Category Archives: Registering a Business

Use this section of StartUpaSmallBiz.com to learn how to get your small business registered.

How to Buy Direct from Manufacturers: For Small Retailers

So you wanna buy direct from manufacturers to start a small retail or distribution operation? This quick article will help guide you in the right direction.

In many cases, a manufacturer prefers to distribute its products to an established retailer or distribution company rather than dealing with an unknown individual. Even if an individual who claims to be a business contacts the manufacturing company he may need to provide proof of his business status. Additionally, the manufacturer may request a bulk purchase. So if you want to buy items directly from a manufacturer on an ongoing basis in the course of business as a small retailer or distributor you’ll need to get a reseller’s permit from your state.

1. Contact your State Franchise Tax Board division or finance department to request an application for a reseller’s or seller’s permit. This is a permit that establishes your company as an official business that plans to resell goods to end users. You’ll likely have to pay a fee for this permit and provide detailed information about your intended business activities. You may also need to register your business with the state before receiving the reseller’s permit.

2. Wait to receive your reseller’s permit in the mail.

3. Call the manufacturer that you want to do business when you have your reseller’s permit and explain your desire to establish a vending relationship. Provide details about your company, including the locations where you plan to sell the items (such as online or in your physical store). The manufacturer will consider establishing a business relationship with you based on your business plan, reputation and company credit report (if available).



4. Fill out a credit application as required by the manufacturer if you want to receive the goods on credit. Negotiate a discount rate and invoicing terms. Fax, mail or email a copy of your reseller’s permit to the manufacturing company to wait for final approval for your distributor account. You may have to sign a distribution agreement with the manufacturer that lists terms.

5. Request a catalog of current available products that you wish to sell to your customers. Submit a purchase order (see here for an example) to the manufacturer listing the items you wish to buy and your delivery address.





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Why Would You Need a Business License or Permit?

Getting a business license or permit is similar to getting a driver’s license — it grants you certain privileges to conduct commerce in your location of choice. Permits are issued on the city, state and federal level and commonly require a fee. Here are just a few common circumstances when you’ll most likely need to get a business license or permit to legally operate your business.

You Provide Medical Services to the Public

Any provider of medical services will need to be properly licensed by the state. That includes hospitals, doctor’s offices, dermatologists, providers of cosmetic body sculpting services and more. The practitioner must present proof of her medical training and pass tests to prove that she’s qualified to provide the service safely to the public.

You Sell Items That Are to Be Consumed by the Public

If you sell products that are going to be consumed, there’s a good chance that you’ll need a business license or permit to do so. When I say “consumed” I mean items that will be ingested or used in/on the body like food, medicine (pharmaceuticals) and supplements. The state has a responsibility to the public to ensure that the products they buy for consumption are safe.

You Are in Construction or Building of Structures

If you’re starting a business in the construction industry, the city, town or state where you plan to operate must ensure that you’re qualified to create and repair structures. Again, this is an issue of safety and fairness to consumers and other businesses. You will need to get the proper licensing to operate legitimately as a construction business owner.

You Are a Home Services Provider

If you plan to visit homes to provide services to customers, there’s a good chance that you’ll need a business license or permit. That includes home care attendants, child care providers, plumbers and electricians.

If you’re still unsure if you’ll need to get a business license or permit to operate in your location, the SBA offers a tool that helps you do the proper research.



Starting up a small business, even if it's just on the side, is no longer an option -- it's a necessity. Why? Because everyone needs an additional source of income in our new economy. Click here to sign up for educational and motivational posts to keep you on track.

Sole Proprietorship or LLC for a Small Business?

There are a number of different business structures that new small business owners can choose, but two of the most common are the sole proprietorship and LLC (limited liability company). Keep the following considerations in mind as you’re deciding between the two.

Ease of Organization

As soon as you trade a product or service for money and make a profit you’re technically a sole proprietor. The business is YOU. You usually don’t have to officially register the business unless you need to get licensing or pay sales tax. With an LLC you have to submit paperwork to the state where you want to organize. The process requires a few extra steps, but can be completed rather quickly by an LLC filing service (this service usually doubles as the registered agent).

