Having a side hustle is a great way to make some extra money, and can even be the first step to working for yourself full-time. Though this kind of contract work may only be part-time, you can save yourself the hassle of costly legal issues by making sure you're properly protected first.
No matter if you're just starting out with a side hustle selling homemade soaps or jewelry, local laws and regulations still apply - so it's important to make sure you're meeting all the requirements! Don't worry though - following the rules is just a way of taking care of your business and making sure it can keep running smoothly. Not following them can result in fines or other consequences, so it's best to stay on top of things.
It's Important to Follow Business Regulations for Your Side Hustle
Complying with business regulations is a way for state and federal governments to keep everything in order. It's designed to benefit you, your business, and your customers. Usually, this involves filing and storing documents, but there are some exceptions. To make the compliance process easier, you can break it down into manageable steps.
Remember that there are external requirements that all businesses must abide by like filing and paying taxes. Don't forget to take care of all the necessary paperwork - otherwise it could lead to late filing fees or other penalties. We want you to be in the know so that you can take the necessary steps to keep your business running smoothly.
Having all your internal paperwork in order can be a bit tricky, but it's important. Make sure you have copies of any documents or records that you need to keep on your premises, such as those sent to the federal or state government. Having all this information on hand is beneficial in the long run, especially if you ever think of selling your business.
Employer Identification Number (EIN):
If you're running your side hustle as an LLC or corporation, you'll need an Employer Identification Number (EIN) from the IRS. For sole proprietorships, you can either get an EIN or use your Social Security number.
No matter where you choose to run your side business, most cities, counties, and states require you to have a business license. This is true even if you are a sole proprietor. Business licenses typically need to be updated either every year or twice a year- so stay on top of it!
If you operate an LLC, corporation, or in some cases, a single proprietorship, you might need to pay a franchise fee or franchise taxes. Don't worry, no matter what kind of business you have, this fee is something that varies from state to state and isn't exclusive to franchises.
Starting your own business can be exciting and a bit daunting. But don't worry - we've all got to pay taxes! There are a few different taxes for businesses, like federal income and employer taxes, that you'll need to take into consideration. It's a good idea to chat with a CPA or small business tax advisor to get your taxes in order - there's no need to be overwhelmed.
Report or Statement Filing Fees
It's important to know that you may need to pay filing fees when submitting your biennial statements or annual reports.
Articles of Amendment
If your company needs to make any changes, such as a name alteration, the addition of officers, or an address update, you'll need to document these changes in your Articles of Amendment. Make sure to follow all state regulations for notification, voting, and filing.
Certificate of Good Standing
Are you ready to get your side hustle fully up and running? Great! Consider applying for a Certificate of Good Standing. This handy document confirms that your business meets all necessary local and state regulations – so you can rest easy knowing everything is in order.
Your Certificate of Good Standing has all the important information about your business, including any DBA you have. This document proves your company is up-to-date on fees and taxes and everything else required to keep your business running smoothly in your area.
LLC and Corporations — Special Requirements
If you're an entrepreneur thinking of starting a corporation, it's important to remember that there are extra compliance requirements that come with it, like shareholder and director meetings, and keeping written meeting minutes. Managing a corporation can be a bit more complex than other business structures, but with some proper planning, it can be well worth it!
Taking Your Side Hustle Full Time
If you've been enjoying your side hustle and are now ready to take the plunge and make it your full-time job, it's definitely time to consider applying for a loan or line of credit. It's also a great opportunity to open a business banking account to help manage your finances. Jump in and enjoy the ride! (https://sbsfg.com/verify-your-business/)
If you decide to take this path, make sure you don't leave yourself vulnerable to the possibility of your company being dissolved. It's important to take care of legal and compliance issues as soon as possible, so you and your business are protected and can focus on achieving your goals.