If you want to be a business owner, there are rules and regulations you’ll have to meet, which are set forth by your government. Many of these requirements are fulfilled by you correctly filing the proper forms that your federal and local government provide.

Below are some of the forms required by the United States IRS, as well as links to the information you’ll need from your local, state governments.

International customers, please make sure to conform to your local government’s filing requirements.

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Federal Tax Identification Number

If you’re going into business as a sole proprietor (no employees), it’s not mandatory to file for a Federal Tax Identification Number (also refered to as a TIN, EIN, TEIN or FEIN). However, I recommend you do, primarilly to seperate your business from your personal life. Without a TIN, you’ll have to use your personal Social Security Number to identify yourself on any business related paperwork.

SS-4 Form

SS-4 Instructions 

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Form an LLC (Limited Liability Company)

You’re going to want to file your company as a Legal Entity. This will protect your PERSONAL ASSETS from lawsuits should something catastrophic happen where, let’s say you somehow become responsible for causing significant financial damage to one of your customer’s businesses.

The simplest and most comon Legal Entity formed by a sole proprietor with no employees in an LLC or Limited Liability Company. The basic steps to forming an LLC are:

1. Choose a name for your company
2. File the required paperwork for your state. Each state has different requirements, but the forms filed are typically called “Articles of Organization”
3. Pay the required Filing Fee (anywhere from about $50 to over $600 depending on where you file).
4. A few states require that you publish a “Notice of Intent to form an LLC.”
5. Obtain the necessary state business license, as described below.

Filing for an LLC is easy enough that it can be done completely online in about 20 minutes at http://www.legalzoom.com/limited-liability-company/limited-liability-company-overview.html. Just go through their quick questionaire and they’ll complete all of the filing steps for you, delivering your finalized package to you in as little as 7-10 days.

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Specific State Forms

If you’re located in the United States, you’re going to be required to file forms specific to your state to allow you to collect and remit Sales Tax. The forms vary for each state, so please check with a qualified accountant for which specific forms you’ll need to file for your state.

If you don’t have an accountant yet, you can get the answers you need for basic questions quickly and inexpensively at http://www.justanswer.com

Live Tax Professionals are online ready to answer your questions. Post your question, enter the amount you’re willing to pay for an answer (anywhere from $9 on up), and one of the pros will provide your answer (if you ask a tough question and offer a cheap price, you might have a hard time finding someone willing to help). Satisfaction is guaranteed. You submit payment ONLY if you’re satisfied with the answer. They have UK Tax Experts too!

The below link will take you to your state’s Department of Revenue website, where you’ll be able to download any of the state forms you need.

http://www.taxadmin.org/fta/link/forms.html

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Forming a Corporation (“S Corp” or “C Corp”)

Forming a Corportation offers similar a similar level of legal protection of your personal assets, but requires a greater level of record keeping, reporting and formalities. Corporation taxes will need to be filed seperately from  your personal taxes, representing a greater expense to you for having your returns prepared every year at tax time.

Unless you’re hiring W-2 employees (different than if you’re paying other independent contractors from time to time), then forming a Corporation will be more complex and expensive for you to maintain, while offering very similar benefits that an LLC will.

A comparison chart showing the differences between the different types of business entities can be found here: http://www.legalzoom.com/business-formations/compare-documents.html

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DISCLAIMER: The information displayed on this page and throughout the SuccessfulComputerConsulting.com website is for informational purposes only and not for the purpose of providing legal advice. You should contact your accountant or attorney to obtain advice before using the any of the provided information or with respect to any particular related issue or problem. The opinions expressed at or throughout the SuccessfulComputerConsulting.com website are solely the opinions of the individual author and should not be used in place of the advice of a qualified accountant or attorney licensed to practice in your state or local province.