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Comply With Business License Requirements

By: Robert D. Thomson

When you start a new business, you want to start off right. The last thing you need is a violation of state or local licensing requirements.

Incorporation isn't the end

Many entrepreneurs wrongly assume that all they need to do is incorporate their new business entity. After that, they think they're ready to do business.

Unfortunately, incorporation is only the first in a series of legal steps that you need to take. You also need to comply with all licensing and zoning requirements of your state, county and/or city governments.

State tax registration

Your state almost certainly requires businesses to register for tax purposes. The state wants to make sure they get their cut of your business' profits. And your business will have to collect sales tax (if you sell retail goods). You'll also need to withhold taxes from your employees.

In many states, this registration is done with a single form. The District of Columbia has a combined business tax registration form (FR-500) that you can even fill out online. Virginia also has a combined business registration form (R-1) that can be filled out at the Department of Taxation's website.

As you can see, your state won't let you get off without paying taxes. But at least the government makes it easy to fulfill your registration requirement.

Local business license

Even after incorporating and registering for state taxes, your local county or city government might require you to obtain a business license.

Most jurisdictions only require licenses if your annual gross receipts exceed a certain level. For Spotsylvania County, Virginia, your gross receipts must exceed $200,000. For Prince William County, Virginia, you need a business license if you gross more than $100,000 in a year.

Unfortunately, when you apply for your business license, you will also have to pay a fee. Virginia refers to this as the "BPOL" tax: Business / Professional / Occupational License tax. This fee can be a significant source of revenue for local governments.

Zoning permits

Finally, you must ensure that your business location complies with all local zoning ordinances. Zoning regulations can be a crazy mess that even lawyers can have difficulty comprehending. The easiest way to determine how they apply to you is to contact your local zoning administration, or you can ask your lawyer to take care of it.

Note that even home businesses must have zoning permits in many jurisdictions. For example, the District of Columbia and Prince William County, Virginia both require "home occupation permits." In Prince William County, these permits are free, but DC requires payment of a $33 fee.

Seek help

Businesses are subject to many regulations on all levels of government. To make sure you comply with all license, tax, and zoning requirements, you should seek help from a qualified business attorney. You don't want to risk your business by guessing what you're required to do.

Article Source: http://www.cursebustersound.com/article

Andrew Flusche is a business attorney who practices in Fredericksburg, Virginia. If you need Fredericksburg lawyers, call Andrew.

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