Your decision to start a home business must take into consideration the need to secure a business license. Of course, not all home businesses require registration. However, if you want your home business to grow, then you need to protect your business name, register with the appropriate agencies, and pay your taxes.



Advantages of Business Registration

As a legitimate home business entity, you have access to government programs and private projects that help small businesses. Banks and government agencies require registration documents, and your readiness in presenting these documentary requirements will expedite the process of releasing funds and technical support for your business.

As a legitimate home business, you can fully expand your business. You can advertise your services, avail of loans, hire more people, deal with more suppliers and get more customers, pay your taxes, and expand geographically. You can do all these without the niggling fear that, one of these days, the Internal Revenue Service and the Department of Labor, among other government agencies, will uncover your covert operations and confiscate your assets.

Business Registration Using Your Name

When you use your name to bill customers and pay suppliers, you are not required by law to register your business. However, taking your legitimate home business to the next level of partnership and incorporation is definitely easier when you have sole proprietorship records.

The first basic step in home business registration is to visit your County Clerk's Office. There are zoning ordinances and documentary requirements that you need to comply with, particularly the zoning laws. Otherwise, you have to find another legitimate home business opportunity.

In registering, you can use your social security identification as tax identification. However, it is highly recommended that you secure a separate tax ID for business purposes. You need to avoid giving out sensitive personal information like your social security number to clients and suppliers; the opportunities for fraud at your expense increase the more people know your social security details.

Business Registration under an Assumed Name

When you choose to operate under an assumed name, you should visit the County Clerk's Office and file for a "Doing Business As" (DBA) registration. You can download the form (X-201) from the Internet or buy from stores. You have to accomplish the form in 3 copies, one each for the County Clerk's Office, for the bank where you will open your account, and for your office.

The County Clerk's Office should notify you about the availability of your assumed name; once you stake your claim to it, nobody else can. This process enables you to operate your legitimate home business with a unique name, which is very important in establishing name recall and association.

You also need to put a valid address (no P.O. Boxes allowed) and all the required documents should be notarized. Again, secure separate tax identification and an Employer Identification Number (EIN), especially if you plan to buy goods at wholesale prices, hire employees, and file taxes. These are very essential requirements to make your business grow in the near future.

You can then open a business bank account, which will require your business registration, tax ID, and EIN. After that, you also need to secure a Retail tax Authorization and other licenses and permits required by law.

The process and the documentary requirements might seem circuitous and daunting to a novice like you. However, the advantages of owning a legal and legitimate home business will be well worth the trouble and the effort.