No matter what kind of business you will be developing, you’ll need to address legal structure and get an EIN.
You’ll want to make sure your business is legal.
Employee Identification Number (EIN)
In order to be identified by the Internal Revenue Service a business entity must have an EIN number. This number is unique to each entity. It helps to identify a business for the purpose of reporting taxes and for audits done by the IRS.
Employers with employees, business partnerships, and corporations must obtain an Employer Identification Number (EIN) from the U.S. Internal Revenue Service. Even if you are a sole proprietor and don’t have employees, it is still good practice to obtain an EIN…you may need it for some government forms, banks often require it for loans and it can be used instead of your personal Social Security Number to protect against identity theft.
Apply now for your Employer Identification Number (EIN)
The General Process
Step 1: Create a business plan
For any business, the first step is to turn your basic idea into a written, viable plan of action. A well-thought out business plan is necessary for obtaining loans and is a model for your success.
Refer to the business planning section for more information.
Step 2: Decide on your business structure and register your business name
Careful consideration must be given to the management, structural and tax implications of your decision.
- To register a business name for a sole proprietorship or general partnership: Contact your local county recorder where you intend to do business.
- To file a Corporation, LLC, LLP, or Limited Partnership, contact the Secretary of State’s office for application forms and filing requirements.
For more information regarding business structures check out our section on forms of business organizations.
Step 3: Get license requirements
It is important to check with your city/town & county governments, where you intend to do business, to determine licensing requirements. The State may also require additional license or business registration paperwork to be completed.
Step 4: Obtain the necessary tax information
Taxation for small businesses may be simple or complex, depending on the size and business structure. The tax liability for each business will be different. You should consult an attorney and accountant regarding comprehensive tax planning.
Step 5: Identify sources of financing
There are multiple options for small businesses and entrepreneurs looking for funding. Each area of opportunity is listed and described in our section on funding, check it out.
Also use the Resource Navigator to do a search for organizations that provide financing in our ten, local, counties.
Step 6: Learn about employer reporting requirements and responsibilities
As an employer, you will be responsible for additional employment insurance and worker’s compensation insurance.
This includes applying for federal and state withholding numbers.
- For Federal Identification Numbers (EINs) contact the Internal Revenue Service or call (800) 829-4933
- For State sales tax and State withholding tax contact the State Department of Revenue.