I am Reggie, a Secret Registered Agent here to assist you. As an inside guy, I have come to learn various business-related processes and concepts—from the steps on how to start a business to managing a company and ensuring compliance with state requirements.
Today, I am here to share with you some of the knowledge I have acquired. I am hoping that this information can help protect you and your company.
Start a Business
Forming a company takes tremendous effort. You should be ready for possible challenges and issues. You also have to learn and understand various aspects related to running a business.
Among the things you have to be aware of are business compliance requirements. Compliance is a great way to manage certain risks that come with a new business venture.
Things You Should Know
Compliance with state and regulatory requirements ensures smooth operations and prevents operation restrictions and penalties. Here are some of the basics that startup owners have to know:
- Business Structure – The first thing you need to decide on is the business entity structure for your company. It is a crucial factor that you have to take seriously. Your decision will determine your regulatory and tax requirements. It will also be the basis of the registration process and paperwork you need to complete.
The two most common structures are the limited liability company (LLC) and corporation. Each of them has pros and cons, so it is best to research them to find out which one suits your company’s needs and circumstances.
- Registration Process – The next step on how to start a business is the registration of your company. You need to choose a state where you will form your business. It should be where you are planning on conducting operations. Each state has its rules and compliance requirements for businesses. In most cases, the company will have to submit a form or document and pay the corresponding filing fee. If you want to learn more about the registration requirements, visit DoMyLLC’s Learning Center. You can also check out our articles for each state.
- Employer Identification Number (EIN) – This will allow you to legally hire employees, apply for certain business licenses, open a bank account under the name of your business, and pay certain federal taxes. You can get one through the website of the Internal Revenue Service (IRS).
- State Tax ID Number – Depending on the state where you plan on starting a business, you may need to obtain a state tax ID number, which is necessary for business taxes. Check the state agency in charge of business regulations to find out if you have to get one.
- Business Permits and Licenses – Since each state has its own regulations, the necessary business licenses and permits also vary. You have to research requirements at both the state and local levels. Your location, the industry you are in, and your business activities will be major determining factors on what types of licenses you will need.
- Auditing and Taxation – Typically, businesses need to carry out audit reports to summarize all of the financial transactions that they made during the past business year. A simpler way to make the task easier is to have an internal auditor. However, you may also opt to hire an external auditor to take care of your financial audit annually.
Additionally, your company needs to comply with its tax liabilities. Check with the federal, state, and local agencies to figure out how much is due. Failure to comply with your tax requirements may lead to fines and bad standing status with the state. In some cases, it may even cause administrative dissolution.
- Ongoing Compliance Requirements – Most, if not all, states require businesses to file annual or biennial reports. This document will allow the state to keep track of companies doing business within the area. This report comes with a corresponding fee, which varies per state.
In some cases, a startup also has to submit an initial statement or report a few months following the formation of the business. Make sure you check this with the state agency and your registered agent.
Compliance requirements are there to protect the interests of all the parties involved in a business. Not only will it help the state, but it will also keep your company in good standing. Preparing for those requirements is necessary if you want to know how to start a business. If you would like to learn more about business compliance, contact a reliable third-party organization like DoMyLLC today.