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Starting a business without a business license
- Thread starter rmoyes02
- Start date
Not unless someone catches you at it.
However, if you have any employees, then you'll need one to get a EIN from the IRS, which is needed to report payroll taxes.
Chip H.
____________________________________________________________________
If you want to get the best response to a question, please read FAQ222-2244 first
However, if you have any employees, then you'll need one to get a EIN from the IRS, which is needed to report payroll taxes.
Chip H.
____________________________________________________________________
If you want to get the best response to a question, please read FAQ222-2244 first
sleipnir214
Programmer
Keep in mind, too, that one thing being a formally-organized business does for you is separate your personal finances from your business finances. This can, in the unlikely event that your business is sued, keep your personal assets protected. You can do this without the formal organization, but you have to make very sure that you keep the two sets of finances completely separated.
This isn't just for the month or so before you get the paperwork. If 3 years from now a lawyer starts taking your books apart and discovers a lapse in your keeping your finances separate from those of the business, your protection of formal organization can collapse.
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TANSTAAFL!!
This isn't just for the month or so before you get the paperwork. If 3 years from now a lawyer starts taking your books apart and discovers a lapse in your keeping your finances separate from those of the business, your protection of formal organization can collapse.
Want the best answers? Ask the best questions!
TANSTAAFL!!
And if business goes well after that Month, you may be tempted to 'extend' the Month ... until they get you eventually.
Besides, you will not be able to invoice during that period, so you are working in the 'black', which is per definiton a crime.
Marc
Besides, you will not be able to invoice during that period, so you are working in the 'black', which is per definiton a crime.
Marc
If you're in the US, usually getting a business license, is very simple, the biggest thing is having a unique name, and the money for the license. Some states do background checks others credit checks. Others just make sure your a legal resident.
Also remember you need to make sure to keep track of every little penny. If you decided to *help* your business and give it money, you need to make sure you have all your i dotted, and t's crossed. As it can be risky if you decided to start your business from your own bank account, without a clear cut separation.
Also make sure you got something you can have being sold out the door the day you open. As you don't want to open your business and have a product that your still working on. And that is mostly for PR sake, as people will be interested in seeing that new name, but when you tell them, oh we are going to do, this and this, and no proof. They lose interest in a hurry, even if you do get it out the day you promise it. Most people impulse buy, you'll lose those impulse buyers that can at least make thing break even the first month.
Another thing is to be a very aggressive penny pincher, as the business license will cost you, as well as any other start up fees, your license you won't be able to shop around for, but everything else you should be able to, and let your fingers do the walking and use that calculator your fullest advantage. I don't know how many people I've seen are so excited to start a business of their own, and get taken in by the first salesman they run into, and the whole profit for the month just went into the salesman's pocket instead of theirs. Remember if you can go without it, and let the company make the money before you spend it you'll be farther ahead. When your first starting, avoid charging, unless your sure you can pay it off quickly and still have the company pay all it's bills.
I know above sound funny, but I see it almost daily, of, "oh it's a business expense I can buy it." And then when the person is doing their books at the end, the business lost quite a bit, as some of their expenses weren't write offs, and profit didn't match spending and IRS wants them to come in for a meeting to see what the heck they did that year.
Don't be surprise if your business doesn't make a profit the first year, or even the second, if it can pay all of it's expensive and break even, then IRS considers your business being in good shape. As there are a lot of costs you don't realize until you start one up, and then it seems like it even costs you to take a breath.
Also check where you live, make sure you can have your business out of your own home as I'm assuming this is where your will be since you're thinking of not getting a license, or where ever you decide to have it, there are a lot of cities that have laws against having a business from your home, depending on what type of business it is. Also if you are planning on even getting a card for like Sam's club, for your business supplies, you will need to have your license #, to even get the special card, and a lot of times if you call up and order supplies you will need that # as some companies will sell to home consumers, and also businesses, and the businesses will get a break, but if you can't show you have that number then you got to pay consumer prices which eat into your profits.
