Category: Startup 101
Choosing a Legal Business Structure
It’s important to consider what legal business structure, or business entity, will work best for you, when you are starting a new business or if you already have one but you haven’t yet considered if you need a business entity. It’s important to choose the right business structure for you, by considering the tax and liability consequences of your actions, from establishing your business to operating it and potentially, to ending it through a sale, dissolution, or even death.
Business Entity: Sole Proprietorships
In general, any business can start as a sole proprietorship or a partnership (especially in the life coaching or similar fields) and it can stay like this unless your business needs change and you decide to choose another legal structure.
Business Entity: Partnerships
Think of a partnership like a business marriage because when 2 or more people form a partnership, they are essentially married from a business standpoint. In other words, when two or more people engage in business activity, and they have not filed papers with the state to become a corporation or an LLC by default the business is considered a partnership.
Business Entity: LLCs vs Corporations
Before the formation of LLCs came along, the only way for the owners of a business to have limited personal liability, was to form a corporation. The problem was that not many entrepreneurs wanted the hassle and expense of incorporating, not to mention the complexity of dealing with corporate taxation.
Business Entity: Corporations
When we hear the word “corporation”, most of us imagine this massive industrial empire the size of a nation, much more often more than we imagine a small business. The truth is that corporations don’t have to be big at all and in fact, most of them are not.
Business Entity: Non-Profit Entities
A non-profit organization is a group organized for purposes other than generating profit and in which no part of the organization’s income is distributed to its members, shareholders, directors, or officers, aside from the salaries of those who operate the business.
Do I Need a DBA (Doing Business As)
DBA stands for “doing business as.” It’s also referred to as your business’s assumed, trade or fictitious name. A DBA allows you to conduct business under a name other than your own; your DBA is different from your name, as the business owner, or your business’s legal, registered name.
How to Register Your Life Coaching Business
For most small businesses (including life coaching businesses), registering your business is as simple as registering your business name with state and local regulatory agencies. In some jurisdictions, you don’t need to register your business at all.
Business Permits and Licenses You Might Need
Complying with government licensing and permit requirements is a very important factor in running a business. In the United States, we have Federal, State and sometimes even local governments that regulate and ask to license certain types of businesses.
What is Sales Tax & Do I Need to Charge Sales Tax?
In the United States when you go to the store to purchase something, let’s say we go to purchase a T shirt, we buy the T shirt and when we go to the register to pay we give them cash, a debit or a credit card and they give us a receipt. When you look at the receipt, you will notice that at the end of each receipt, before the total, there is a subtotal showing the cost of the purchase, then there is the added sales tax, then the total amount, which is what you are required to pay.
