Wednesday, May 13, 2009

Going Pro: Getting all your document ducks in a row

Today I thought that I would talk a little bit about the forms you need to file to officially start your business and register it with the state. DISCLAIMER: I am neither an accountant nor an attorney and the following in no way should replace the advice from either, so be sure to consult with your team and let them help you decide what is right for you.

Now that is out of the way, the first thing that you need to decide is if you need and Employer ID number (EID). If you plan to operate as a sole proprietor and do not plan to have any employees you probably do not need one.

Next, you should apply for state tax permits and registration (sales and use). This allows you to not pay sales tax on products you buy that you are not the end user - like albums. Only one person should be paying sales tax on each finished item, so if the client pays sales tax on it in the end transaction, you do not need to pay sales tax when you purchase it for resale. Like I said, I'm not an accountant, but this is the gist of the concept as I understand it. If I am wrong, please correct me in the comments then we can all learn something new together.

After that, you should check to see if there are any State Licenses or Permits required in your jurisdiction. In the State of North Carolina you are required to apply for a Photographer's Privilege License prior to setting up shop. The license year runs From July-June and are NOT prorated. Just something to keep in mind.

Next, check if there are any local licenses or permits required. These could be business licences, building permits, health permits, occupational permits, signage permits, alarm permits, or zoning permits to name a few. My local jurisdiction does not require a business permit, but does have regulations concerning the size of a home-based business relative to your houses gross square footage and signage restrictions so it pays to read the local guidelines or make a visit to their office.

After that all is left is to select your business structure (which I will not get into here) file for a DBA (doing business as) if necessary, and check on employer requirements like W-4 and W-2 if you have employees. A good place to find additional info and the forms you will need for the above are your state's Department of Commerce website or your local Small Business Association website.

Have a good Wednesday!

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