- Before launching any business in Missouri, it is important to research the laws and regulations related to businesses in the state.
- When starting a business in Missouri, you must decide on a structure that best fits your business.
- Depending on the type of business you are running, you may need to apply for certain licenses and permits in order to operate legally in Missouri.
- Selecting the right name for your business is important, as it will be the foundation of your company’s identity.
Starting a business is not a cakewalk. Getting a company off the ground and running it takes a lot of effort, time, and patience. Regarding the choice of location, no doubt, Missouri is a great pick. The state attracts a corporate tax rate of only 4%, making it one of the most tax-friendly states in the country. However, if you plan to start a business in the state, you must also ensure that you comply with the local laws of the state as well.
You must file paperwork and obtain the correct tax licenses and permits. If you are a novice and have no idea how to start a business in Missouri, we are going to help. We have developed this guide to help people start their businesses in Missouri. However, be informed that more than having an idea of starting a new business is required. There are a lot of after-maths you need to consider.
Before getting your business off the ground, you must consider a few things. First, before you start with the application procedure, paperwork, and spending money setting things up, spend some time researching. Research and write a good business plan explaining the products or services your business is indulged in.
In addition, in the business plan, explain your target market and the strategies you have thought of to market your products or services. Consider a business plan as a blueprint that will serve as a guiding light for your business operations. Also, add the projected budget for your planned avenues to know the aspects that will prove profitable.
Picking The Type Of Business Entity
Choosing the ideal business entity type makes a huge difference in protecting your assets from the business's liabilities. You can establish any of the following listed business entities.
- Sole Proprietorship.
- Limited Partnership.
- Limited Partnership Limited Liability.
- Limited Liability Partnership.
- Limited Liability Company.
Starting a sole proprietorship or partnership business is relatively easy, but these business types don't offer any protection of personal assets against business liabilities. This can put you in significant trouble if your business is sued or has an uninsured claim. On the contrary, other business types offer liability protection, like LPs, LLPs, LLCs, etc. However, in the partnership business type, you need to understand the liability differences for different partners.
In the corporation business type, assets and revenues are generally kept separate from personal assets. Additionally, the LLCs can be taxed as corporations or also have the option of passing profits onto the partners. Another benefit of starting an LLC in Missouri is that you will not have to pay any annual fees like in any other state.
Get Your Company Registered
After deciding on the type of business entity that you want to operate, you need to register it with the state. This will help the business get official unless the type is a sole proprietorship or partnership. The business entity formation papers will be filed with The Secretary of State. The sole proprietorship or partnership business should file a fictitious business name. This is to be done through the Missouri Online Business Filing portal if you use a name other than the legal one.
The other business types, i.e., LLLP, LLP, LP, or corporation, must file the forms from online portals. Based on the business type, you need to file suitable conditions to provide the required information to the state.
Setting Up The Finances
Make sure to complete the process of setting up your finances for the business. The first thing you need to obtain for your business is the Employer Identification Number (EIM). This is available on the IRS website. This number is the tax-free ID number that is used by every business to report taxes at the federal and state levels. This number is also asked at the bank when you open a new bank account for your business.
The same is also required when you obtain an unemployment insurance account with the state. Furthermore, EIN is used when filing your business's tax returns.
Post Business Kick-Start Consideration
Below are a few considerations to be made after you have decided to start a business and decided on a few major aspects.
A Business Idea In Place
Take the required time frame to think of a perfect business idea and explore the possible options for your business. This is the right time to consider your skills, availability, interests, resources, and robust reasons behind starting a business. All such factors will motivate you throughout. In addition, you should evaluate the success possibilities based on the interest in your niche's community.
Do your homework and explore if your business can meet an unmet need of society. After you have the business idea ready, start drafting a business plan. This will help you determine the profit-making chances. In addition, a plan will help you get a rough estimate of your competition, the costs incurred on startups, and the strategies to make money.
Investors and lenders will also have something about your business to review to be sure about providing financial assistance. A business plan will keep you prepared before you start soliciting business funds.
Picking A Business Name
When starting a corporation or an LLC, you need to make sure that the name of your business is distinguishable from the names of other companies already registered on file. To check the availability of your shortlisted name, search for it on the SOS website. If a certain name is available, reserve it for yourself for 60 days straight by filing the required Application for Reservation of Name.
