Small Business Guide 1

Small Business Guide

Have you prepared your business plan? You won’t want to begin your business before you have completed your business plan! You might click the “Planning” box for business planning suggestions. 2. Are you buying a preexisting business? If you are buying a business or even just some of the assets of a business, be aware that you may inadvertently be buying previous liabilities by means of unpaid fees and experience ratings.

Get competent legal advice before investing in a business because these previous liabilities aren’t necessarily part of the regular financial documents. For potential liabilities related to the Department of Revenue, you should require the owner to provide a Tax Status Letter regarding any excellent taxes by the business. For workers’ compensation, the buyer of a business is potentially responsible for high quality owed, pending or outstanding audit assessments, as well as inheriting the claim responsibilities and their effect on future premium rates. Potential buyers should ask for the owner for information and data outlined with this Buyer Beware publication. For unemployment insurance, you might inadvertently be buying past liabilities and become held accountable for the forerunner’s debt.

A business is a legal entity. It could own property, hold bank or investment company accounts, and is required to pay taxes. There are different types of business entities, each with original benefits and restrictions. The “right” choice for you depends upon your interests and needs. You’ll need sound counsel to comprehend your obligations regarding your business.

Get to know the business structure options and discuss them with your advisors to determine which will be ideal for you. Find legal, tax, and business (SCORE, Small Business Development Centers) advisors. The number of owners and prepared for the future now. The types of owners – are they all individuals or are they entities (such as corporations, trusts, etc.)?

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  • 800 E. High St
  • There will be no waste collection on Christmas Day or New Year’s Day
  • ► March (26)

Federal taxes implications – Internal Revenue Service (IRS). Tax and Enrollment filing requirements and costs. Paperwork and entity management considerations. Sole Proprietorships is owned by an individual or a married couple. These businesses are cheap to form and there are no special reporting requirements. The dog owner is personally responsible (liable) for all business debts and for federal taxes.

Limited Liability Companies (LLCs) are extremely popular. The business has limited legal responsibility such as a company but has fewer governance requirements. Creating an LLC requires filing with the Washington Secretary of State. For federal fees, LLCs are treated like only proprietorships when there is one owner typically, or like partnerships when there is some owner. However, by submitting an entity classification election form with the IRS, LLCs can be treated like corporations for federal tax purposes. Although not necessary, developing an LLC should be done by making use of a qualified legal professional. Among other requirements, LLCs must build a governance record named an Operating Agreement.

General Partnerships are like single proprietorships with more than one owner. Partners share managerial responsibilities, losses, and profits, and each is personally responsible (liable) for many business debt. Because the actions of one partner can result in personal responsibility for others, partnerships have become less popular since LLCs have been with us.