One question I get a lot is: "what is the correct order of things to do when starting a new business?" While there is no perfect one-size-fits-all answer, there is a generally accepted way of doing things.
Here is the order that I typically recommend:
- Form your LLC or corporation. The reason to do this first is that all of your future agreements, whether they are leases for commercial space, contracts with suppliers, or your initial customer contracts, should be in the name of your entity. Not sure whether you need to form a LLC or corporation? Then read this article first: http://www.dietzlawfirm.com/5reasonstoincorporate.htm.
- Obtain a tax ID from the IRS. You’ll need this to open a company bank account and you can’t apply until you have your LLC or corporation approved by the State Corporation Commission.
- Open a bank account in the name of your LLC or corporation. NEVER comingle personal money and business money – it’s a bad idea for many reasons.
- Get your county business license. Every business needs to obtain a business license when starting out – check with your county or city government on how to get this done.
- Get your state tax payment information submitted. If your business involves collecting state sales tax from your customers, for instance, you will need to comply with the Virginia laws on remitting sales tax to the state.
When you follow the order above, things should flow smoothly as your new business starts.
Posted: August 14th, 2007 at 7:53 am | | Email Post |
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