Thursday, July 1, 2010

"Becoming Legal--Telling It Like It Is"

When starting a business there are always forms that must be filled out and licenses to get, but I've discovered there is a real art to it as well as getting everything in the right order on the time line. In the state of Missouri there are so far five different forms/licenses for us to fill out and get. All the following information refers to doing business in the state of Missouri. I don't know what other states require so if you are in another state be sure to check out your state's requirements. Getting all your licenses in order can be frustrating, time consuming and somewhat expensive (money for licenses and forms) but definitely worth all of it because your business has to be legal.

The fictitious name form (if you don't use your real name as your business name) can be filled out at anytime. It costs $7 and I would suggest getting it first because you need to know you've actually got the name of your business in writing, legally, in the state of Missouri. You will be using it a lot on the rest of the forms. Since our business, Five and Nineteen Blackbirds, is a partnership, Megan had to sign this form as well as me. They let me fill out the form I printed off their website and fax it to Megan so she could sign it and fax it back to me. Since I called the office first to see what I had to do, I didn't have to make a second trip.

The second thing you need to do is call the Internal Revenue Service at 1-800-829-4933 and get an FEIN number. What is that you may ask? I sure did! I had never heard of it. It was explained to me that that is an identification number for our business and that all correspondence (tax forms, etc.) will need to have that number on it. Okay, that sounds reasonable enough. The person you talk to will also explain several other things to you: tax responsibilities, what forms to file for your particular business, when to file them, and pretty much all you need to know at once. The IRS will also mail you hard copies of everything and it will reach you in about two weeks. But the beauty of calling that phone number is that you get your FEIN number immediately and can use it immediately. Like for setting up a bank account and for getting your next form going which would be your Missouri Tax Registration Application. The down side was that I waited on the phone for over 30 minutes before I could talk to this very nice lady who helped me get my number. So patience is definitely in order here. The calls are answered in the order in which they are received--so don't hang up!

The Missouri Department of Revenue office is on the 3rd floor of the building in which I got my fictitious name form finalized in a town only 10 miles from me. When I discovered that fact, I went down 3 floors (from the fictitious name office) and got a little booklet of forms to fill out. But they won't process it until you have your FEIN number which at the time I knew nothing about. So I took the form, thanked her and left. That was late last Friday. So I took the weekend to fill out all but a half dozen questions. Yesterday I trekked back in and got the questions answered (except for one that I need to talk to city hall about) so I could fill in the correct responses. So after my forms are all filled in and a money order for $25 (a cash bond requirement) is filled out and attached, I will, with much confidence drop it in the mail. It will take 10 days to two weeks before they get back to me with my Tax Number from the Missouri Department of Revenue. As far as I can tell, no telephone call gets you that tax number because of the cash bond required. Only a cashier's check or money order is accepted.

So, after I get my Mo Tax Number, I can then apply for my county license which happens to cost $25 also and my city license which, since we are a home based business is apparently free. Gotta love that.

Wow. I think once I get these last two licenses I'm done with the license/forms/legal stuff from the state, county and city in which I live. What a relief! BUT I will double check everything just in case. Everyone you talk with will tell you it is your responsibility to get your business legal with the required forms. Just an observation: Some of the people at these places have been very helpful; some not so much. Since it is definitely our responsibility to be legal, best be thorough about it and make sure you've gotten all the licenses/forms/ legal stuff that you need. It can be quite confusing.

The only advice I have for you is to be patient, ask a lot of questions and get and keep phone numbers for all these places handy because I'm sure you will probably need to call one or maybe all of them at least once in the coming months. Especially the tax people when you are ready to fill out your income taxes. Oh, yes--be sure to take good notes, and KEEP them where you can easily find them. The people I've dealt with have all been pretty friendly and extremely helpful with the exception of just a couple. The waits have been long on some and short on others. Patience is the key to the long waits. Be thankful for any short waits that come your way.

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