Legal structure is probably one of the less exciting aspects of starting a business. It's one that can be difficult to understand, but is one of the most important aspects. Not paying the right amount of taxes is one of the quickest ways to attract the wrong kind of the attention from the government.
This week I was explored the Utah website for businesses. I was interested to learn that when it comes to charging sales tax I'll only have to collect and pay tax from my customers when orders come from Utah - where my business is located. At least until the website attracts more attention and greater numbers of orders. WooCommerce has an automatic tax management system. I'm nervous to see how it handles taxes - I hope it calculates everything correctly. The last thing I need is some tax agency coming after me for tax evasion or tax fraud.
I'm am happy with how straight forward and easy it was to register my business with Utah and to obtain an EIN. It was relatively quick and relatively painless. It also wasn't terribly expensive. That's one thing I like about online businesses. If I want to start a restaurant or other traditional business I need to come up with at least $100,000 if not more, plus probably borrow more from the bank. That kind of money takes a while to save up. This online business I can start with only $100-200. I chose to try drop shipping so there's no inventory or overhead costs other than hosting a website. Because there is such a low barrier to entry I also think there is likely to be more competition. But competition is what business is about.
I'm looking forward to trying to attract some people to my website - when it's ready. I've got more work to do on it. It's starting to take shape though, which is fun to see.
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