When it comes to forming a business and understanding the rules it can sometimes be tricky. There are different processes for creating a business and in this article, we will dive into the legal requirements that are important for your business.
We will look at the process of how to generate your business name, which states include sales tax and the difference between a DBA and an LLC.
Why do I need to generate a business name?
Regardless of which field you wish to embark your business in, you still have to come up with a unique and memorable name. While it can be heard to think of a name, there are name generators available online that can help you brainstorm and give you recommendations, by matching two words together.
Having a business name is vital for registering a DBA and an LLC. Your business name can also be searched through the U.S. Federal Database Trademark Search, in order to ensure that it is unique.
Are there places with no sales tax?
If your business includes you profiting from selling goods, you will need to register your Sales Tax with the state that you are applying in. This in other words is called a ‘Sellers Permit’ and each state has their own policies for Sales Tax.
Most states do not tax goods that are considered necessities such as; medication, groceries, gasoline and clothing. However, examples of goods that are generally taxed are motor vehicles, home appliances, computers, books and more.
Some services are also taxed under Sales Tax, and examples include services to tangible personal property, services to real property, business services, and personal services.
There are services that are not taxed, including medical and educational services.
In order to get a Seller’s Permit, you will have to visit the state’s Department of Revenue homepage online, for the state that you are registering in. Nearly all states have Sales Tax, however, Alaska, Delaware, Hawaii, Montana, New Hampshire and Oregon are states that do not have Sales Tax. In order to get more information about Sales Tax and the regulations, you can check out free guides online.
What’s the difference between DBA and LLC?
There are two different types of registrations that your business may need. It is not necessary to have both a DBA and an LLC, but it is necessary to generate a name for them both.
An LLC stands for ‘Limited Liability Company’ and it is a US business structure that provides personal liability protection of a corporation, in case your business is sued.
An LLC is ideal for a corporation, since it helps protect you against lawsuits, helps reduce legal paperwork, prevents from your company being double taxed, and can leave a good impression on both clients and employees since it makes it more credible.
A DBA stands for ‘Doing Business As’ and is only necessary to register when you want to expand your business, by adding on additional services or products.
You will not be taxed twice under your DBA, since you will still be operating your legal entity that exists. A DBA is considered to be an additional name that is a trade name or nickname, but not the official name of your legal entity.
For example, you may have an existing business called ‘Swimming Express’, but you want to expand your business and you want to sell sunbeds too under the same business, so you register a DBA with an additional trade name called ‘Sunbeds Express.’
It is important to look into all sectors of setting up your business properly and complying with the rules. When it comes to Sales Tax, each state has different rules and regulations as to what they consider services and products under the tax law.
It is important however to start with the basics and decide as to whether your business is suitable to be an LLC or if you have an existing business and you want to expand the sales sector by getting a DBA.
If you are looking at either option, you should take advantage of using a business name generator.