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Know Your State Tax Laws

by gbaf mag
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It is very important to note here that getting a business license isn’t the same as forming a corporation or an LLC. Both of these are required when you want to legally operate an LLC in a given state, county or city. However, if you do have an LLC and still no business license, you risk being in violation of the law (and paying a lot of money) if you’re ever found to be in business without one.

It is vital that you understand all the legal business entity requirements in each state you plan to operate your business in. Each state has its own set of requirements, and not just the ones listed in this article. Before you start operating in a state, it is always a good idea to consult with your local officials and make sure that you are meeting the legal business entity requirements for that particular state.

The first thing you need to understand is that in order to legally operate in any city or county, you will have to go through a commercial licensing board. In most cases, this means an examiner. Commercial license examiner’s complete detailed reports on your business and the type of operations you plan to have. After reviewing your report, they will give you a formal business license. (Note: Some states require an economic development or zoning committee instead of a commercial license examiner. Read any applicable regulations for any specific recommendations.)

If your business doesn’t meet the licensing requirements for the particular type of operation you want to do (i.e., you don’t own a yacht instead of renting one), then you’ll have to apply for a business license separately from your LLC. This process typically takes about three months. Once you’ve received your business license, your next step is to register your business entity (i.e., your LLC).

The main difference between your LLC and your business license (aside from the fact that you don’t have to pay taxes on the LLC’s profits) is that the LLC can be run freely while the LLC cannot. Consequently, there are some differences in the costs associated with setting up your LLC and running your business entity. Specifically, your filing fees for tax purposes are generally much lower with anLLC than with a business license alone.

Another important distinction between a business license and anLLC is that with anLLCs you cannot conduct business with clients in other states without first obtaining a business license in those states. Consequently, if you want to open a law firm in New York, but want to take a vacation to Florida, you can’t do so because you don’t have your own business license there. On the other hand, by registering your LLC, you can conduct all legal proceedings in any state in which you decide to operate.

There are some differences between anLLCs and business licenses that go beyond the differences in costs. AnLLCs do not provide the same protection from frivolous lawsuits as do business licenses. Also, anLLCs do not provide the same level of protection from the IRS as do business licenses. Finally, anLLCs do not offer the same security from expatriation as do business licenses. You should consult with a tax professional to discuss these issues further.

If you decide that you want to obtain either anLLC or a business license in Massachusetts, consult with a tax professional to further understand the differences. The cost of obtaining either one may be something that you’re not prepared for. In this case, it may be best to obtain both. In addition, anLLCs and business licenses are rarely changed once they have been obtained. This means that you may need only one application if you don’t want to change your domicile or business location.

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