If you are starting a new business, it is not enough to be passionate about it and stay prepared with a list of legal documents necessary to set the ball rolling, explains Eric Dalius. It needs some good preparation to make the documents ready so that you can produce them at the right time to ensure a smooth start of your business.
Have a business plan
Despite not being a legal document, a business plan is necessary to flag off your entrepreneurial journey. The business plan is essential for securing finance. Having it ready will help you clearly understand what you are up to by assessing your goal and resources and then creating a road map for success by determining feasibility.
Your business should have a legal name, but you might carry out the operation under a trading name or a name different from the legal name. When using a Fictitious Business Name, you must register a DBA for it in the state where the business is incorporated. This is applicable for all business entities, including LLC, partnership, C Corporation, and even S Corporation, clarifies Eric J Dalius.
Incorporating a business is necessary to allow it to exist as a separate entity that minimizes the personal liabilities of business owners. Business incorporation enhances the business’s credibility, and the owners can avail several tax advantages besides selling stocks.
When two or more people own a business, it is necessary to execute a partnership agreement that becomes the business’s legal entity. Each partner owns a part of the company’s assets and liabilities and is responsible for other burdens, debts, profits, and legal liabilities. The agreement mentions the share of ownership and responsibilities of each partner.
LLC articles of organization
An article of Organization is a document necessary for forming an LLC (Limited Liability Company). An LLC might be for a single owner or several owners, and many companies prefer registering an LLC as the organization regulations are relaxed and fewer filing requirements. The LLC Operating agreement is like the Articles of Incorporation applicable for C Corporations.
Business license and permits
You will need a business license to start a business from your county or city government. Niche and professional businesses that require special skills to operate would require specialty licenses. Attorneys, accountants, plumbers, salon owners, and daycare businesses need special licenses.
Federal tax ID
Except for sole proprietorship businesses that do not have any employees, all LLCs, C-Corporations, or even a partnership company would require a Federal Tax ID and Employer Identification Number (EID) issues by IRS is necessary. For proprietorship businesses, the owner can use his social security number on all legal documents.
A trademark helps to protect your business’s vital assets, and it creates a unique identity of the goods that become easily distinguishable. You can use a symbol, name, word, or device, or an assortment of these that becomes the commercial identity of the goods produced.
To incorporate a business in some other state for tax benefits or any other reason, the business owner must qualify in that state. This might be necessary to expand the business.
Eric Dalius is The Executive Chairman of MuzicSwipe, a music and content discovery platform designed to maximize artist discovery and optimize fan relationships. Eric is also the host of weekly podcast “FULLSPEED” which is a podcast that features interviews with groundbreaking entrepreneurs from a variety of industries.Eric is also the founder of “Eric Dalius Foundation” where he has created 4 scholarships for US based students. Follow Eric on Twitter,Facebook,LinkedIn,Instagram & also on Entrepreneur.com