Each city's business requirements vary. The following is a general description of these requirements.
Before you sign a lease or purchase equipment:
Zoning Permit Usually you only need to get a zoning permit if you are changing the use of a building or if you are starting a home occupation business. Cities charge a nominal fee for home occupation permits ($50 is common). However businesses which want to change the existing use of a building may pay a fee, depending on the complexity of the request.
Business tax/license Most cities require anyone who conducts business in their city to obtain a business license and pay a business tax each year. The initial business license fee is usually the minimum business tax plus an administrative fee. In future years, the business tax is based on gross receipts, number of employees, or other criteria. The exact criteria depends on your type of business and your city's policies.
Home occupation permits Home occupation permits are usually issued by the Planning (or Community Development) Department and are required before you obtain a business license. Business owners must agree to comply with the city's home occupation restrictions. These generally include:
Contact the Planning Department for a complete list.
Sign permit Many cities regulate the size, color, placement and number of signs you can display. This includes temporary signs and "sandwich boards" placed on the sidewalk. They may also require a building permit to install permanent signs. In general, home businesses cannot have business signs.
Other necessary permits If you are making renovations or want to put a planter outside your door, chances are that you'll need a sign or building permit.
Fire inspections Commercial buildings are inspected annually by the fire department. This service is generally free except for restaurants, bars, theaters, and other places of public assembly, which may be charged an annual fire permit.
Handling food If you handle food in any way, you'll need a Health Permit. This is typically issued by the County Environmental Health Department.
Questions? Please contact your local city or county.
This link gives many creative and thoughtful ideas for developing a business name. It is on a commercial website which contains advertisements, but we included it because this information is not available from public or non-profit sources.
How risky is your business... and how do you respond to risk? Take this risk assessment prepared by the Southwest Initiative Foundation to find out.
Click here for a risk assessment quiz
Some warnings about being in business
Once you are in business:
Sole proprietors are owned by one person and are the most common type of ownership.
Sole proprietors are personally liable for business debts. This means if your business fails and you have unpaid business debts, you must use your personal assets to pay the debt.
Also, your business credit and your personal credit are the same, which is fine if they are both good, but a problem if either are bad.
When you fill out contracts, the legal name of a sole proprietorship is the owner's personal name. By identifying yourself as a sole proprietorship, others may think that your business is small.
Despite these drawbacks, forming a sole proprietorship is the simplest and least expensive business type.
Here are the forms to make your business legal. When you have completed this paperwork, you are ready to open a bank account, lease space, and sign any contracts.
If you have any specialized leases or contracts, you will need to find a business attorney. You should also review your business risks and determine whether you need business insurance or whether you need to trademark, patent, or copyright elements of your business.
Forming a Business Entity
Obtaining Licenses and IDs
Protection
If you are thinking of starting a business, this is the place to be. We have resources to help you go from idea to opening your business.
The first button for micro-businesses gives some links to information about running a business.
The second button helps you to evaluate your business idea - to determine whether it is a go or no-go.
If it's a go - we have a button to help you choose the best location for your business.
When you're ready to start, the Starting your Business button has tools to choose an entity and all the forms to create that business entity.
Don't start without a business plan. We have links to help you, as well as links for free one-on-one help.
Finally, we have other resources that will help you avoid common business problems.
LLCs were developed to give people the flexibility of partnerships with the liability protection of corporations. Corporations have strict rules regarding annual meetings and minutes, which can be a nuisance to small corporations. LLCs do not have any of the corporate "formalities". Yet they have the same liability protection that corporations do. Because of that, they have become a very popular business entity choice.
Before forming an LLC, check to see if there is a minimum annual tax for LLCs and compare it with any minimum taxes for corporations.
Like corporations, forming an LLC will not protect business owners from actions that they do themselves, from tax debt, or from personally guaranteed debt.
LLCs are popular entities if your business has more than one person doing the work or you want to protect smaller stakeholders from business debt.
Here are the forms to make your limited liability company legal. When you have completed this paperwork, you are ready to:
If you have any specialized leases or contracts, you will need to find a business attorney. You should also review your business risks and determine whether you need business insurance or whether you need to trademark, patent, or copyright elements of your business.
Forming a Business Entity
If you are thinking of starting a business, this is the place to be. We have resources to help you go from idea to opening your business.
The first button for micro-businesses gives some links to information about running a business.
The second button helps you to evaluate your business idea - to determine whether it is a go or no-go.
If it's a go - we have a button to help you choose the best location for your business.
When you're ready to start, the Starting your Business button has tools to choose an entity and all the forms to create that business entity.
Don't start without a business plan. We have links to help you, as well as links for free one-on-one help.
Finally, we have other resources that will help you avoid common business problems.
