Monday, October 29, 2012

Do I need to Formalize my Business?

No, but sometimes....

Small Businesses can operate under their primary owners Social Security number.

What if you don't want to take a check in your name but rather your businesses name.  Well then just register your business as a DBA (Doing Business As) with your local town for an incidental fee and open a checking account in that name.  You are now operating as a DBA under your personal security number.

Doesn't work for partnerships though they must register as an LLC - Limited Liability Company.  Those partners then receive a partnership K-1 tax statement to be filed on their personal taxes.  Another reason to limit your liability is so that you don't go bankrupt personally in case of lawsuit which is certainly advisable if your in the construction industry or anything prone to lawsuits.


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