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Sunday, March 2, 2003

Know what officials need


Small business

By Rhonda Abrams
Gannett News Service

Most of the mail I get from readers deals with the big things - marketing, employees, leadership. But many readers also need help with those little aggravating details of getting the right licenses or permits just to do business in the first place.

So let's clean out the "In" box. As I do, keep in mind:

1. Each level of government has its own specific laws; contact your city, county and state authorities to understand all the regulations for your type of business.

2. It's always a good idea to consult a business lawyer. You also might want to make an appointment at your local Small Business Development Center. Find the SBDC network in your state at www.sba.gov/sbdc.

The bureaucratic things you'll have to deal with fall into three general categories:

1. Identification numbers to keep track of your business with government authorities. For instance: federal identification numbers for income tax purposes.

2. Licenses (or certifications) required to engage in certain types of businesses. For instance: contractor's license, license to sell alcoholic beverages, optometrist certificate.

3. Permits required for specific, often more limited, actions. For instance, building and construction permits, special event permits.

Sometimes, these terms are used interchangeably, such as permit instead of license or vice versa.

Among questions I get most frequently:

• What's a federal tax identification number, and where do I get one?

A Federal Employer Identification Number (FEIN or FIN) and an Employer Identification Number (EIN) are the same thing. If your business has employees, or is a corporation, LLC or partnership, you'll need an EIN. Even if you're a sole proprietor, you may want an EIN, because companies you do business with will ask you for a tax ID number. An EIN seems more professional than a personal Social Security number.

It's very easy to get an EIN. Go to www.irs.gov and get Form SS-4, or call (800) TAX-FORM - (800) 829-3676 - to get the form by mail. Answer the questions on that form, then call (866) 816-2065 (toll-free), and the IRS can assign you an EIN over the phone.

• Do I need a state identification number?

States might assign you an identification or account number for various reasons. The usual are: corporation number for incorporated businesses; employer account number for employer businesses; certificate numbers for specific licenses.

Here is an easy way to find your state requirements and resources on the Internet: Go to www.businesslaw.gov, the Small Business Administration's guide to legal and regulatory information.

• Do I need a business license?

Typically, yes. These are regulated by each county and city. Check with your local governments.

• What's a resale license and where do I get one?

This enables a company to buy goods or materials for manufacture without paying sales tax, because the tax will be charged to the ultimate consumer.

Once again, each state has its own requirements and terminology. Rhonda Abrams is author of "The Successful Business Plan" and "The Successful Business Organizer." Register to receive her free business tips newsletter at www.RhondaOnline.com.



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