If you’re thinking about starting your own business,… congrats! There are several steps to get you started on this new journey. Below are some critical steps to starting a small business in Massachusetts.
1 – Decide on Business Structure
Before you can start a business, you must decide what type of business that will be. Among the options are…
- Sole Proprietorship
- C Corp
- S Corp
- B Corp
Click here to learn more about these options. Each has pros and cons when it comes to taxes, personal liabilities, etc. Creating the right business structure is critical to your future success. If you are unsure which is best for your particular business, consult with a business attorney.
2 – Request a Tax ID Number
Once you have decided on the business structure, it’s time to request a tax ID number. This allows you to operate and track your business dealings separately from your personal social security number. This can be done online and is almost instantaneous. Visit the IRS website to apply for an Employer Identification Number (EIN).
3 – Obtain Licenses/Permits
Depending on the type of business you are starting, you may need to apply for licenses and permits. Check with both the state and local city/town as their requirements may vary. Remember that most also require renewal after a certain amount of time (i.e. yearly), so you will need to complete this task again in the future.
4 – Establish a Location
One of the most important steps to starting a small business in Massachusetts is selecting a location. There is much to consider from visibility to parking and lease terms. Consider working with real estate experts to help you make informed decisions on location and lease negotiations. If you are working out of your home, you may want to rent a PO Box so that your home address can remain private.
5 – Register Your Business
The next big step is to register your business both with the state of Massachusetts and with the local city or town. Registering protects your business name and is required by consumer protection laws. For the state, file online at the Secretary of State’s website. For the city/town, visit the city/town hall to obtain the necessary forms. As with licenses and permits, renewals are required. You are also required to notify them if you are changing your business name or no longer operating as a business. There are usually stiff penalties for not complying with these rules.
6 – Open Bank Account(s)
Once you have a tax ID number and are registered to legally operate as a business, sign up for a bank account. Since your business is new, banks may also ask for your personal information, such as your social security number. Even if you are working as a sole proprietor, it is important to keep your business finances separate from your personal ones. This will help come tax time and if you decide to sell your business in the future.
7 – Choose an Accounting System
Accounting and bookkeeping are very important for any small business. Establishing good practices early on will save time, energy, and money,… plus it will help avoid legal trouble. If you are not familiar with proper accounting practices, consider hiring a professional.
8 – Start Working!
Now comes the biggest step of all,… it’s time to start working! This includes the physical setup of your business location, establishing relationships with vendors, marketing, etc.
More Important Steps to Starting a Small Business in Massachusetts
Throughout the entire business setup process and the daily operation of your business, it is critical to have legal guidance. Ignorance is no excuse for the law, and you simply may not know what you don’t know. Working with a local and experienced business attorney ensures that you are doing things right and within the boundaries of the law. For assistance with your small business legal needs, contact the team at Martino Law Group.