Monday, April 30, 2012

My Business Is a Real??

My Business Is a Real ??

Sometimes a some of us don't know what as already they doing on they're business. This is an incredibly noble cause. However, it is important to follow the rules and operate your business legally to avoid going to the pokey. So, now let's to read it.
“This Isn’t a ‘Real’ Business” For whatever reason, they were discussing how this enterprise was not a real business so they did not have to go through the typical formalities of starting a business. They thought that if they did not form a legal entity, they weren’t a “real” business. If you don’t form a legal entity, you are either a sole proprietorship or a partnership depending on the number of owners. You are a real business if you sell goods or services in exchange for money or something else of value. Not thinking you are a real business means that you don’t think you need a business license, and, in this case, a permit from the local health department to cook and sell food products. “We are Going to Give Away All The Profits” I also overheard them say that they want to donate all of the profits to charity. This is an excellent idea, and again, a noble cause. However, you have to remember that the IRS only allows you to deduct 50% of your income for money donated to qualified charitable organizations. Therefore, if you donate 100% of the income generated, you are paying for the privilege of donating money. The better idea would be to give 50% of the profit away as a legal entity and reinvest the remaining profits into the business to continue expanding the business to bake more cupcakes and eventually give away more money. “We Don’t Need a Health Permit” Going along with the thought that this was not a real business, the prevailing thought was that they did not need approval from the local health department. However, if you cook food products and offer them for sale, even online, you must have a permit to do so from your local health agency. I advised one of them to call the Clay County Missouri Health Department to check. Sure enough, she would have to take a class and have her SECOND kitchen inspected to be improved by the Health Department. It’s relatively certain that they are not going to build another kitchen onto their house or rent a kitchen to start. Her other option would be to bum off of somebody else’s commercial kitchen for a while. Other Concerns I was also concerned about to other issues: obtaining a business license and sales taxes. This business would require a business license to operate in the great city of Liberty, Missouri which would require a personal property tax receipt from Clay County, which would mean registering the personal property she uses for the business and paying taxes on them. This is a lot of work to sell cupcakes. Additionally, the business would have to register with the state of Missouri for a sales tax license and charge sales tax for selling cupcakes. The business would have to report that sales tax and pay the tax to the state. The Moral of the Story The moral of this story is that if you sell good or services for profit, you are a real business. At minimum, you need a business license to operate a business in the city you live. There are a whole host of other requirements that you may have depending on the type of goods or services you are selling. It is important to understand the various laws and regulations governing the type of business you want to operate before throwing your door open and selling!

1 comment:

  1. Wonderful blog & good post.Its really helpful for me, awaiting for more new post. Keep Blogging!

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