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| Legal requirements
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One of the first things a new business owner has to consider is the proper legal form under which the business will operate. The business can either operate as a sole proprietorship, partnership, limited partnership, or as a corporation.
Whatever the legal form of your gift basket service, you'll need to be aware of all the legalities involved. If your business is a sole proprietorship operation, you won't have many legal forms to worry about. The only legal papers required for a sole proprietorship are a business license and a fictitious-name filing with the county clerk's office.
If you choose to operate your business using a distinctive name, other than your personal name, you'll most likely be required by the city, county or state to register the name. The method of doing this will vary from state to state, but in many states you simply pay a small registration fee at the county clerk's office. Some states may require placing a fictitious-name advertisement in a local newspaper.
To find out the proper procedure for your area, contact your bank and find out if it requires a fictitious name registry or certificate in order to start a business account. If it does, the bank personnel can tell you where to obtain one. Filing a fictitious-name notice will cost anywhere from $10 to $100.
Unlike other forms of business, a sole proprietorship requires no separate income tax returns. As a sole proprietor, all of your income and expenses will be reported on Schedule C of IRS form 1040. If your aren't familiar with tax laws and regulations for business operations, you should consult with a professional accountant.
Keeping records of your business operation is also required by law. These records are used to determine your tax liability. No specific type of bookkeeping system is mandated by law, however your records must be accurate. They must also show your income, deductions, credits, and other information required by federal, state and local regulations.
If your bookkeeping skills are less than adequate, you'll need the help of a competent professional. This will mean an extra expense, but it's an expense you cannot afford to overlook.
Having accurate and complete records is not only a legal requirement, it is also an efficient and professional way to operate a business.
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