate the availability and cost of casualty insurance for business assets. In addition, certain professions carry insurance for “errors and omissions”. This is essentially professional liability insurance. A good general commercial insurance agent can help you shop around for different degrees of coverage at varying cost.
5. An efficient record keeping system is critical for any company. Accurate records permit you to quickly research any details to improve your business decisions. Most records are related to financial information. This includes data relating to revenue and expenses. Because this can involve a lot of receipts and invoices, a system of electronic records may be useful. The best records include details about purchases of specific customers and historical spending with particular vendors. Finally, don’t forget about the importance of personnel records. You should have a file for each present and past employee containing at least W-4 and I-9 forms.
Incorporating companies like ActiveFilings.com provides its clients with support after having incorporated their business. Service providers like ActiveFilings.com can be a valuable asset not only at the time of filing your state documents, but by helping you to organize your new company.