Before You Apply For Your Federal EIN or State BTR
This article explores a serieis of questions tht a startup should consder beforeapplying for their their Federal EIN or State BTR
SCORE is a firm believer that businesses should utilize professional partners. Though anyone can apply for tax ID numbers or business formation application, the experience of a business attorney, a business accountant, a business insurance agent and SCORE can be beneficial (Click here to set up a face to face counseling session with a SCORE representative. It's free and confidential)
Before you apply for a Federal EIN or State BTR you need to consider a number of issues including the following:
Do you need to apply?
Have you seriously considered the form of business that is best for you?
Have you arrived at an effective name for your business?
If you have answered YES to these three question and wish to apply:
For the Federal EIN go to: http://www.irs.gov/businesses/small/article/0,,id=102765,00.html
For the State BTR go to: http://ww2.wisconsin.gov/state/wizard/app/LoadIntro
If you have answered NO, then consider the following:
Who Must File?
Basically, if you do or expect to pay wages to one or more employees, then you must file. This is true if you are or plan to be a sole proprietor, limited Liability company, limited liability partnership, corporation, S corp, partnership, estate, trust or other entity. The form will establish your business tax account.
If however, you are planning to work alone, unincorporated as a home business, an independent contractor, a professional, a service provider or similar business without employees, then you do not need and EIN or BTR number. Your Social Security number will serve as your tax ID and you will be a sole propritor or independent contractor.
If however, you will be selling products or services, subject to sales taxes, you will need to get a Seller's Permit that is part of the State BTR form.
What form have you selected for your business?
This question should only be answered after careful study of the choices and what works best for your business and personal circumstances. The forms of business are Sole Proprietor, Limited Liability Company(LLC), Limited Liability Partnership(LLP), Corporation(Corp), S Corp, Partnership. Filing requiremnts are very easy and low costs especially for a Sole Proprietor, LLC and LLP. It is however, far more important to know why the selected form is correct for your business. Click here for more information on the forms of business. Read also [pdf] Should You Form An LLC (view as html)?
Selecting A Name For Your Business
You Business name is first step in communicating the things your business can provide. Your name will create your identity. When you have an idea for your business name, you will need to make sure no other business is using it. You may even want to make a list of several possibilities in case one is taken. There is no such thing as the perfect name for a new business. A carefully selected business name goes a long way toward making your new company more memorable. Here are some tips:
Keep it short
Make sure It can be easily pronounced
Clever or "cute" names are not always the best
Use either your own name or one that says what your business does (be general to allow for growth)
Look in the Yellow Pages to avoid a name that is confusingly similar to an existing business
Enter the name on a web site search engine
Make sure that is looks as good on a business card as it does on a piece of letterhead or a sign.
Consider how your name would look in a web site URL (you may want to test to see if it is taken)
Some businesses legally register their business names and trademark them. Trademarking is a legal technique made available by states and the federal government to give you the right to a particular name, assuming no one else owns the rights. To receive national protection you must file for a trademark through the U.S. Trademark Office. This can be time consuming and fees are involved but it can provide protection should your business grow in prominance. If you are forced to change your name, it can very expensive and can lead to loss of sales. Read also [pdf] Name Your Business The Right Way (view as html).
Some other useful links on this topic: