Small Business Legal Considerations
No matter how small your business may be, you still have to conform legally by complying with all applicable licenses, zoning ordinances and other legal regulations.
Below are some of the basic legal regulations that apply to small businesses and links to some helpful resources:
- States as well as many counties and cities require that you get a license to conduct business. They aren’t expensive and usually have to be renewed annually. View state and local regulations and how to apply for the licenses you need by zip code and business category.
- Check out all local zoning ordinances long before you open your doors for business, even if your operations will take place entirely in your own home. If you plan to have vendors or customers come to your home, there may be zoning restrictions that would prohibit it.
- To do business under a name besides your own, you need to file a “fictitious name’’ form, also called a “Doing Business As’’ (DBA) certificate. The legal name of your business is your own name if it’s a sole proprietorship, the last names of the partners if you’re structured as a partnership, and the legal name filed with your state if you’re an LLC or corporation. But if you want to give your business a catchy name, you have to register the name with a government agency. Learn more about DBA filing requirements.
- The IRS requires that you have an Employer Identification Number (EIN) if you have employees or if your business is set up as a partnership or corporation. You can apply for an EIN at no cost online at www.irs.gov.
- As an employer, you’re required to set up records for withholding federal and state taxes, including a Federal Income Tax Withholding form W-4 and a Federal Wage and Tax Statement form W-2. The federal Employer’s Tax Guide has more information.
- If you want to do contract work for the federal government or bid on government contracts, you need two registrations: the first is a Dun & Bradstreet (D-U-N-S) number, a 9-digit identification number for each physical location of your business, and a CCR (Central Contractor Registration), which is a database of all vendors who do business with the government. You also have to fill out an Online Representations and Certifications Application to provide more information about your business. This can all be done online.
- Make sure you protect your creation.
– Trademark—Keeps anyone else from using your brand name or logo. Register with the U.S. Patent and Trademark Office.
– Patent—Protects a product you have invented from being pirated or copied. Also registered at the U.S. Patent and Trademark Office.
– Copyright—Protects creative work, such as books, software, art, music. Register with the U.S. Copyright Office.
Legal and taxation requirements may seem intimidating, but it’s important to get it right. This information is intended to help small business owners understand the basics of starting a business, but it does not replace professional legal and tax advice. Please consult with a lawyer, tax professional, or an accountant who specializes in small businesses in your state or locale.
This site is for education purposes. The material provided on this site is not intended to provide legal, investment, or financial advice or to indicate the availability or suitability of any Capital One product or service to your unique circumstances. For specific advice about your unique circumstances, you may wish to consult a qualified professional.