Hello ladies and gentlemen, here I am again with another one, today I wanted to go over business registration, licensing and permit requirements. To start off, thank you for joining us. Any entrepreneur out there knows the hassles of starting a business . Setting up business looks easier than it actually is. It's easier said than done, because of some requirements based on the niche of business one wants to get into. Not forgetting the financial contributions that you may have to make and what not, so today as a business owner myself and as an entrepreneur who has gone through this, I wanted to go over everything that was required of me or that I did to get to this point. I felt it necessary, because most of the time the information out there can get pretty overwhelming. Hence I hope summarizing here might help a fellow entrepreneur out there.
Please do not take every point made here literally as they might not apply to your state, research your state requirements for your specific niche of business as every state is different, so is every niche. Now let’s jump in, to start off, think of your business name (the name you want for your business i.e. DBA) and think about reserving it on your State’s administration website, sometimes the name might be unavailable, hence it might be necessary to save yourself the hassle of giving up a name by making sure it is available and not registered by another business before using or choosing that name. May you not be ready to register your business, you may have the leisure to reserve it for a couple of days for a small fee.I didn't search the database to make sure my business name was available but I was lucky enough that nobody had actually taken that name so when I went in there I was able to pick that name right off the bat, and registered it for my business. Registration fee is mostly 100 bucks and needs to be renewed annually. Your registration documents get emailed to you once everything is successful on the platform and all payments paid. Right after you register your business , in Virginia you have 75 days post registration to apply for licensing and any permits that apply to your business, failure to do so may incur some penalties here and there. Before moving on to licensing and permits, make sure to pick your business structure e.g LLC, sole proprietorship, corporation, LLP etc and classify if your business will be managers-managed or members-managed as this will help you figure out which state and federal business laws will apply to you.
There are tax rates that apply to business licensing in Virginia, you do not necessarily pay for licensing fees but rather BPOL tax rates that apply to your gross receipts. BPOL tax rates for Virginia licensing are within the range of $0.03- $0.31 per $100 of gross receipts. This applies every year just like the annual registration fees for your business’ registration renewal, except that supporting documents will need to be provided annually to the department of tax administration to help determine your BPOL tax rate for payment. For your license, make sure to categorize your business by NAIC standard first for your license application, you have the leisure to either email the application or mail it to your county’s department of Taxation, they will confirm receipt and let you know the earliest you could get your documents. Now moving on to permits, there are various permits that may apply to your business based on your niche. Research about your business’ niche to make certain what certification requirements and permits might apply to you other than just a zoning permit. All businesses regardless need a zoning permit for either an online business run from home or from a physical business site. For example, an e-commerce website will need both a sales permit and seller’s permit just to run the e-commerce site, other permits may apply depending on the type of product being sold on the website.
Moving on to EIN numbers for tax purposes, companies with employees on payroll always need to apply for Federal EIN as well as that of the state’s , however may you be a sole proprietor or a single-member LLC with no employees on file, you can opt in to use your SS# instead of applying for an EIN until you have employees on payroll. However some entrepreneurs may choose to apply for their business EIN regardless to separate personal income tax from business tax. After going through all that is summarized above, obtain your articles of organization acquired from your registration, EIN numbers and two forms of identification to open your business bank account. Lastly, having business insurance could be great depending on the type of business you are into. Below are the overall steps put in bullet points
Think of business niche and categorize by NAIC standards
Choose a business structure (managers-managed, members-managed) (LLC, LLP etc)
Choose your business name and check for availability of name
Register your business
Get federal and state tax ID numbers
Apply for licenses and permits
Open a business bank account
Get business insurance
Overall, my experience was great, the various institutions in getting registered, licensed and permits were all responsive with help and the process. All documents were received in a timely manner. Thank you and I hope this helped summarize everything for any entrepreneur out there who wants to start out, drop your questions and we did be glad to help, until next time, stay safe and stay tuned.