Q: Do I need a business license or permits?

A: This depends upon where you live. Most cities and counties require you to have a business license. In addition, most states require that you file your business with them as well. Requirements vary widely by locale. In addition to a state, county and city business filing, you may also be required to have a fire department permit, health department license and other permits. You can usually find out what is required online or by visiting your local county offices or city hall.

Q: Where do I get these licenses?

A: In most cases you can make your state filings online or by mail. Many county seats provide registration services, too. Business licenses can be obtained from the county or from city hall.

Q: Do I need to file with the state?

A: In most cases you will need to make the proper filings to get a bank account set up. Banks usually require this paperwork to open a business account or to add your business name to your personal account. Be prepared to provide the bank with documentation of your filings.

Q: What other considerations are there?

A: If your business is small and doesn’t have customers visiting your home, you may be fine with just the proper licenses. If you live in a community governed by a home owner’s association or covenants, you may need to check to make sure your home business is allowed under the community’s rules. If customers are visiting your home, you may need changes in local zoning laws to ensure that your business does not run afoul of restrictions regarding parking, access and public safety.

Q: What is a Fictitious Business Name?

If your business uses a name other than your own, it is a fictitious business name. This is often known as a DBA (Doing Business As). In many locales, you must file the proper paperwork to let government entities know what your business name is so they can connect it to you for tax and legal purposes. Corporations typically file their names differently and go so far as to register them with the state or federal government as a service mark, trademark or trade name. Since regulations vary, it’s best to check with your local, county or state governments.

Q: What is my status in the different business structures?

A: In a sole proprietorship or partnership, you are generally considered to be self-employed. All your income is reported through your personal tax filing. In a corporation, you are an employee. The corporation pays you through payroll, bonuses or other compensation methods and you pay your taxes like any other job.