While it’s much easier to start a business online today, many don’t know the legal requirements to do so. An online business, in many ways, is not different to a physical store because you’ll be required to obtain the same government permits and licenses to operate. So without wasting time, let’s look at the legal requirements for starting a business online:
You’ll have to register your business name before you start selling products online
Whether you want to run an online or offline business, the first step is registering your business name. The law requires that the name you choose should be unique. If it’s not, it won’t be registered. If you’re in the United States, you’ll need to visit the secretary of state website to get more insights into registering a business name.
You need to have an employer identification number to launch your business online
Essentially, this is a federal identification number given out by the Internal Revenue Service that identifies any business out there. Every business needs to pay taxes in the U.S.A., which is why they have to obtain a tax identification number.
You’ll need to register your business online with state labor agencies
If you plan to have employees in your online business, you’ll have to register with the unemployment and state workers’ department. This applies even if you have only one employee.
You’ll need sales permit to run your business online
A sales tax permit is applicable if your state has sale tax system and your online business sells products and services. But if your business doesn’t have a brick-and-motor store, you won’t need to obtain one.
Check out any occupational licenses or permits required by your industry
Some states required that you obtain state-issued licenses if you operate an online business. These licenses only require that you show that you have specific training and skills needed to run the business. Examples of fields that require these kinds of licenses include auctioneering, real estate, law, Medicare and more. While few of these licenses will apply to your business online, it’s recommended that you check with the secretary of state just to be sure.
Check the zoning codes of your business online
You’ll need a home occupant permit if you intend to run your business from home. Determine if you need one by reviewing relevant city and county laws.
Before you start a business in any country or state, make sure you have all the required licenses and that they are up to date. This is essential to avoid problems with the authorities. It will give you a piece of mind knowing that nobody will sue for violation of business laws, such as infringement on business name and trademark.