What direction should i go in first to start my small business?
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What direction should i go in first to start my small business?
Hi. I live in Vermont and I want to start my own small business. I’m kind of new
to the whole thing but I really want to start my own business. The things i want
to sell are handmade things such as jewelry, candles, cupcakes, and hand knit
items. Any advice I can get would be greatly appreciated. Thank you in advance.
Asked on July 23, 2017 under Business Law, Vermont
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 7 years ago | Contributor
1) You should establish an LLC for the business. An LLC, or "limited liability company," will help protect your personal assets (e.g. bank accounts, real estate, vehicles) from most debts, obligations, or liability resulting from your business, such as if your business breaches a contract, or someone sues your business. You can set up the LLC through your state's department of state; Google "register LLC Vermont" and look for the official government (Dept. of State) website.
2) When you establish the LLC, select "partnership," "pass through," or "disregarded" tax treatment; that way, there will be no "double taxation" of profits (taxed once at the business level; taxed again when the profits are taken out by you). Instead, there is only one level of taxation: profits and losses (which can provide tax deductions) drop directly to your own personal "bottom line" and are taxed as part of your personal income.
3) Make sure you buy adequate insurance--both liability insurance, to provide additional protection from lawsuits, and for any inventory (e.g. jewlery) you have.
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