For small business owners, who need to comply with a myriad of tax laws, government regulations, and other requirements, what you don’t know can wind up hurting you. Getting expert advice can help you avoid legal, financial, and tax pitfalls. Since every business has its own set of challenges, it can be difficult to pinpoint which legal matters you can tackle by yourself and which ones will need expert advice. Here are just a few tax reduction strategies.
Sole Proprietorship vs Partnership
Depending on the structure of your business, you may be required, and this is easily done by you, to file the fictitious name (the “doing business as” or DBA) of your business with local and state governments. Partnerships and sole Proprietorship typically must register DBAs, but rules are different for each state. Some states simply require businesses to place a notice in local newspapers, others ask for a small fee. Contact your state government’s business department to find out the requirements.
What Is An Employer Identification Number?
Another chore that you can probably get done easily is applying for an Employer Identification Number. If you are starting a small business, you will need to obtain this number for tax purposes. IRS.gov has a free step-by-step tool that helps you quickly apply for an EIN with no extra paperwork. After completing the application and verification process, you will receive your EIN.
Many simple contracts and agreements with customers and vendors all can be made without a lawyer. Just make sure to proofread them carefully and always write them with an eye toward your future.
Some things are just too far out of most entrepreneurs’ areas of expertise though. Patenting a product can keep you ahead of the competition, but the process can be expensive and take years. Before you file, consult a patent attorney to evaluate if your product is worth patenting, find out what type of patent you should pursue, and identify what rights you will or will not have as a result of the patent.
Although forming a partnership, or a limited liability company, can potentially be done without legal help, forming a corporation is a much more complicated matter. Incorporating involves a complex set of legal and tax requirements at both the state and federal level. If the requirements are not fulfilled, you could lose precious time and money. A business formation lawyer can help guide you through the incorporation process painlessly.
Hire An Attorney
Of course, if you need to take legal action or if others are taking legal action against you, you will need to hire an attorney. Whether a lawsuit is related to copyright infringement, labor laws, health code violations, environmental damages, or other matters, make sure to hire an attorney that specializes in the field of law you are dealing with.