Sole proprietorship: To be legitimate, here’s a start for what forms you need. If you’re going legit (recommended) go all the way legitmate.
A sole proprietorship is owned by one person. If you have more than one person, you become a partnership. This list of forms is not exhaustive, but it’s a good start. Certain businesses require additional forms (eg. licensed professions, hazardous industries).
1) Assumed name (DBA) at the Register of Deeds. Costs $26 (they don’t take personal checks). Form at their office or on www.forsythdeeds.com
2) Tax id Number with IRS (if you don’t want to be giving your social to every supplier and customer who gives you a 1099)
3) Privilege License for municipality http://www.cityofws.org/Home/Departments/FinancialManagementServices/RevenueCollections
4) State Privilege License http://www.dor.state.nc.us/downloads/privilege.html
5) Determine if you need to have a NC sales tax id & file sales tax returns http://www.dor.state.nc.us/downloads/sales.html
6) Run a separate bank account in the name of your DBA and using your Tax EIN for business. No commingling.
7) Quarterly Taxes:
I recommend keeping a new, separate bank account to hold your tax withholdings for quarterly estimated taxes to State & Feds. So if you make $30,000 in a quarter, put your percentage of fed and state tax rate into that account. Use the account to pay quarterly tax estimates on time. That way you don’t overspend and get in a bind on quarterly tax payment deadlines.
If you are concerned about protecting personal liability, consider forming a corporate entity. Sanders Law Firm, PLLC can incorporate/organize your business starting at $350.00 plus Secretary of State fees.
If you have employees or intend, you will have a lot of other forms to fill out. Sanders Law Firm PLLC uses a payroll company to make life easier.
If you need tax advice to determine the most advantageous method to minimize your tax burden, contact a CPA.
Call Sanders Law Firm to help you draft legal contracts, estimates, collection cases, and litigate matters for you and your business.
W. Kirk Sanders, Attorney
Sanders Law Firm, PLLC
326 N. Spring Street
Winston-Salem, NC 27101