How Do You Go into Business?
Once you have decided to go into business, there are multitudes of details that must be handled. What you do at the "birth" of your business will have a definite effect on its future, and may mean the difference between success and failure. It is essential that you work closely with your professionals. If you are not prepared to pay their fees, you should not go into business.
You are the only one involved in the business. You will be completely liable for any losses. The results of your business activity are reported on your personal tax returns on Schedule C. Most small business ventures start as a proprietorship. This form incurs the lowest legal and accounting costs. Additionally, the record-keeping requirements are relatively simple.
This is the most complicated form of business. The corporation may have one or more shareholders. The corporate records must be kept in a very detailed manner. Separate corporation forms must be prepared and corporate taxes paid. All funds must be completely separated from your personal funds and any loans from stockholder to corporation meeting and reflected in the corporate minutes.
It is difficult to operate a corporation without close help from our Accountant and your Attorney. A corporation may limit your liability. This is the most complicated form of business. The corporation may have one or more shareholders. Any loans from stockholder to corporation and vice versa must be closely controlled.
An S-Corporation has elected to be taxed in a similar manner to a partnership. If you have any interest in this type of corporation you should review it in detail with your Accountant and Attorney. This form of organization can be very beneficial in specific situations. The initial election, with the Internal Revenue Service, must be made within 75 days of our incorporation of Form 2553. The State of New Jersey recognizes this type of entity and application CBT-2553 is used.
A partnership is a business entity involving two or more people. Depending on the type of partnership, your liability may be limited or unlimited. Any income or loss will be passed through to the partners. The partnership, unlike the corporation, is not subject to tax. The accounting requirements are as detailed as a corporation's. It is advisable to have your Attorney draw an actual partnership agreement.
Various registrations must be made with the Federal and State governments. They included the following:
If you decide to incorporate, you must file a Form C-100 with the Treasurer, written requests should be directed to the:
NJ Division of Revenue
P.O. Box 308
Trenton, NJ 08625
For general information, you may telephone 609-292-9292. You should contact your Attorney to be sure your incorporation is handled properly.
To register a trademark, contact the County Clerk of where your business will be located (Gloucester County Clerk phone: 856-384-3237). If you are using your own name, registration is desired, but not required. If trading any name other than your own, registration is required by law.
Anyone establishing a business in New Jersey must register it for tax purposes. You may write to Taxpayer Services at:
NJ Division of Taxation
50 Barrack Street
1st Floor Lobby
Trenton, NJ 08695
Each employer must apply for an "Employer Identification" (Form SS-4). For Federal Business Tax Information contact the Internal Revenue Service (IRS) office in your area or call 800-829-4933.