Whether you’re starting a new business or running an established organization, the definition of “a business” in the US is surprisingly simple: one or more people engaged in some activity to earn a profit. That’s it. If you engage in any activity with the goal to earn a profit, you have a business.
Of course, that simple definition raises a number of questions:
Do you have to register a business if you’re self-employed? What does registering a business mean? Do you have to pick a business structure—like an LLC or a corporation? What about state and federal laws? And, how should you manage taxes and liabilities?
If you’re not sure how to answer these questions, you’re not alone. But it’s important to get these things right from the start. Your business structure affects the taxes you pay and the paperwork you need to file. How you register your business impacts your personal liability and tax credits. Depending on where you do business, it may be difficult to change your structure down the road.
Suddenly, what was simple becomes complex.
That’s why 60% of seasoned business owners recommend getting help with things like setting up financial systems, choosing a business structure and registering your business, according to a recent QuickBooks survey . However, the same survey found that 50% of people who plan to start their own business in the next year will be taking a DIY approach. Less than half (44%) said they would employ an expert to help them register their business correctly.