Before you can legally operate your business, it's essential to acquire the required licenses and registrations from central, state, and local governments.
The specific documents and processes may vary depending on your business structure and location. These are some of the necessary licenses and registrations required.
To establish your business as an official entity, corporations need to file articles of incorporation, which include details such as the business name, purpose, structure, stock information, and more. Similarly, some LLCs may need to create an operating agreement to outline the company's operations.
In case you don't have an operating agreement or articles of incorporation, you'll need to register your business name. This can be your legal name, a fictitious DBA name (for sole proprietors), or a name you've chosen for your company.
Consider trademarking your business name for additional legal protection. Many states require a DBA registration, so check with your local county clerk's office for specific requirements and fees.
After registering your business, you may need to obtain an employer identification number (EIN), most commonly known as Taxpayer Identification Number (TIN) in India.
It is required for employers, sole proprieters, partnerships, corporations, government agencies, trusts, not-for-profit associations, estates of descendants, certain individuals, and other business entities.
You must file specific federal and state income tax forms depending on your business structure. Visit your state's website for information on state-specific and local tax obligations. Utilise online tax software to help you file and pay taxes quarterly and annually.
Although your turnover may still be below the threshold for attracting GST provisions, it is crucial to maintain a 15-digit number called the Goods and Services Taxpayer Identification Number (GSTIN), which is based on your state and PAN (Permanent Account Number).
Obtaining this number is free of charge and grants you access to different tax exemptions. Additionally, your company may be evaluated under the Income Tax Act for its domestic and international income, necessitating a Tax Deduction Account Number (TAN).
Certain businesses may require central, state, or local licenses and permits to operate legally. Contact your local business association to obtain a business license, and use the Small Business Administration (SBA) database to search for state and industry-specific licensing requirements.
Certain trades and professions may require professional licenses for businesses and independent contractors. Examples include commercial driver's licenses (CDL) for operating specific types of vehicles. CDLs are divided into classes A, B, and C.
Check with your city and state to determine if you need a seller's permit to collect sales tax from customers. The permit may be referred to by various names depending on the state. Register for a seller's permit through the state government website(s) where you conduct business.
It's important to note that licensing requirements and names can vary from state to state. Additionally, not all businesses need to collect sales tax or obtain a seller's permit, depending on the nature of their products or services. Consulting with a licensed attorney or business advisor can provide valuable guidance in navigating these legal requirements.
Remember, starting with a solid legal foundation will help your business operate smoothly in the long run, avoiding unnecessary complications.