E-Commerce Business Legalities: Officially Forming Your Online Business And Obtaining Resale Licenses

One of the first things you should do before you prepare to launch your business is make sure your legalities are covered. This means registering, licensing and taxing. Each state and regional office has their own regulations and requirements, so be sure to check with your local Chamber of Commerce, local zoning, county auditor’s office, accountant, and lawyer for exactly what your business needs are.

The following is a basic checklist of the steps you’d need to take in making your online business legal.

• See your accountant and/or attorney to choose the best business structure for your situation (e.g. sole proprietor, Limited Liability Corpration (LLC), S-Corp, C-Corp, etc.

• Register your business name with your Secretary of State (often referred to as your DBA, or Doing Business As, name, if not using your full legal name)

• Obtain your EIN (Employer Identification Number) through the IRS (think of this as your company’s SSN)

• Research the license type(s) your business needs and organize your paperwork from the previous two steps (sales tax licenses are necessary in most states)

• Apply for your license, file and pay the associated fee (may vary by state)

• Create a schedule for renewal, if license requires annual renewal (fees apply)

• Set up a tax-paying schedule (often performed quarterly)

Once you are sure your legal bases are covered, you can take your business to the next step. (Note: This may not be an inclusive list, so make sure you check your state and local laws around your business needs. I HIGHLY recommend consulting with experts. Its better to pay them now, than pay them to straighten out a big mess later)