Corporations provide limited liability protection to the business owners. This means that if the business fails, the business owners do not have to use their personal assets for unpaid business debt. This limited liability protection does not apply to taxes.
Before forming a corporation, check to see if there is a minimum annual tax for corporations and compare it with any minimum taxes for LLCs.
In practice, incorporating does not protect owners from acts that they do themselves. That is because people can sue both the corporation and the person individually. Also, incorporating does not protect owners if they guarantee debt. Most lenders require the major shareholders to personally guarantee debt. By incorporating, the smaller shareholders are protected, but not the larger ones.
So overall, incorporation makes sense if other people (employees or partners) will be doing some of the work or you have smaller shareholders that you want to protect from debt.
There are S corporations and C corporations. This is a tax designation only. Normal corporations (C corps) have their earnings double taxed. First the corporation is taxed. Then profit is distributed to shareholders and shareholders pay tax on those dividends. S corporations were developed so that earnings are only taxed once.
However, S corporations cannot offer incentive stock options to employees.
Here are the forms to make your corporation legal. When you have completed this paperwork, you are ready to:
If you have any specialized leases or contracts, you will need to find a business attorney. You should also review your business risks and determine whether you need business insurance or whether you need to trademark, patent, or copyright elements of your business.
Forming a Business Entity
If you are thinking of starting a business, this is the place to be. We have resources to help you go from idea to opening your business.
The first button for micro-businesses gives some links to information about running a business.
The second button helps you to evaluate your business idea - to determine whether it is a go or no-go.
If it's a go - we have a button to help you choose the best location for your business.
When you're ready to start, the Starting your Business button has tools to choose an entity and all the forms to create that business entity.
Don't start without a business plan. We have links to help you, as well as links for free one-on-one help.
Finally, we have other resources that will help you avoid common business problems.
Partnerships are owned by more than one person. Each of the partners is personally liable for the business' debts. Much like a marriage, each partner is responsible for the others' actions, even if they did not know what their partner was doing. This works if both partners are equally responsible and have equal ideas about risk. If this is not the case, a partnership can be disastrous. For this reason, partnerships are less desirable business entities.
Partnerships are inexpensive to form and unlike corporations or LLCs, there is no minimum tax.
Here are the forms to make your partnership legal. When you have completed this paperwork, you are ready to:
If you have any specialized leases or contracts, you will need to find a business attorney. You should also review your business risks and determine whether you need business insurance or whether you need to trademark, patent, or copyright elements of your business.
Forming a Business Entity
If you are thinking of starting a business, this is the place to be. We have resources to help you go from idea to opening your business.
The first button for micro-businesses gives some links to information about running a business.
The second button helps you to evaluate your business idea - to determine whether it is a go or no-go.
If it's a go - we have a button to help you choose the best location for your business.
When you're ready to start, the Starting your Business button has tools to choose an entity and all the forms to create that business entity.
Don't start without a business plan. We have links to help you, as well as links for free one-on-one help.
Finally, we have other resources that will help you avoid common business problems.
Non-profit organizations or non-profit corporations are set up to provide services to either members or the general public. There are two primary categories: 501c(3) and all the others. 501c(3) non-profits serve the general public and donations to their organization are tax exempt. Contributions to the other non-profits are not tax exempt.
Non-profits have annual reporting requirements, must have a board of directors with outside board members, and have major restrictions on their revenue activities.
If your goal is to contribute a percentage of your profits to a non-profit or charitable cause, you are not a non-profit; you are a regular (but generous) business which gives charitable contributions.
Independent contractors are actually sole proprietors, but they often don't consider themselves "a real business", so we are talking about them separately.
Independent contractors usually work alone and often are paid under their own name, rather than a business name. Independent contractors are hired to accomplish a specific task - and it is up to them as to how, when, and where to do it.
Independent contractors are in business form themselves, so they are responsible for their own taxes - and unless they have incorporated or formed an LLC, independent contractors are sole proprietors.
Unfortunately, the distinction between an independent contractor and an employee can easily be blurred - by either the worker or the hiring company. The IRS fines the hiring firm if the worker is actually an employee. The IRS will fine the independent contractor if taxes (including social security self-employment tax) are not paid.
Warning: Independent contractor status has nothing to do verbal or written agreements between the worker and the hiring company. You can ONLY be considered an independent contractor if you are truly in business for yourself, take business risk, and meet virtually all of the 20 IRS factors below.
You are probably familiar with companies that will form a corporation or LLC out-of-state. While this is certainly legal, you should be aware of some of the downsides:
Small Business Development Centers are part of a national network of organizations dedicated to helping people start and expand their business. Funded by the SBA and some local cities, SBDCs provide free one-on-one counseling and low cost workshops.
Your local SBDC is:
Small Business Center at Snow College
(435) 893-2252
https://utahsbdc.org/richfield/
