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License terms for establishing an on-line business - Small Business Nation
Nowadays it is simpler than ever to start an on-line business. However, business owners interested in reselling on-line can get baffled by federal rules and license terms. Many times an on-line business is no different than a ''brick and mortar'' business as many of the same state licences and approvals are needed.
However, there are some important differences that a would-be digitally businessman should consider before setting up his business. Below we will briefly discuss the relevant licences, approvals and registration between you and your company's opening date now. As a rule, this is the first stage in setting up a company. However, if you are a self-employed individual, you do not need to have your name registered at the state registration stage - although many states request self-employed individuals to use their own name as a business name unless they formalize a "Doing Business as" name.
Please go to your Foreign Minister's website to find out about country-specific needs and (if you are ready) sign up for your company name. Employer ID number (EIN) is a government ID number assigned by the German Revenue Office to help companies and organizations identifying a business unit. Almost all companies must have a VAT registration number, which can be obtained from the IRS on-line.
When your company is run as a single business (and you have no employees), you can use your National Insurance number instead of an EIN on government paperwork and other government paper. But most small business consultants still suggest getting one to keep your business and your tax bills separated.
The majority of states need a different state fiscal ID number if your company wants to employ staff or if it wants to resell goods or provide a service. When your on-line business has staff, you must log in to the State Workers' Accident and Unemployment Service. Some countries ask you to sign up, even if you are the only member of staff.
In some countries, your request for a state fiscal ID number can also be registered with these authorities. So if your state has VAT and your business includes the sale of goods or a service, you may need to obtain a state fiscal license (also known as a "seller's license"). If, however, your on-line business does not have an effective real-life physical location (legally known as Nexus), then you are unlikely to be liable to pay VAT for that state.
When you are not sure whether your company is a physically present or not, please go to your Foreign Secretary's website. Certain occupations need a state trade licence. In order to obtain approval for such a licence, the candidate must normally provide evidence of certain capabilities or trainings. Countries usually need a permit for anyone providing individual service, such as health coverage, legal, real property or auctions.
Only a few of these licences will be valid for on-line transactions (unless you are earning a fee by operating an online bidding platform), but it is a good idea to clarify this with your Foreign Minister's website to be sure. Companies that participate on-line in transactions that are directly controlled by government authorities must obtain approvals or licences from these authorities.
If, for example, you ship wildlife or crops across state borders, you must obtain a license from the U.S. Department of Agriculture. Small Business Administration website provides a complete overview of government licensing and approvals. One of the main distinctions between on-line and off-line transactions concerns certain legislation related to data protection, safety, protection of intellectual property and tax.
Much of these policies and regulation affect merchants on-line, but even if you sell nothing about your site, legislation that covers your digit assets and on-line advertisements may still be applicable to your business. Small Business Administration provides a comprehensive overview of the special features of e-commerce legislation. When you run your business from home, you will want to check the applicable local or district legislation to see if you need a homework license.
The Small Business Administration article provides more information about operating a Home Business. Would you like to know more about the legal requirement for setting up a company? Check out our SBN 101: guide to Business licenses & permissions, which will explain the different kinds of licensing and approvals, identify the different governments that are issuing them, and lead you through the best application practice.