No matter what kind of business you will be developing, you’ll need to address legal structure and EIN.
You will want to make sure your business is legal. The first step is to decide what kind of business entity (legal structure) is best for you. For a description of the pros and cons of legal structures, go to forms of business organization.
Employee Identification Number (EIN or FEIN)
Employers with employees, business partnerships, and corporations must obtain an Employer Identification Number (EIN) from the U.S. Internal Revenue Service. Even if you are a sole proprietor and don’t have employees, it is still good practice to obtain an EIN. An EIN may be required for government forms, banks often require it for loans and it can be used instead of your personal Social Security Number to protect against identity theft.
The general process
Step 1: Create a business plan
For any business, the first step is to turn your basic idea into a written, viable plan of action. A well-thought out business plan is necessary for obtaining loans and is a model for your success. Refer to the business planning section.
Step 2: Decide on your business structure and register your business name
Careful consideration must be given to the management, structural and tax implications of your decision. While not a replacement for sound legal or tax advice, see forms of business organization.
- To register a business name for a sole proprietorship or general partnership: Contact your local county recorder where you intend to do business.
- To file a Corporation, LLC, LLP, or Limited Partnership, contact the Secretary of State’s office for application forms and filing requirements.
Step 3: Get license requirements
The Commonwealth may require additional license or business registration paperwork to be completed. It is also important to check with New Bedford City Hall to determine licensing requirements. We can be helpful with understanding those requirements.
Step 4: Obtain the necessary tax information
Taxation for small businesses may be simple or complex, depending on the size and business structure. The tax liability for each business will be different and you should consult your attorney and accountant regarding comprehensive tax planning.
Step 5: Identify sources of financing
Step 6: Learn about employer reporting requirements and responsibilities
As an employer, you will be responsible for additional employment insurance and worker’s compensation insurance. This includes applying for federal and state withholding numbers.
- For Federal Identification Numbers (EINs) contact the Internal Revenue Service or call (800) 829-4933
- For State Sales Tax and State Withholding Tax contact the Massachusetts Department of Revenue.