I don't know exactly what type of business your planning but I'd recommend doing your homework and checking everything out, before you start, just so you know what the costs will be up front, and you won't get fine for not knowing and doing something bad. As well as losing your house, car, and anything else you might have, as that can easily happen in todays sue happy world.
Kitamora
Also remember you need to make sure to keep track of every little penny. If you decided to *help* your business and give it money, you need to make sure you have all your i dotted, and t's crossed. As it can be risky if you decided to start your business from your own bank account, without a clear cut separation.
Also make sure you got something you can have being sold out the door the day you open. As you don't want to open your business and have a product that your still working on. And that is mostly for PR sake, as people will be interested in seeing that new name, but when you tell them, oh we are going to do, this and this, and no proof. They lose interest in a hurry, even if you do get it out the day you promise it. Most people impulse buy, you'll lose those impulse buyers that can at least make thing break even the first month.
Another thing is to be a very aggressive penny pincher, as the business license will cost you, as well as any other start up fees, your license you won't be able to shop around for, but everything else you should be able to, and let your fingers do the walking and use that calculator your fullest advantage. I don't know how many people I've seen are so excited to start a business of their own, and get taken in by the first salesman they run into, and the whole profit for the month just went into the salesman's pocket instead of theirs. Remember if you can go without it, and let the company make the money before you spend it you'll be farther ahead. When your first starting, avoid charging, unless your sure you can pay it off quickly and still have the company pay all it's bills.
I know above sound funny, but I see it almost daily, of, "oh it's a business expense I can buy it." And then when the person is doing their books at the end, the business lost quite a bit, as some of their expenses weren't write offs, and profit didn't match spending and IRS wants them to come in for a meeting to see what the heck they did that year.
Don't be surprise if your business doesn't make a profit the first year, or even the second, if it can pay all of it's expensive and break even, then IRS considers your business being in good shape. As there are a lot of costs you don't realize until you start one up, and then it seems like it even costs you to take a breath.
Also check where you live, make sure you can have your business out of your own home as I'm assuming this is where your will be since you're thinking of not getting a license, or where ever you decide to have it, there are a lot of cities that have laws against having a business from your home, depending on what type of business it is. Also if you are planning on even getting a card for like Sam's club, for your business supplies, you will need to have your license #, to even get the special card, and a lot of times if you call up and order supplies you will need that # as some companies will sell to home consumers, and also businesses, and the businesses will get a break, but if you can't show you have that number then you got to pay consumer prices which eat into your profits.
I don't know exactly what type of business your planning but I'd recommend doing your homework and checking everything out, before you start, just so you know what the costs will be up front, and you won't get fine for not knowing and doing something bad. As well as losing your house, car, and anything else you might have, as that can easily happen in todays sue happy world.
Kitamora
dilettante
MIS
I'm not sure there is much to this for many kinds of small businesses.
If you do retail sales you may need a sales tax license. If you operate under an assumed (company) name you may need to do a "doing business as" (DBA) filing. I don't think a DBA is a "business license" by any stretch of the imagination though. That's about it for many sole proprietorships in many states, or was the last time I looked into this (over 15 years ago). The DBA cost me $4/yr back then.
Of course for some activities you may need professional licenses, etc. So far anybody is allowed to write code or make beaded belts though.
Here's a link for Michigan: Starting a Small Business in Michigan. I'm sure other states and other coutries have similar statements of "the basics" online.
If you do retail sales you may need a sales tax license. If you operate under an assumed (company) name you may need to do a "doing business as" (DBA) filing. I don't think a DBA is a "business license" by any stretch of the imagination though. That's about it for many sole proprietorships in many states, or was the last time I looked into this (over 15 years ago). The DBA cost me $4/yr back then.
Of course for some activities you may need professional licenses, etc. So far anybody is allowed to write code or make beaded belts though.
Here's a link for Michigan: Starting a Small Business in Michigan. I'm sure other states and other coutries have similar statements of "the basics" online.
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