Remember the days when you were a kid and you could start your own business by making some lemonade and sitting at the end of the driveway with a “Lemonade 50 Cents!” sign? Well those days are long gone and one has to play by Uncle Sam’s rules if you want to be a true and legit business. Last week, I set aside some time and completed all the necessary forms to be established as a sole proprietorship in the Commonwealth of Virginia. With my new contracts demanding my services, I have to make sure I’m following the correct procedures to make sure the IRS doesn’t throw me in jail for not revealing my true income.
Now I can only speak for the Commonwealth of Virginia but the business set-up process is fairly straightforward and easy to complete. In Virginia, a system was developed in 2008 to allow all business starting individuals to be able to report to one comprehensive online location to start-up their business. This system is called, “Business One Stop” developed and maintained by the Virginia Department of Business Assistance.
For a one time fee of $20.00, any individual or entity will be granted access to all necessary resources to complete the legal establishment of their business. However, if one of the stakeholders involved in the development of your business is in the military, then you have the possibility of being waived the $20 registration fee contingent they show proof of military service via DD-214 or the active-duty member’s most recent Permanent Change of Station (PCS) orders sent through email or fax to Virginia Business Information Center.
With Business One Stop you are able to complete the following to establish your business:
- Federal Employee Identification Number (EIN): By securing your EIN, the IRS will legally recognize the business you perform and also authorize you to hire any additional employees should the need arise.
- Local Business License: By applying for your Local Business License you are able to specify what areas within the state you are doing business in that you will be most present at.
- SWaM: If you are a small, woman, or minority owned business that plans to do work with the government and gain contracts, this is where you would obtain that certification.
- Assumed or Fictitious Name Certificate: If doing business as a name other than your legal name, this allows you to apply to operate business in the name you wish (i.e. Lion’s ROAR Marketing)
Once you have gone through the steps laid out within the Business One Stop system, you are then certified in the Commonwealth of Virginia to conduct business. I found it amazing that this whole process took me about 20 minutes and I didn’t have to leave my house to get it all done.
A few things to keep in mind though are if you are submitting or applying for certain things within your business, make sure you follow through and turn those forms in. This is especially applicable to the “Assumed or Fictitious Name Certificate” or SWaM certification. You are able to fill out the form online but must turn in your form either in person or via fax to those respective entities in order to complete the process.
Now I haven’t done research on how other states run their business establishing process but if anyone has undergone something similar to what Virginia has, please leave a comment.
