Every business begins with an idea. Once that business begins to spend and, more important, earn money, it becomes an entity that is of interest to local, state, and federal authorities. Regulators will want to regulate, inspectors will want to inspect, and tax agencies will absolutely insist on collecting taxes. Many of the jobs we write about in this book can begin on the most casual basis, as a sole proprietorship or a general partnership. In these sorts of businesses, the owners put their own money into the operation and pay taxes on their personal income. We can also hope that our little idea for a business will one day grow into a larger enterprise with multiple employees, assets of its own, and a long and profitable life. In here, we will know the most common structures for businesses. In some states and localities, you must register the business name with the county where you will conduct business. In addition, banking laws generally require a business certificate to enable you to deposit checks made out to someone into an account, although checks to that someone would probably be accepted.
There are advantages to each of the various forms of business, including sole proprietorships, partnerships, and corporations, that might argue for one or another, depending on the nature of your enterprise. State and federal laws differ with regard to certain requirements for various business structures: for example, whether a business needs to have workers’ compensation insurance, the deductibility of certain expenses, and the filing of tax and information returns. Be sure to discuss available forms of business with an accountant and attorney.