steps to make my business a legal one?

Question

Even though I have read and read about how to open your own business, I am still very confused as to what the steps are.
I know I need to open an account with the SBA. I know I need to register the name with my state. I know I need a tax id or EIN # (is there a difference between the 2).

What is the first thing I would need to do? How much would it cost my business to do all this?
To be more specific, me and my partner are working together as photographers and we would like to make it legal. We don't have a set location, as we work on the location the client chooses.
Please if you have any information you can provide, I would really appreciate it.
And please refrain from looking this online and give me links. I need real information from people who know what they're talking about.
Thanks in advanced.

Answer 1

You don't need to do the account with the SBA but you do need to register with the state you live in. A form will be needed that you write down the name of your business, who the owner is, if you're a sole proprietorship or a partnership, etc. And you get an EIN# which is your tax ID (at least it is for PA and WI).

Here's info for each state, it actually works very well (yes, I know you said not to send any):
http://www.sba.gov/hotlist/license.html

Every state differs. Since I sell at events or out of my home via internet sales, I needed a mobile sellers permit. A mobile sellers permit in WI cost me $10, it renews automatically each year for free, and I owe sales tax at the end of Jan. for the previous year.

A mobile sellers permit for PA where I do one event cost me $15 and renews automatically for free, but I have to file sales tax twice a year.

I just contacted the IL revenue dept. this afternoon about getting a business license to do one show down in Chicago in November--he walked me through the website and I printed out the 4 page form, state sales tax on that is due every month, but since it's a one time event I just need to call after the event and suspend the license till I need it in IL again. It's a free thing with IL, which is good, it offsets me having to report zero taxes collected for the other 11 months and I don't have to worry about upkeep of the license.
This was the main site he guided me towards:
http://business.illinois.gov/tax_info.cfm
Then he had me search for the form REG-1 which is the request for a business license (here) ---
http://www.revenue.state.il.us/taxforms/reg/reg1.pdf
That was all I needed to get started in Illinois. Free, easy, just fill out the 4 pages and send it in.

For a 'brick and mortar' actual physical store or rental property to work out of, you have to check with your local city ordinances about licensing and fees, inspections (by the fire dept. mostly), etc.

Open yourself a business account at the bank and get checks for that. That keeps your personal finances separate from the business ones.

And a tax preparer can help you with the forms at tax time.

Answer 2

Here is an easier way to get all of the information. Let me recommend that you talk to a business counselor before you do anything especially spend money. I'd call the local office of SCORE (go to http://www.score.org and input your zip code to find the chapter nearest you), the advice is FREE.

The counselor at SCORE will most likely advise you to write a business plan which is very good advice because it will force you to dig out all of the start up details and the costs of starting your business and force you to also understand all of the aspects of this business including the customers you'll concentrate on (your market ) and how you'll go after them.

They'll also help you register the business with your state controller's office and make sure that you have any city and county licenses if any are needed where you live. All of this will come out in a business plan.

Try this link :
http://www.ychange.com/small-business-consulting-articles.html and read some of the articles especially the ones about a business plan and starting a business.
Good Luck

Answer 3

Talk to your state office, but these are some steps off the top of my head. Some of these you have already mentioned.
1- File with the state for a fictitious name, that is the name of the business. In pa, this costs about $25, and I am sure it varies, but it seems to normally nominal.
2- Contact the IRS to apply for an EIN, so that it is not under your SS# anymore. I believe that is free.
3- Then you can open your bank account under the business EIN.
4- contact local offices (county and/ city) for occupancy permits, tax permits, and the like.

additionally there is a phone number/ web site that might help. 1-800-FED-INFO. When I had a question about my wife's school, they gave information on federal, state, and local levels with names, addresses, phone numbers, and sometimes even a web-site. They are just a great source of information.

Good Luck,\
Vic

Answer 4

You need a partnership agreement with your partner. But it doesn't have to be in writing. You can continue to work together on a handshake basis, and that will work fine as long as you don't have a dispute with each other. If you are using a fictitious name, you probably need to register that name with the county or state. That is very simple and cheap. You probably need to file a partnership tax return and you need to learn how to keep proper books so that your finances are kept separate from the business. Ask an accountant to help you with that. You don't need to open an account with the SBA unless you want a loan. If your business gets big enough, you should consider forming a corporation or an LLC to protect you from personal liability.

Answer 5

Look into a Limited Liability Corporation (LLC). This is one of the simplest corporations to form and your state should have online forms to fill out. I believe that filling out these forms will also register your company name and provide you with the tax id #. This will protect you and your partner's personal assets if someone ever sues you or seeks damages if they are hurt at one of your shoots.