We invite you to learn about how to formalize your online business in the United States. Did you open an online store and want to have everything legal? The requirements are the same as for a physical business, although it also has its peculiarities. In Hispanic Entrepreneurs we tell you what you should do.

Boost your online business

The Internet revolutionized the way we do business and represents an opportunity for small and medium-sized businesses to grow.

They give you the ability to reach a larger market, as well as work 24 hours a day, every day. In addition, any type of physical or digital products can be sold.

But to start your business you must comply with the legal requirements for an online store in the United States. These are similar to those that any physical business must comply with, but it has some peculiarities that you should know.

To formalize it, review the information about how to open a business in the US and you will have a complete idea. In the same way, here we will present you a guide that will help you clarify your doubts.

Either way, we want you to know that it is a good time to start in this sector. Consumers are increasingly confident to shop online. In addition, the issue of the pandemic caused sales to increase through this medium.

Another advantage it offers is that you can save expenses that are frequent in physical businesses such as commercial rental or storage. This does not mean that you do not have legal and fiscal responsibilities to fulfill.

Therefore, if you want to take your online store forward and avoid penalties, you must formalize it and meet all the requirements.

Looking for options to sell online? The dropshipping system It is an alternative that requires little investment, but you must choose the products well to be profitable.

How to formalize your online business in the United States?

Opening a business on the internet is very easy, anyone can do it. It all starts with a business idea and a plan to make sure you have a market and are profitable. But what about the legal aspect? What are the steps to follow in this regard?

As in any other company, there are certain steps to follow and regulations that must be followed. First, you need to choose the business name and make sure it is available in your state.

That same name should be part of the domain name, so it is important to complete the registration before opening the online store. If you do not do it, you risk that the name does not match and you have to change it and, on the other hand, a lawsuit by whoever has registered it before.

The next step in this guide on how to formalize your online business in the United States is choose the structure of the company. To register, you must know what type of business it will be, since it will determine the requirements to be met and the fiscal responsibilities.

In the United States there are several options to choose from, but when it comes to online stores, the most frequent are the following:

  • Single owner. It is the easiest to create and the most common in online businesses. You do not have to create a separate entity, but a DBA is registered if it operates under a different name than the owner. On the other hand, it has no limited liability and taxes are included in the personal return.
  • Society. It shares characteristics with the previous one, but in this case they are two or more owners. You also have unlimited liability.
  • Limited liability company. One of the most common structures for offline and online companies. In this case it limits the liability of the owners
  • Corporation. It also limits liability and has tax advantages, but is more complex to set up.

Process permits and licenses

You will also have to obtain the permits and licenses to operate. The ones you need will depend on the type of business you have.

In addition, they vary from state to state, so you should check in your locality which ones you should get.

Tax regularization

The issue of sales tax in the United Statess is complex, but you must understand it to run your business. It is recommended that you seek accounting advice to make sure you comply with it.

Each state has its own laws on sales tax and there are some that do not.

What is unique about this tax is that there must be a link between the business and the jurisdiction where it is located. With a physical company it is not a problem, but with digital ones it is not entirely clear. That is why each state has drawn up its laws to define what those links are.

With these new laws, internet sellers must collect sales tax from consumers in the states that require it.

On the other hand, if you sell digital products you should also know that these are taxed in some states and not in others.

Do you have questions about how to formalize your online business in the United States? Get advice to make sure that you comply with all the legal requirements that are demanded in the country.

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