Updated: May 6
Filing your LLC or incorporating is a big step, but there are several actions that should be taken prior to opening your business.
Here they are:
#1. Get a Business License
This is a very important step but most people overlook the fact that they need a business license to operate in many locations, and without doing so can lead to fines. They can be obtained from your local city government and are usually inexpensive.
2. Obtain an Employer Identification Number (EIN)
If you are going to have employees then an EIN will be mandatory. It is also required in order to open up a business bank account, which is a MUST to separate your personal funds from that of the business (see below).
An EIN is a nine digit number that allows the IRS to identify businesses for tax purposes and you can apply for it online on the IRS website.
3. Get a Bank Account for the Business
Having a separate bank account for your business not only makes it easier to track expenses, it can also protect you from being held personally liable should an issue arise, which is one of the main reasons business owners decide to form an LLC or incorporate.