So help the inquiring public that I do not see, here are a few tips on starting a sole proprietorship in Missouri.
Tip #1 - Your name or a fake name
As a prospective business owner, you have already decided that you are comfortable with the amount of risk you are undertaking. So you need to decide if you want to call this business by your name or use a fictitious name. If you use your name (meaning the checks go to you in your name) then you do not need to do anything at this point. If you decide to use a fictitious name, then you need to register with the Secretary of State office in Jefferson City or your local office http://www.sos.mo.gov/. This link is to the state website in Missouri. It is a fake name if you add anything to your name like Jane Doe Plant Care Service because no mother hopefully has named her child by that name.
Tip #2 - Getting the State Number
Once registered you are ready to get your first license - the Sales Tax & Use Permit. This license allows you to collect sale tax where applicable and submit it to the state when due. This form comes from the Missouri Dept of Revenue http://dor.mo.gov/ and you want the Form #2643. Here you will need a bond to cover your sales tax so don't be over eager in estimating your sales tax but do be comfortable with your estimate. You know the old saying "give unto Ceaser what is Ceaser's..."
Tip #3 - Getting the Federal Number
Now you are on a roll and gaining speed in registering your business. The next step is to get your Federal TIN/EIN number. This number replaces your social security number for the business because as you do business, you will be asked to provide either your TIN or SSN with vendors. In this day, you know the risks of giving out your SSN to anyone you don't know. So go online to http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Employer-ID-Numbers-(EINs) and fill it out. It takes about ten seconds and if you do it by mail, it could take weeks.
Every business owner needs this number but as a sole proprietor, you are not required to get it but it will let you sleep better at night by not giving out your SSN to every Tom, Dick or Harry.
Tip #4 - Setting Aside for all the Necessaries
Next comes the forms for the employee taxes, unemployment, immigration, worker compensation and etc. Let's take each one and break it down.
Withholding Tax
If you are the sole proprietor and have no employees, then you do not need to worry about this one. If you hire anyone else besides yourself to work for you, then you need to file it. This is a state tax so you will need to go to http://dor.mo.gov/business/. This webpage will show you when the taxes are due and the necessary forms to fill out and even file electronically or snail mail them.Social Security Tax
If you are the sole proprietor and no employees then don't worry. But if you hire someone, then you got to follow through. This website will get you started http://www.irs.gov/Individuals/International-Taxpayers/Social-Security-Tax---Medicare-Tax-and-Self-Employment.Unemployment Insurance
As a sole proprietor you will not need to worry about this one also unless you employ anyone besides yourself. Go to this website http://www.irs.gov/Individuals/Employees/Unemployment-Compensation to get the details on what you have to do if you have any employees. Otherwise check it off as something not to worry about until you grow someday.Immigration Form I-9
Again you do not need to worry about this one unless you hire someone. All hired employees and contract laborers need to be "I-9'd" to protect you and them from violations. The website for this action is http://www.uscis.gov/portal/site/uscis/menuitem.5af9bb95919f35e66f614176543f6d1a/?vgnextoid=31b3ab0a43b5d010VgnVCM10000048f3d6a1RCRD&vgnextchannel=db029c7755cb9010VgnVCM10000045f3d6a1RCRD. So like many of the others, if you don't hire, don't worry.Workman's Compensation
As in the other cases, you have a website to go to here to help you also. It is http://www.dol.gov/dol/topic/workcomp/. The change here is if you have five or more employees you need to carry this insurance unless you are in an industry that is considered high risk. To see if you are in the high risk industry listing, call 573-751-3365 (Mo Dept of Property & Casulty) and ask them.Tip #5 - Now for the Locals
Depending on where you are operating your business, you may need to get a county and/or city business license and update your assessment for the added value of the business. So you want to start with the county assessor office to see if you are affected by this change in status. If you are, well then make it happen. If you are not, well you got by that one.
Then you will need to obtain the local licenses. You got your state sales tax permit already now you will need the county and maybe the city licenses depending on where you are operating this business. Start out at the county clerk office and let them guide you through their process. Every county probably has a few unique tweaks to it so start there and follow their suggestions. You will receive a piece of paper you will need to display for people to see authorizing you to collect the county sales tax.
Then if you are operating in a city, you will need the city sales tax permit. So go to city hall and talk to the city clerk there. Same process as with the county clerk just different place. You will get a certificate authorizing you to collect tax for the city.
Now you are ready to hang your shingle and start selling goods and services.
Hopefully these links and suggestions will help you as you go about starting your business. Let me know your questions or thoughts.
