“Today is your day! Your mountain is waiting. So…get on your way!” Oh, The Places You’ll Go! by Dr. Seuss
Ready to kick off 2018 as your own boss?
Three words: home-based business.
Home-based businesses can run the gamut from a website designer or an attorney who runs a virtual law practice (me) to a cookie baker or a holiday decorator. Yes, Virginia, you can hire someone to trim your tree and deck your halls.
What home-based business should you start? Pick an idea that matches your skills and interests and then determine if there is a market for your idea. Profits follow passion so make sure the idea excites you.
Once you have picked your “mountain to climb,” here are some simple steps to take to make sure you are legally protected as you start your business.
√ Select the Right Business Name
Get in touch with your free-thinking, creative side to come up with a great name for your business. Factors to consider include choosing a name that is informative so your customers immediately what your business is or a name that is memorable.
I chose “Lex Mater” (“The Law Mother” in Latin) because it says a couple of things about me. First, that I am a mom (see also Exhibit B, the inside of my car). Second, that I have spent a heck of a lot of time with the two institutions that still use Latin on a daily basis, the legal profession and the Catholic Church (17 years of Catholic school).
You’ll note what name I didn’t select, my name. Memorable, yes, easy to pronounce and spell, no.
Once you have selected a name for your business, make sure it’s not infringing on someone else’s trademark:
- search at your state’s Secretary of State’s Office’s website to see if you can use your business’ name in your state and county;
- do a national trademark search at the U.S. Patent and Trademark Office’s website; and
- run a series of searches with Google and other search engines.
Don’t skip this step. You don’t want to order signage and stationary and start your business only to receive a “cease and desist” letter and have to change the name of your business.
√ Select the Right Business Entity
You need to run your business through a separate business entity (something that has an independent, separate, and distinct existence from you, the business owner). Why? If you don’t, your personal assets like your home, investments, and personal property are totally exposed in the event of a lawsuit involving your business or to cover its debts.
You have several options to choose from including a limited liability company (LLC) and a S-corporation. The business entity you choose will have legal and tax consequences. Consult with a business attorney to see which one is best for your business.
One big non-legal benefit to running your business through a business entity? It makes you look legit. Instead of sounding like a “mom working at her kitchen table with a sink full of dirty dishes and Paw Patrol blaring in the background,” you are a “CEO of a corporation.”
√ Register Your Business Name
Forming your business entity will also register your business name in your state.
If you decide to roll the dice with your personal finances and not form a business entity, you should at least create a fictitious business name, also known as a “DBA” or “doing business as name” and file that in your state and county.
Finally, don’t forget to secure a domain name.
√ Get a Tax ID Number
Your customers and vendors may require a tax ID number from you for tax reporting purposes. To protect your own social security number, get a tax ID for your business, also known as an EIN, from the IRS.
√ Get an Alternate Address or Hire a Registered Agent
While you may be working from your kitchen table in your pajamas (no judgement), you may not want everyone to know where you live. Consider getting a P.O. Box.
If you have taken my advice and formed a separate business entity (this will be the third blog post and the third time in this blog post where I have mentioned this), a registered agent’s address will be substitute for your address for purposes of public notices.
√ Get Permits and Licenses
Ignorance is no excuse. Check with your local city and county offices to see what licenses and permits you are required to have. This is particularly important if you are selling food or have employees.
What’s your work/career resolution for 2018? For me, it’s getting my new solo law practice off and running. Leave a comment or send me an e-mail.
Disclaimer: This website is made available for educational purposes only as well as to give general information and a general understanding of the law, not to provide specific legal advice. By using this website you understand that there is no attorney client relationship between you and the publisher. The website should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.
Copyright © 2017 by Siobhán Fitzpatrick Kratovil. All Rights Reserved.
Tags: 2018, Home-Based Business, Resolutions