This is a very common question from budding entrepreneurs, “Can I run a business without actually registering it?” The truth of the matter is that there are several ways to conduct business without the hassle of registering it. Each way will require a different legal form to fill out and each will call for different time commitments. However, after reading this article you will know which route to take to start your business.
First, if you do decide to run a business without registering it, you need to get a business license. A business license is an important document that will show prospective lenders that you have a legitimate business that can pay taxes. Without a license you may be disqualified from receiving loans from financial institutions. Depending on the size of your company, you may also need to acquire some forms of regional or state licenses.
Next, before you can run a business legally, you will need an S corporation or limited liability corporation. These types of companies are designed to protect the owners of the business from any personal debts that may arise from the business operations. Because these businesses are not registered you will not be able to use them as collateral for debt consolidation. You can however, use them to run your business until you have paid off all debts. Keep in mind that operating a business without these documents is considered illegal by the IRS and state tax agencies.
The next way to conduct your business legally is to find a domestic partner. Partnerships allow you to share profits while keeping everything centralized. However, there are still rules that you need to follow. You cannot be the majority owner of the partnership. Also, you cannot be the general manager of the partnership.
There are other ways to run your business legally although they are not as popular as the ones listed above. One way to set up your business without getting registered is to hire yourself out. You will have to pay the employee wages and provide benefits. Then, when you file taxes the business will be listed as your primary employer.
Another way to set up your business is to form an LLC. An LLC is a Limited Liability Company. This type of business will allow you to run the company on your own as if it were your own. However, you will be taxed as a sole proprietor so you will have to pay all of the taxes on your own.
Last but not least, you can decide to run a business through an attorney. This type of entity must be registered as a business with the State. You do not need to pay taxes on the income. However, you will need to pay fees to the attorney if you decide to go with this option.
Hopefully answering the question “Can I run a business without registering?” will help you determine which option will work best for you. There are many things that you need to consider before making the final decision. You should consult with an accountant to make sure you have considered every angle and worked out everything you need to.
If you decide to run your business using a sole proprietorship, you will still have to pay all of the taxes. You will also be limited in what you can do because you have to hire yourself out. A sole proprietorship however does offer some benefits. If you have good credit you can apply for loans and even buy property. You will not need to register your business.
Another option is to use a corporation. A corporation has many advantages over sole proprietorships. The first thing to consider is how it works. The general rule is that you have to pay taxes on the business’ profits. This makes it very simple because you do not have to pay any profit tax at all. The other advantage to this type of company is that you are able to deduct expenses from your income taxes.
Lastly, you can run a business using a partnership. If you decide to go with this option then there is one important decision to make. Can you form a partnership without going through the red tape? If you are concerned about this, then take time to research the pros and cons before making your final decision.