Business Licenses, & Online Tax, but Why?
- Melanie Paiz
- May 30, 2020
- 2 min read
Creating and running a successful online business, requires you to put all things in order. If the legal portion of your business is taken care of, your business will run more smoothly.
When I was starting my first business I had a boat load of questions, when it came to business licenses and taxes. Add an online presence into the mix and you'll find yourself even more confused.
If you are asking yourself, do I need to register my business? Even if it is only online? The answer is yes, but it gets tricky depending on where you live. Online taxes and business registration policies vary by State and Country. Either way here in the US if you make money through a business, you will be required to fill out tax forms to report profits and losses. Meaning you should be registered with your local City municipality, and get a State Registration if it is required. The amount of tax you charge is dependent on what laws your State has, the best way to find out is to look for your state .gov website.
Either way, if you want to play it safe, make sure you register your business. If you start making money without registering your business, you will automatically assume the role of a Sole Proprietorship. Meaning you have a very minimal amount of legal protection if you were to run into a problem. There are many business models. Here are a few:
Sole Proprietorship
Corporations: C corp or S corp (two examples)
Limited Liability Company or LLC
Partnerships
Non Profit Corporations
So why are there so many? Each one is taxed differently, so you need to asses which one will be most convenient and will provide the adequate protection for your individual business model.
Here are a few links that will help you keep your business practices legal. Some of these links will also help you better understand the business license models mentioned above.
License Types
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