You can renew the reservation for 180 days in total. To operate a certain business entity type, there are a few prerequisites. For instance, the LLCs and Corporations should have their respective initials added at the last of the business name. The LLC business type should have "LLC," and the corporation should have the word "company" at last.
The Required Licenses And Permits
Specific permits and licenses are required to be obtained to start a business and ensure its smooth operations.
- EIN: EIN is an acronym for Employee Identification Number. This number is required for businesses with employees or when the taxes are separate from the owner's. Several businesses do not have an EIN, and there are business reasons behind it. However, if you ever open a bank account, you must submit an EIN, or when you do business with other companies, they will require an EIN to process payments. You can obtain an EIN for your business from the IRS website for free.
- Tax Registration: If you plan to start a business dealing in goods or products in Missouri, you will have to register your company with the Missouri Department of Revenue to obtain the license for retail sales tax. If you are hiring employees for your business, you will have to register with the DOR as an employer and withhold the tax number. You can do both types of registrations online.
- Occupational And Professional Licenses: Such licenses cover people working in different fields. On the internet, there are two places from where you can check all initial information to obtain such licenses. The first is the 24/7 Missouri, and the second is the Missouri Division of Professional Registration(DPR). The DPR website has the required links to different web pages containing detailed information about each profession.
- Regulatory Permits And Licenses: Such licenses cover several areas, including the environment, health and safety, specific services and industries, and construction and building. Visit the Missouri Business website and check the "Registering My Business" section for all permits and regulatory licenses issued by the business. For information related to local licenses and permits, you can check the county or city website where you plan to do business.
Check For Zoning Regulations At Your Business Location
If you have a physical address for your business, you need to check all zonal regulations from where you will operate your business. Before committing to a location, take your time and calculate the total of your business running from that location. Take all utilities and the rent into account. You should also check your business plan to see if shortlisting the desired location is possible during the initial months of starting your business.
Furthermore, verify if the location allows your business type to operate. Review the local ordinances to know all zoning regulations for the town or city you wish to operate at. Furthermore, even if you plan to operate your business from home, you need to check the same with the local zoning laws. In addition, review the lease of your home and the homeowners association rules if they apply to your home.
Identifying Business Insurance Options
To manage your business risks, it is critical to purchase the ideal insurance. Furthermore, insurance options keep business owners at peace of mind, and they can focus more on the growth of their business. Following are the few types of business insurance options available.
- General Professional Liability Insurance: This policy helps protect businesses from lawsuits, financial losses, if any, from property damage, and also third-party injuries that happen on the job. The Missouri law doesn't mandate buying of general liability insurance. However, purchasing this license becomes mandatory if you plan to rent an office, lease a space, or a warehouse.
- Worker's Compensation Insurance: Commonly known as worker's comp, this insurance covers all illnesses and injuries that may occur to the employees when working under you. This license becomes compulsory if your business has five or more employees in Missouri.
- Business Interruption Insurance: This insurance covers earnings lost due to the damages to physical properties. The damage is severe to the extent that it interrupts the operations like tornadoes, which are common in Missouri.
Marketing The Business
After everything has fallen into place, marketing your business to the target audience becomes critical. After your business is up and running, your job is still ongoing. You will have to create a marketing strategy for your services and products. Word of mouth is undoubtedly a great start; a solid marketing plan will fuel your marketing efforts. However, you must consider it from different perspectives to obtain the best results.
A combination of paid social media ads and customer and public relations will make your business stand out. Use these channels effectively and mindfully, according to what is working for your business best.
We tried comprehensively listing the major steps of starting a business in Missouri. The decision will be both fun and profitable. To start most of the business types, two factors are paramount, obtaining EIN and getting the business entity registered with the state. Then, run your business as you intend to and earn as much profit as you have projected.
Do I need to get any business license in Missouri?
A Missouri Sales Tax License is required in the state if you are operating a business selling tangible goods or taxable services. In addition, certain professionals in the state may have to obtain other permits and licenses.
Is a partnership required to be registered in Missouri?
General partnerships are not required to be registered within the state. However, some specialized types of partnerships, like LPs, LLPs, and LLPs, will require registration in the state.
Can I run a small business without registering?
You can run a sole proprietorship business in the state without getting it registered. However, registering with the local government is essential to collect and file state taxes.
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