Starting a business is no simple feat. It requires discipline and perseverance as you walk into the unknown. Yet, this is also the opportunity to fulfill a dream of a lifetime. And if you enter the process with an open mind and expect to learn on your feet, you’re already on the pathway to success. With the right planning and enough foresight, you can skip some of the headaches and reach major milestones more quickly. You have the funds in place; now it’s time to put pen to paper and learn how to start a side business.
Here are some tips to help you get your side business off the ground in the state of Missouri.
1. Collect Expert Advice
Before you dive headfirst into your dream job, you’ll want to gather expert advice from those most involved in the new business’s startup process. Who better to turn to than those who regularly help small businesses get off the ground? Lawyers, financial advisors, accountants, and other business owners can give you insight into the legal process and help you discern which steps you need to take next.
You can also do your own online research to learn more about the filings required for general business corporations. For example, all corporations filing in the state of Missouri must file an annual registration report. Corporations created after July 1, 2003 must file the annual report by the end of the first month of business. Missouri law does not allow these due dates to change.
2. Create a Business Entity
The next step is to create a business entity. You’ll file as one of the following:
- General partnership
- Limited partnership
- Limited liability company (LLC)
As a corporation, your first step will be to file an article of incorporation and include the information required by Section 351.055. The secretary of state’s office provides a form to ensure that new businesses are in compliance with state-level requirements. First-time filers can also take a look at the schedule of associated fees and charges.
Then, choose a name for your business based on availability and state requirements. Names for a corporation can be reserved for up to 60 days with two additional 60-day renewal periods if needed. Corporations cannot reserve past the 180-day mark. The fee to reserve a name is $25 for all business entities except limited liability partnerships, the fee for which is $30.
3. Apply for a Federal Employer Identification Number (EIN)
A federal employer identification number, or EIN, is a nine-digit number used by the IRS to identify the employers for tax purposes. To apply for your EIN, you must first determine your eligibility. To meet the requirements, your primary business must be located in the U.S., and you must have a valid taxpayer identification number. Only one EIN filing is allowed per person per day.
You must be able to complete the application in one sitting. Sessions expire after 15 minutes. In the event that your application expires, you’ll need to start a new one. Finally, submit your application for approval after you’ve completed all primary validations.
When your form has been submitted, you will get your EIN immediately. You can save, download, and print your EIN confirmation for your personal records.
4. Register for State Taxes
Next, you’ll need to register for Missouri state taxes. The Missouri Department of Revenue outlines the process and shares new resources to help new businesses navigate what can be a complicated process. On the site, you can access a checklist that walks you through each step, and the items you need to complete the form including:
- Social Security number, address, and birthdate (of each business partner)
- Physical address and mailing address
- Federal employer identification number (EIN)
- Estimated monthly sales tax
- Estimated monthly wages paid
- Charter number or certificate of authority
- Power of attorney
5. Secure Workers’ Compensation Insurance
Workers’ compensation provides medical coverage and a portion of lost wages to employees injured on the job. Coverage also includes employee rehabilitation and death benefits.
Each state has its own set of workers’ compensation laws. Examples include injuries caused by slipping on a wet surface, carrying heavy machinery, respiratory illness or infection, or hearing loss. Workers’ comp is required in most states, with a few exceptions. Small businesses who forgo workers’ compensation put their businesses at serious risk.
To learn more about the rates and policies available in Missouri, take a look at the Missouri Department of Labor.
6. Register with Other Missouri Agencies
As you figure out how to start a side business of your own, you're bound to have questions about how to get the ball rolling or—after you have—how to manage and grow your business. MOSourceLink and the University of Missouri can help you get started, especially for those interested in starting their own nonprofit.
For all of the basics of banking and business, check out FSCB’s blog.