The “E” in Ebusiness Does Not Mean Exempt

I’ve recently received a number of emails from ebusiness owners who seem to believe that just because their business is conducted online or from the comfort of their own home, the laws and regulations that apply to brick and mortar businesses do not apply to them. view here has some nice tips on this.

The most common ebusiness questions I get have little to do with creating websites or conducting ecommerce.

They’re more along the lines of “Do I Really Have To?” questions, such as:

“Is it really necessary for me to obtain a business licence?”

“Do I really need a tax identification number?”

“Do I have to pay taxes on the money I make from my website?”

Yeah, yes, yes, yes, yes, yes, yes, yes, yes, yes, yes

Is it really necessary for me to obtain a business licence? Since they don’t have a physical location, many ebusiness owners believe they can get away with skipping this provision.

Sorry for the inconvenience, Charlie. Operating an ebusiness from your workplace or from your home does not exclude you from licencing requirements.

A city and county licence may be required depending on your area.

Fortunately, such licences are not difficult to obtain and are not prohibitively costly. Contact your city or county government offices for information on local licencing standards.

Zoning regulations apply to home businesses as well, which govern how land can be used and can limit those activities. You should look into the zoning regulations and property covenants in your area.

This information is available at the courthouse or by contacting the local licence department.

Aside from the legalities, the best reason to get a business licence is that it helps you to open a business bank account using a DBA.

“Doing business as” is abbreviated as “DBA.”

A DBA is a brand name that you use instead of your own name when doing business. For example, if your name is Joe Jones, you might call your company “Jones Internet Services.” With a business licence, you’ll be able to open a bank account and get checks printed with your company name, giving you the professional appearance that many ebusinesses lack.

Is it really necessary for me to obtain a tax ID number? Online businesses with a physical presence in a territory, known as a nexus, are expected to collect and disclose taxes on taxable products sold to consumers in that state.

If your online company is located in California, for example, you must collect and report sales tax from California residents who make transactions on your platform.

As a result, if you’re selling taxable goods, you’ll need to have a tax ID number (most services are not taxed).