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Disclaimer: This article is geared for US based bloggers, and is not intended to replace or serve as official legal advice.
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When starting a blogging business, you may not be creating a separate business entity initially, but once you start earning income from your blog, you may want to consider establishing a legal business. This can be one of the more confusing avenues in a new business, and one that is very important to set up correctly the first time.
This article is not meant to be all-inclusive in steering you through options of setting up a business and the paperwork included with the process. However, we do want to give you an idea of how to head in the right direction. If you have any questions on this process, I’ve included some resources at the end of the article, and I always recommend consulting with a tax professional.
The first step in starting into the paperwork of setting up your new business is to decide the structure of your company. According to the IRS, you have the options of the following:
- Sole Proprietor
- Partnership
- Corporation
- S Corporation
- LLC
The explanations of each of these can be found at thttp://www.irs.gov/businesses/small/article/0,,id=98359,00.html. Each business structure has paperwork unique to itself. The IRS website explains these. It should be noted, however, that the IRS does not recognize an LLC as a business classification. This is only recognized by state tax code. If your business is filed with the state as an LLC, you must decide to file as a sole proprietor, partnership or corporation with the IRS.
Next comes the most fun selecting the legal name of your business. This can be the name of your blog, but it doesn’t have to be. How do you make sure you’re not repeating a great name already in existence? You may need to search your state’s records to find if your selected name is available in your state. Your secretary of state or comptroller can be contacted online or by phone to find this information. Just do a Google search for your state’s name and secretary of state.
If you select to incorporate your business as a Corporation or S-Corp, Articles of organization will need to be filed in your respective state. This is a way of telling your state that you are now conducting business and are a legal entity. If your company will be conducting business under another name, you can also file this information with your state.
Now that your state recognizes you as an entity, you also may need to apply for an FEIN (federal employer’s identification number). This number allows the IRS to identify your company’s tax account. However, this may not be needed if you are a sole proprietor or an LLC with only one member. To find out if you need an FEIN or to apply for one, see this website: http://www.irs.gov/businesses/small/article/0,,id=98350,00.html
To withhold taxes, you may also need to file with your state’s department of revenue, department of labor and the federal unemployment tax administration. These types of withholding are not required of every business, so make sure you Information about these can be found through your state and the IRS websites. You may need to obtain a sales tax permit if your company will be selling products and need to collect sales tax from your customers. You can obtain this permit from your state government. Check with your local, city and county governments as well to see if you are fulfilling the sales tax requirements with each.
Please remember that throughout the process of setting up your new business, there are many different paths possible. We?ve tried to give you a good idea of the paperwork and license set up involved. Your particular situation may vary from what is described above, but this should give you a great place to start!
Good resources
Starting a business and keeping records http://www.irs.gov/publications/p583/index.html
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