Cost of Doing Business

It’s important to know in advance that when you’re running an LLC you’re going to be responsible for paying annual fees to keep your status. That includes a registered agent fee (this is the company manages your LLC and receives any official mailings) and a state LLC tax. Sole proprietors only have to pay their yearly income taxes associated with their business activities. You have to ask yourself if the annual cost is worth the benefits of maintaining an LLC status. Many business owners gladly pay the fee for the business and personal protection it offers.

Personal Protection

The main benefit of filing as an LLC is that your personal matters are considered separate from the business. It is similar to a corporation in that it is its own entity. In most cases, any debts or judgments against the business will not be issued against your personal assets. When you operate as a sole proprietorship you are exposed to risk that could affect your personal property.

Credibility

If you’re planning to start a business where you’ll have to make deals, hire people and work with suppliers, credibility is an issue. Some people feel more comfortable working with an officially registered business that has an “in good standing” LLC status. They may want to look up your company to learn more about your business reputation before working with you. If you do business as a sole proprietor they may have a hard time researching this information. If you are a sole proprietor, at the very least invest in a fictitious name filing so that you can put that on your letterhead and have a searchable record with the state.

Keep these issues in mind and consult with a business adviser to help you decide if you should operate your company as a sole proprietorship or LLC.



Starting up a small business, even if it's just on the side, is no longer an option -- it's a necessity. Why? Because everyone needs an additional source of income in our new economy. Click here to sign up for educational and motivational posts to keep you on track.

Employer Identification Number EIN

When you start a small business, one point of business to take care of is getting an employer identification number (EIN). It’s a quick and straightforward process that can be completed in a matter of minutes.

An EIN is commonly connected to your personal social security number when you run a sole proprietorship or single member LLC. However, it gives you a degree of separation from your personal information when conducting business.

For instance, when suppliers or business contacts need your tax information in order to pay you, you might not feel comfortable giving an SSN to a stranger. When you have an EIN you can give that instead.

Stay tuned to this section of StartUpaSmallBiz.com to learn more about the benefits of having an employer identification number EIN and how to get one for your new small business.



Starting up a small business, even if it's just on the side, is no longer an option -- it's a necessity. Why? Because everyone needs an additional source of income in our new economy. Click here to sign up for educational and motivational posts to keep you on track.

Getting a Business License

When you register a new business, sometimes you may have to get a business license.  Getting a license to operate a company is different from the general registration process.

Certain types of businesses require a license — some licenses are on the local level, some on the state level and others that you have to get from the federal government. Businesses that commonly need a special permit to operate include:

– food vendors

– bars and restaurants

– construction companies

– real estate

– nail salons and other cosmetic services

– health-related services

The SBA offers a business license search tool that you can use to figure out if the startup you have in mind requires special permission from the authorities. Stay tuned to this section for more information on the licensing process.



Starting up a small business, even if it's just on the side, is no longer an option -- it's a necessity. Why? Because everyone needs an additional source of income in our new economy. Click here to sign up for educational and motivational posts to keep you on track.

Limited Liability Company LLC

Many small business owners opt to register their new companies as a Limited Liability Company (LLC). This is because an LLC offers a number of benefits. It’s like having a sole proprietorship with the protection of a corporation.

LLC benefits include:

– easy to organize

– protects individual owners from debts and personal liability

– owners can report their business earnings on personal taxes

– a professional business name (My New Business, LLC)

Browse this section of StartUpaSmallBiz.com to learn about starting a Limited Liability Company LLC.



Starting up a small business, even if it's just on the side, is no longer an option -- it's a necessity. Why? Because everyone needs an additional source of income in our new economy. Click here to sign up for educational and motivational posts to keep you on track.

Sole Proprietorship or Partnership

Many small businesses start off as either a sole proprietorship or partnership. They are the simplest business formations and often require minimal registration with your state.

A sole proprietorship is formed as soon as you start transacting business — when you sell something at a profit, whether it’s a service or an old pair of shoes, technically you’re running a sole proprietorship.

A partnership is formed when two or more people write an agreement to be in business. The contract is usually submitted to the state commerce department so that it will be an officially recognized business.

Learn more about whether a sole proprietorship or partnership is the right business formation for you in this section.



Starting up a small business, even if it's just on the side, is no longer an option -- it's a necessity. Why? Because everyone needs an additional source of income in our new economy. Click here to sign up for educational and motivational posts to keep you on track.