Blog Post by Mark W. Siler
As the economic downturn drags along, many out of work individuals are taking the plunge and starting their own businesses. Perhaps you are one of those people. If you are, you probably believe you know exactly what you are doing in starting your new business. You have the great idea, you have the great business plan, you have set up your LLC or corporation (hopefully after consulting your attorney); now all that is left to do is run the business! Not so fast. While it is obviously imperative to get your business up and running as quickly as possible to start your stream of revenue, this big picture overview may cause you to overlook the details. What are those details you ask? All of the licenses and registrations that can be a small hassle to obtain when your business starts; but obtaining them in the beginning can prevent some much larger hassles in the future.
Obviously, certain licenses and registrations are specific to particular industries; however, there are several items that most businesses will need, including an Employer Identification Number (EIN) and a seller’s permit.
An EIN is similar to a social security number for your business and is used on certain business tax documents you will be required to submit for your company. An EIN is easy to obtain; you can apply for one online. While there are certain situations under which an EIN is not required (such as a single member LLC with no employees) this is generally a number your business will need. A simple rule to use is: if you ever plan on having employees or making any business related tax filing, you should have an EIN, even if you are a simple partnership.
A seller’s permit is required under Wisconsin law for every individual, partnership, corporation, or other organization making retail sales, leases or rentals of tangible personal property or taxable services in Wisconsin unless the sales are exempt from sales tax. In order to determine if you need a seller’s permit, it is generally a good idea to seek the advice of an attorney. While nearly all businesses which sell tangible goods will need a permit, if what you do is provide services, there is a good chance your activities are not subject to sales tax and you will need a seller’s permit. If you know that your business will need a seller’s permit the Wisconsin Department of Revenue suggests that you apply for your permit at least three weeks prior to opening. If you have applied for, but not yet received your permit you may begin operation but you are still liable for all applicable sales and use tax.
These are just two of the many permits and registrations that may be required for your business. The best way to determine what other permits and registrations you need is to discuss it with someone who knows the lay of the land for your industry. Seek the advice of someone else in the business or from a trade association. For legal and tax requirements seek advice from an attorney or accountant. While nothing can replace these trusted advisors, there is some guidance for those who wish to organize and operate their businesses without the costs associated with such advisors. For those individuals, the State of Wisconsin does provide some guidance on the “Build Your Business” page of the Wisconsin.gov website. This page can help with many questions facing an entrepreneur starting or growing a business including issues with respect to permits and registrations. However you do it, make sure your business is properly licensed and registered; it will make operation much easier as your business grows and prospers.