Ecommerce Business License: Legalizing Small Business
A lot of people want to start some kind of home-based business, but they simply don’t know where to begin. They get frustrated as the Internet is stocked with various schemes of starting Internet-based business.
The problem is that they are so multiple and so various! The solutions provided sometimes go in full contradiction. I can try to give you a few pieces of advice on how to try to start such business. The one last thing you have to ask yourself: do I really want to be a self-employed and thus self-responsible individual? If yes, here’s the advice:
I don’t know about other countries (and maybe a number of states within the US), but in general on the territory of the US the process is very similar (but, of course, for some minor local peculiarities I hope you will be able to deal with)”
1.You have to legalize your business: file the business Entity
Having such a status means that your organization is recognized by the government. There are 2 ways you can file it:
A. File a Corporation. At the moment the majority of states have online forms for filing this type of organizations. You simply come to a web-page, fill in all the required information, pay the fee and in a few days you receive all the necessary paperwork.
B. File a Fictitious Name. This way is cheaper but it doesn’t feature all the protections that a corporation does. In a number of states Fictitious Name comes under DBA (“Doing Business As…”). If you are not sure what type of business entity to file, you’d better see your accountant or attorney, for it may turn out to be a crucial decision.
2.Get a Business License
In a number of states you have to deal with a County Occupational License in the county your business is located (it costs around $30). In order to get the license you have to demonstrate your business entity papers. However, in a number of states this license is not required at all.
3.Get a Resale Certificate
In order to contact with a supplier (I mean a real product supplier but not a middleman for whom this papers doesn’t matter) you have to show your Sales Tax Certificate (Tax ID Number). Why is it required? The supplier will use is a proof to the IRS that they are not required to charge you tax on the products they sell you at wholesale
4.Open Bank Account
In order to open a bank account you’ll need you entity papers and Tax ID and sometimes a license.
5.Start up a Merchant Account
In order to open this type of account you’ll need all the above mentioned papers.
Why are all these steps required? When you’re done you will be able to charge your clients’ credit cards. All the money transactions will be made through your Merchant Account, so you see that all these steps are inevitable.
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