Chapter 1: Getting Legal with the State and the Feds
In This Chapter
- Filing a fictitious name statement (for real)
- Getting a business license and other regulatory details
- Choosing a legal business format
If you've played around on eBay, had some fun, and made a few dollars, good for you — enjoy yourself! When you start making serious money, however, the government no longer considers your business to be a hobby. It's time to consider some issues such as business structure, tax planning, and licenses; this chapter offers as painless an entrée as possible.
When you're concentrating on fulfilling multiple orders and keeping your customers happy, the last thing you need is a G-man breathing down your neck. Worst-case scenario: How about getting audited in December when you haven't been keeping up-to-date records all year? I know this sounds like stripping the fun out of doing business on eBay, but taking a bit of time and effort now can save you a ton of trouble later on (and will save you money in penalties).
Giving Your Business an Official Name
In most states in the United States, you can find funny liner ads in the classified section of the local newspaper. They're called fictitious name statements. No, the statements aren't fictitious, but in effect, the names are — and as such, they need to be registered with your state before you can open a bank account in a business's name. This is also referred to as your DBA (or Doing Business As) name. They let the state know who owns ...