typically how long to get a business license?

JoeJITSU

JoeJITSU

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I am planning to get one...and go into the city offices tomorrow. From what I understand is you have to get something from the secretary of state beforehand. I just did a zoning and found out that I could run the business from home as long as I don't have clients come over.
I want to get this done before the end of the year so I can claim all of what I spent for my equipment. My credit card is already up to $25,000. Anyone have similar experiences or maybe can give me "pointers" or what not.? Thanks to everyone here as well. I love these forums
 
Joe,

From a timeline point of view, you should make it unless you have issues to overcome. I don't know what state you are in, but usually the state will grant a business license, and then if you are in an incorporated city, the city will also issue a city business license. Here in the west, most unincorporated areas don't have the second license. It's good that you looked into the zoning issue, since this varies quite a bit from place to place and may limit parking, employees, deliveries, total watts of motors, customers, customer parking, ADA access, property drainage, and the list goes on.

Having said that, the real issue you need to address is the structure of your business; will you be a sole proprietor, or start a corporation of some form. The sole proprietorship is very simple, but has lots of downsides such as much less tax advantage, and more personal liability. A corporate structure will (likely) improve your tax situation, but will cost more money to own, though the benefits usually add up to more than the costs. Most folks are not going to do there own corporate taxes, so if you hire a decent tax person to do a small corporate return, plan on about $500/yr. A CPA will probably be more. Your corporate licensing will probably be a bit more also. A corporate structure will limit your business liability to the assets of your corporation, in most cases, if someone trips over your tripod. This is no substitute for having insurance! If you own a house or have other assets, in concept, a corporation will offer you some shelter.

The process of incorporating is really pretty simple, so don't pay someone money to do it. There are lots of self help guides for cheap which will get you through a closely held incorporation. That is where you (and your wife if you have one) own the whole shebang. In most cases, you file a application with a form letter "articles of incorporation" with you secretary of state and then obtain a federal EIN number. This is a federal ID number for your business Once you do that, take that state license to your municipality, and they will recognize your business structure and issue the local license. AND, before the next tax season, I think by February xx, you need to elect your corporate status with the fed, telling them what type of corporation you are. If you don't do this, you are by default, a C Corp, which means you are considered a larger business, which you PROBABLY DON'T WANT, unless you have stockholders and a bunch of employees.

I would encourage you to spend a few bucks with an accountant or tax person to assess how this may help you from a tax perspective. An hour with someone knowledgeable is about all you need to start.

Grant
 
Grant,
Thanks for the response. I do live in Las Vegas, Nevada and I believe I will have to pay $500 later on today when I go to get the license. I will take your advice and most likely go with the corporate structure. I will also sit with a tax person. I am still trying to understand all of this. I am new to this and this will be our (wife & I) first business. Will talk to you later. Thank you again
 
You need to talk to a lawyer or an accountant before you decide how to structure your business. I say this because as I understand it, the advice you got above is entirely incorrect. I believe it is generally the case that the disadvantage of a corporate structure, unless you use an S corp, is how they are taxed (double taxation at both the corporate level and on distributions). But you should not base any decision on what I am saying either. This area is way too complex for you to be relying on advice on a video bulletin board. Please, do you self a favor and talk to an expert on this subject--this is not the place to try to save a few bucks by asking around for free advice. You will regret it later.

Good luck,
Kevin
 
Kwoff,

The advice I gave is entirely correct. If you read my post carefully, you will note that I advised avoiding a C corp (and one of the reasons amongst others is to avoid double taxation). There are other reasons to avoid election as a C corp. Though, if you are flooded with cash one year, and broke the next, a C corp has some advantage since you can carry profit (cash) forward within the corp and not take all of the profit as personal income in one year. If you are raising outside money or have many shareholders, a c corp becomes more important and useful.

My comment regarding electing a federal corporate status in the month of february was to make sure you AVOID becoming a c corp and do become a S corp or LLC. You will also note, that I advised Joe to talk to a tax person about his specific situation. I did advise that he not have someone make the corporate application as there are many rip-off outfits that will charge you $500 to fill out a couple of simple forms for you.

I am not a lawyer, but I have founded and owned three different corporations and have a bachelor of science in a business related major which included the study of business structure and law. I have been in business for well over 20 years. Now I do agree with you that no one should base their entire business structure on the advice from a cyberspace member on a video board, but you might want to read the post and fact check before dismissing the comments made by members.

Grant
 
My opinion is that lawyers aren't necessary for making this decision. The different forms of business and their advantages and disadvantages are covered in every basic business class. Intro to business, business management, business law, microeconomics, macroeconomics, marketing sometimes, even high school economics probably mentions it, I can't really remember. If you can't make that decision on your own you aren't ready to run a business on your own. I realize not everyone takes business classes, but my point is that information is so widespread anyone can find out what they need to.

You should definitely hire a lawyer for a lot of things, I would never advise against that, but if you don't at least have the basics down you're really hiring an executive manager with a law degree.
 
I just went to H&R Block and spoke to a CPA and he advised us to go LLC and S-corp. :)
 
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