Anyone can decide one day to start operating as a business. That entire person has to do is provide a product or service to another person that produces a profit to be "in business." While registering a business with the state or local government isn't necessarily required to complete business transactions, it is a smart choice for a new entrepreneur for a variety of reasons.
Establishing business Bank Accounts
You
need to provide proof that your business is properly registered with the state
to open a business bank account. A business bank account is an important asset
to a small business because you can separate your personal activities from your
business activities. It is also more professional to give your clients a
business name for payment instead of your own full name.
Getting Loans
When
you apply for small business loans, you're going to have to prove that you're
actually a business. Lenders and investors will ask to see your business
registration along with other application requirements before approving you for
a loan. If you apply for a credit card as a business, creditors may also ask to
see your registration paperwork.
Reputation with Customers
Customers
and clients, especially people you've never worked with before, need assurance
that you are a legitimate business. A potential client may suspect your
business of being a "fly-by-night" operation if your company isn't
properly registered. When a business is on file with the state, it could put your
clients at ease when making a decision about whether to spend money with your
company.
Supplier Arrangements
A
registered business also makes you eligible to receive supplier discounts that
you wouldn't normally receive as an unregistered operation. Suppliers commonly
reserve wholesale rates for business owners who can show official paperwork
from the state. Also, if you plan to try to get government contracts for your
company, a business registration is one of the first requirements.
Hiring
Employees
A
business registration allows you to hire full-time employees and pay them in
accordance to state laws. When you register your business with the state you'll
receive a state identification number that allows you to route state taxes on
the employee's behalf. So if you plan to hire on employees to your business,
it's best to take care of registering your business with the state before you
even start the search for worker.
No comments:
Post a Comment