A company is a legal entity that is separate from its owners. Companies are formed to conduct business and have certain legal rights and responsibilities.
There are several companies, but the most common type is a corporation. To start a company, you need to file articles of incorporation with your state’s Secretary of State. The articles of incorporation contain basic information about the company, such as its name, purpose, and ownership structure.
Hence, if you have decided to trade through your company, you will need to be aware of several financial and legal requirements. You will also need to go through the application process and have a business plan in place.
When starting a company, there are many things you need to take into account. Below is a list of some of the most important things you should know:
1. Company Registration
To start a company, you need to file articles of incorporation with your state’s Secretary of State. The articles of incorporation, also known as the corporate charter, are basically a document that states the purpose of your company and how it will be run. It names the directors of the company and outlines the powers of the board of directors.
You will also need to file for a business license in your state. This can be done through the Secretary of State’s office or through your local county clerk’s office. Once you have your business license, you will be able to operate your business legally.
You will also need to obtain a federal tax identification number from the Internal Revenue Service. This is also sometimes called an Employer Identification Number. You will need this number when you file your taxes and when you apply for a business bank account.
For example, to register a company in Seychelles you can follow Seychelles company registration process online or you can personally visit the office and fill in the company registration form. After filling in all details for Seychelles companies, you need to submit a signed copy of the articles of incorporation and pay the filing fee. The articles of incorporation contain basic information about the company registration, such as its name, purpose, and ownership structure. Ideally, you may seek registered agents to do all of these on your behalf.
Registered agents are individuals or companies that represent businesses in their dealings with the state. They are legally required to accept service of process on a company’s behalf in the event of a lawsuit, as well as to provide notices and other documents from the state. Before deciding if you would hire one, see how these registered agent services are ranked and how their services are reviewed to ensure they would fit your needs.
In addition, some states also require that you file a fictitious name statement before actually doing any business with customers or suppliers. Fictitious names are typically used when operating under a trading name different from your legal company name. In most cases, your company’s legal name is not required on letterhead or invoices until you begin soliciting customers through mailings or advertising campaigns.
2. Company Structure
When starting a company, you must decide what type of entity you want your company to be. The typical types are corporation, limited liability company (LLC), partnership, or sole proprietor. Each type has its advantages and disadvantages. For example, decisions made by owners of a corporation are called ‘shareholder resolutions,’ rather than decisions made by partners or owners of an LLC.
A business formed as a corporation or an LLC is taxed differently from a sole proprietorship or partnership. Therefore, when choosing between the different business entities, it’s essential to carefully compare their respective features before filing articles of incorporation with the state office in which you intend to start your business.
3. Business Licenses And Permits
Many states require businesses to have specific licenses and permits to operate. The type of license or permit you need will depend on the business activities in which you are engaged. Standard licenses and permits include seller’s permit, contractor’s license, professional license, food handler’s permit, and liquor license.
You can find a list of all the licenses and permits your state requires by visiting its website or contacting the state office that oversees businesses. It is important to note that some licenses and permits may not be necessary until you begin doing business in your state. You should contact your state office to determine what licenses and permits you will need to start your company.
4. Taxes and FICA
As a company, you will need to pay employer taxes and other types of federal payroll taxes, such as Social Security and Medicare contributions. You will also need to withhold money from employees’ paychecks for income tax, state taxes, federal withholding tax, etc.
Furthermore, suppose your company employs non-U.S. citizens who are not eligible for Social Security benefits. In that case, you may have to obtain particular worker authorization documents for them or ensure they do not claim Social Security benefits while working in the United States.
Most states require businesses to register for state and local taxes before starting operations. The type of taxes you will need to pay will depend on the business activities in which you are engaged.
You can find a list of all the taxes your state requires by visiting its website or contacting the state office that oversees businesses. It is important to note that some taxes may not be necessary until you begin doing business in your state. You should contact your state office to determine what taxes you need to pay.
Starting a company exposes you to certain risks and liabilities. Therefore, you should consult with an insurance agent to determine what types of insurance are available to protect your business.
Some common types of insurance include general liability insurance, product liability insurance, and professional liability insurance. It is important to note that you may not obtain insurance if you do not have employees. Also, some types of insurance (e.g., workers’ compensation insurance) may be required by law for you to operate your company.
6. Business Plan
A business plan is a written document that outlines a company’s goals and how it plans to achieve them. It is essential to have a business plan before starting a company, as it will help you stay organized and focused. Many resources are available online to help you create a business plan for your company.
The Small Business Administration (SBA) has a helpful guide on how to write a business plan. This document is essential for two reasons. First, it provides a road map for the company’s management and employees, telling them where the business is going and what they need to do to get there. Second, it serves as a tool for attracting investors or obtaining a loan from a financial institution. Most lenders will not give you money to start your company without a business plan.
It is crucial to be aware of the legal and financial requirements needed to start a business when starting a company. You will need to have a business plan and obtain licenses and permits to run your company legally.
Also, you will need to pay taxes and register for the proper forms about employees that your company employs. Along with these steps, there are many other things an entrepreneur should be aware of when looking into starting a company.