Activity

USS Biz Trek Activity #30: Checklist of Legal Steps

The checklist on this page will help you go through the steps of making sure your business is legal. Phone numbers for most of the offices and organizations in this list can be found in your phone book in the section for government and community services. Today, many city administrations also have Websites where you can find much of the information you need. On the Internet, type in your city and state, and see what you get!

Loggin’ On

Print a copy of this checklist and use it to do the research on legal requirements for your business. Start a special page in your USS Biz Trek log titled "Legal Requirements" and keep notes of all your research steps. Keep your checklist in the pocket of your log.

______ 1. Decide who is going to be the legal owner of the business and whether to operate as a sole proprietorship, a partnership, a corporation, or a nonprofit. See a lawyer if you need help.

______ 2. If you use a company name other than your birth name, go to the office of the county clerk at the county courthouse and register your business name.

______ 3. Call the local Chamber of Commerce and city hall to inquire about zoning ordinances, licenses, and permits. Get any licenses or permits required by your city, county, or state. Make sure the business complies with all zoning, health, and safety regulations.

______ 4. Visit your nearest state tax assessor’s office. Find out if your business is required to collect and pay sales tax. Apply for a sales tax permit

______ 5. Visit an expert on income tax preparation and get advice on how to keep your financial records. If you make over $400 in one year, you will be required to file an income tax report at the end of the year.

______6. Visit your lawyer or insurance agent to discuss any possible legal liability for the safety of your customers.

______ 7. Go to the bank and open a savings and/or checking account. You are not required by law to have a bank account for your business. However, it is easier to prove your business records for income tax purposes if you operate your business from a separate account. It is also helpful to have an account at the bank to process the checks your customers give you.

______ 8. If you have employees, you will need a federal tax I.D. number. Most youth- owned businesses do not need these numbers, but it is your responsibility to find out for sure. Look for "Laws and Regulations" under U.S. Business Advisor or go directly to the Internal Revenue Service.

Finished?

Rocket back to Lesson 9

Rocket forward to Activity 31