A limited liability company or LLC balances the relative ease and flexibility of a partnership structure with the increased risk protection and potential tax benefits of a corporate structure. LLC owners (known as “members”) are not personally responsible for any business obligations. By default, LLC members are considered self-employed and pay taxes in the same way as owners of a partnership or sole proprietorship. But an LLC can also choose to be taxed as a corporation. To form an LLC, you must file a settlement with your state. An LLC should also have an operating agreement that details how the LLC is managed and what the rights and obligations of members are. Many small business owners choose LLCs because of their simplicity and flexibility. When starting a new business, entrepreneurs must ensure that they comply with all legal obligations to operate a small business. There are a number of legal requirements for new businesses and start-ups, including financial regulations, tax obligations, and labor laws. Make sure your new business meets all legal obligations so you can focus on growing your business again.

Learn how to open your own business and find programs that help veterans and minorities get started. Are you planning to start your home business? The Small Business Administration`s 10 steps to starting your business include the licenses and approvals you need to run a home-based business. Like any other business, independent contractors must obtain the appropriate permits and licenses. Depending on your industry and where your business is located, you may need to obtain a license at the federal, state, or local level. Federal licenses are required for companies involved in activities of any kind that are supervised and regulated by a federal agency. State licenses and permits vary by location. Once approved, the Department of Valuation and Taxation will issue you with an SDAT identification number starting with a letter (“Dâ, âFâ”, “Wâ, âLâ”, “Tâ or “Z”). This number serves as the unique Maryland identifier for your business. It is important to note that this is not the FEIN number issued by the IRS and required by financial institutions to open an account.

There are different types of partnerships. If you do business with other people and are not a formal business entity, your business is automatically considered a partnership. Like sole proprietors, shareholders of a partnership are fully responsible for all debts and obligations of the business. They are also responsible for the actions of their partners – a major reason why most lawyers encourage companies to form an LLC or corporation rather than remain a partnership. Partnerships are taxed in the same way as sole proprietorships, with partners reporting their share of income, expenses, credits, profits and losses on their personal tax returns. Get federal contracts under the HUBZone program if you own a small business in an underrepresented urban or rural area. Or, as a disadvantaged small business, you may be eligible for assistance for government contracts under the 8(a) program. The SBA has several requirements to be eligible for each program. The first step to starting your business is to explore the process and ask yourself some thoughtful questions.

Now that you`ve worked on the legal aspects of starting your business, it`s time to spread the word. Many small businesses and independent entrepreneurs choose to market themselves by creating a website or increasing their social media presence. First, start by figuring out who your target market is and how to reach them. Next, think about your budget – can you afford to attend conferences to network with colleagues, or do you need more cost-effective options? For many independent contractors, a website is the gold standard, allowing the business or independent contractor to showcase their bigoriaphy, core competitions, and thought leadership. LinkedIn, Instagram, and Facebook can also be great vehicles for building your personal brand. These are all low-cost, long-range options, but make sure they fit the marketing budget you`ve identified for your business. For those who register as sole proprietors, register a “Doing Business As” (DBA) or a “Fictitious Business Name” (FBN) to register your business name. This process informs your state or local government of the name under which you operate your business. This registration does not provide trademark protection, but it allows you to create and use the name you want for trademark purposes without having to embed it.

It also does not constitute a legal entity and does not offer legal protection to the individual entrepreneur. No matter how well a company is managed, liability risks can never be ruled out. Risk is part of the cost of doing business, and it`s worth preparing. Depending on the circumstances, some insurance policies may actually be required by law as protection, similar to personal auto insurance. Depending on the location and type of business, registering, naming, licensing, and insuring a new small business can be a daunting process. Doing this job well can be rewarding, as legal problems can quickly add up – from regulators, other businesses, customers, and even a company`s own employees.