Business Licensing Help! =[

Hi Miguel,
I understand your confusion in trying to figure out what is and what isn't necessary in setting up your business.
Government websites can be complicated and they can make you feel like you're going in circles.
I suggest you call 800-679-3611 and speak to a licensing specialist who can direct you to a website that has all the necessary business license forms.

Good Luck!

Go to or call your state revenue office and they'll be able to answer your questions as well as provide the forms you need to start a business.

Also here's a link to what looks like what you're looking for to answer a lot of your questions.

www.portal.state.pa.us/portal/server.pt/document/630164/rev-588_pdf

The sellers permit is a SALES tax ID! You need it ONLY if you are selling taxable goods to a state you have a presence in. As a sole owner, that means the state in which you reside. SO, if you stay in california, you need a sales permit to sell to people in california. You need a DBA ONLY if you are a sole proprietor running a company that does NOT have your name in it. So if you were say sam homer, a business named sam homers wouldn't need a DBA. SAMS bar, or the burger bar, WOULD. The EIN is needed ONLY if you want to isolate your TINs, or you have employees, or are a C corporation, etc.... Otherwise, you don't need it.

A business permit and various licenses may be required based on where you are and what exactly you are doing.

BTW, at least in California.....

EIN FEDERAL IRS!
DBA COUNTY (county clerk)
SALES permit STATE (Department of equalization)
Various permits/licenses(federal/state/county and even CITY)!

Steve

As an accountant, I have set up many businesses in the last 27 years in several different states as well as some in Canada.

First, there is the Federal (IRS).

I would get an TIN (tax identification number) for the business name you have decided on - It is also known as an EIN (employers identification number - used for when you have employees... same as TIN - if you don't have employees, you just mark it as such, on your first report (form 941) you send to the IRS by checking the box 'no more employees').

One reason would be that banks like it, when you open up a business bank account (you can use your own social security number, if are a sole proprietor... but, I would still get the TIN anyway and not use your social security number).

Second, there is the State.

In Washington state, the simple explanation...

A). Department of Licensing:

Bob Smith Grocery - Sounds good, but not keyword thing... (Sole Proprietor - easy to do, but not as many tax benefits or liability safe) -

Maybe... Green Organtic Foods (now everyone knows what you are selling)

For $5 extra dollars you can add Green Organtic Foods to your license as a DBA (doing business as).

You can add it to your bank account, store sign, website name, etc (all legal now)... Still Sole Proprietor, though.

B). Department of Revenue:

In Washington State, they want sales tax and business and occupation tax (B&O).

In Oregon, they want State Income Tax.

C). Labor and Industries (If you have employees).

D). Employment Security (State paid unemployment, if you layoff employees)

Third, there is the Local (city and/or county)... they want some money, too.


It's the same for other entities (LLC, Limited Partnerships, Regular Corporations) except there is an additional...

Forth: State Corporate Division, to file some paperwork witht.


There are pages and pages of fine printed material covering all this, but this is kind of the basics.

It is always good to have an accountant and attorney in on your decision making.

LLC is kind of the combination of a Corporation, Partnership, and perhaps a little of Sole Proprietor.

Corporate tax benefits.

Partnership liability and assest protection (if done right).
Sole Proprietor ease of paperwork.

Again, this is just the basic idea (There are pages and pages of fine printed material covering all this).


If my clients are concerned about liability and assest protection, I usually set up both a Family Limited Partnership and a LLC... as well as a Regular Corporation.


The client is a Limited Partner and the LLC is the General Partner. They both need to be setup correctly from the onset, to be more or less bullet proof, though.

Family Partnerships have two hunderd years of case law that, to date at least, prove that it is safer than an LLC for the liability. The LLC, in this case, doesn't have anything, so nothing to loose.

The business is run as a regular 'C' corporation and never has any money, since it pays it all to the Partnership in one way or another. Nothing in the Corporation, nothing to loose.

Partnership pays to Limited Partner, Bob Smith, and Bob reports that income on his Federal, State/Province, and maybe, Local tax return.

The Limited Partner and the Assests of the partnership (house, office, car, etc.) are the protected (if it is set up correctly).

I may have said more than you were asking, but there may be other Warriors that it may help or get them to think more about their own business situation.


If you, or any other Warriors, have any particular questions, that may help or benefit other Warriors, feel free to ask.

I'll will be monitoring this thread a little closely, for awhile, since it relates to my other profession of the past 28 years.

If you, or any other Warriors for that matter, have questions that you don't really want others to see or if for some other reason you want to contact me... you can PM me...

Hope this helped some (get ya thinking more, maybe :rolleyes.

Thanks for the answers guys, its been a lot of help. Who'd of thought the amount of paperwork that has to go in to setup a legit business. But I believe it's necessary to be successful. Also, James, thanks for the great response it was very informative and I know it would be useful for other warriors that check out this thread. It's great to see warrior put a lot of thought and effort in his answer, it shows how great this forum can be. And, Gary, thanks for the PDF link I'll certainly give it a look. Thanks again everyone.

- Miguel Rivera

Under the category of good general business start-up advice, I'd recommend getting a good accountant and an experienced lawyer. There are so many issues that arise - unexpected ones- you'll need both these pros at some point.