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Do I need a business license?

Do I need permits in order to run my business?

Do I need to incorporate?

Are there any zoning requirements I need to adhere to?

Do I need building permits? When is an inspection required?

What can you tell me about franchising?

Taxes, taxes, taxes. What taxes am I responsible to pay?

Do I need a federal employee identification number (EIN)?

Do I need an SC tax identification number?

Is there help available to sell my product (or service) to the government?

I need a DUNS (Data Universal Numbering System) number. Can you help?

Can you help locate a copy of the FAR (Federal Acquisition Regulation)?

What is minimum wage?

What about maximum hours, overtime, teenage labor, etc.?

How do I go about getting a loan for my business?

What are the financial and credit requirements for getting a loan?

Are there any grants available for starting businesses?

What is my responsibility, if any, for Worker’s Compensation?

When is a worker a subcontractor versus an employee?

 


Do I need a business license?

Every legal business must have a proper business license. If your business is located within the limits of an incorporated city, you should contact city hall for information about a license. Counties may have business license requirements too. Contact your county office to check on any requirements.

If you operate your business in more than one city or county, (ex: landscaping business), you will need to contact each city and county in which you are conducting work to check if they require licensing. ‘Operate’ is defined as do you do work in their jurisdiction. If the answer is yes then you need their business license. It is not unheard of for a business to have 10 or more business licenses if they operate in the Charleston area.

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Do I need permits in order to run my business?

If you process, handle, cook, store or distribute food in your business, you will need to receive special permits from your county health department.

If you plan to sell or serve alcoholic beverages, you will also need special permits. Contact the Alcoholic Beverage Control Commission at 30 Gervais Street, Columbia, South Carolina 29201 or (803) 898-5864.

Some professions and businesses (for example, schools, nurseries, real estate brokers, etc.) require additional licenses or examinations. To learn about special permits that may be required for your business, contact the Department of Consumer Affairs at PO Box 5757 (3600 Forest Dr.), Columbia, SC 29250-5757 or (803) 734-4200. www.scconsumer.gov

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Do I need to incorporate?

You can organize your business as a sole proprietorship, a partnership, a Limited Liability Company or a Corporation. Your lawyer and your accountant can tell you the advantages and disadvantages of each structure. Corporations and LLC’s must register with the Secretary of State, Division of Corporations at PO Box 11350 (Room 109 Edgar Brown Building), Columbia, SC 29211 or (803) 734-2158. www.scsos.com

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Are there any zoning requirements I need to adhere to?

You will need to be certain that your business is in an appropriately zoned location. To find out about zoning classifications, contact your city or county zoning office.

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Do I need building permits? When is an inspection required?

If you are constructing or altering a building, you will need a building permit. All buildings must also be inspected. To arrange an inspection or to find out what is required, contact your city or county building inspection office. Since some agencies charge for second inspections, be sure your building is ready before arranging for an inspection.

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What can you tell me about franchising?

Buying a franchise outlet can be a complicated process. Depending on each individual’s abilities and goals, a franchise business structure has both advantages and disadvantages that should be evaluated before a purchase is made. There are over 4,000 different franchise systems to choose from, each with different rewards, requirements, and obligations. Franchisers are required by law to provide prospective franchisees with a copy of their Uniform Franchise Offering Circular (UFOC), which describes the terms, conditions, and contractual obligations of the franchise agreement. Walk away if they will not provide a copy of this document.

The Small Business Development Center can help you to review the UFOC, and evaluate the market opportunities of a franchised business. Because the purchase of a franchise usually involves a substantial capital investment, we recommend that you work with your accountant to clarify the earnings and tax implications of the purchase. Since the UFOC is a legal document that contractually binds the franchiser for a long period of time, a review of the document by legal counsel is also strongly advised.

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Taxes, taxes, taxes. What taxes am I responsible to pay?

The Small Business Tax Workshop sponsored by the Internal Revenue Service will answer many of your taxation questions. This workshop is free, and is offered throughout the year and sponsored by the Small Business Development Center in the Charleston Area. Call (843) 740-6160 for the schedule or to register (required).

Income Tax – What and when you owe the federal and state government will depend upon the legal structure that you choose. Once you have selected the legal structure that makes the most sense for you, ask your accountant about your federal and state tax requirements! www.irs.gov and www.sctax.org

State Sales Tax – Contact the Sales and License Division of the S.C. Department of Revenue to determine if you are required to collect and pay sales tax. If you are required to collect and pay this tax, you will need an SC tax identification number. www.sctax.org

Withholding Taxes for Employees – You are required to withhold these taxes from the wages paid to your employees: federal income tax, state income tax, social security and medicare.

Unemployment Taxes – As an employer, you are required to pay unemployment taxes. Contact the I.R.S. at 1-800-829-1040 for information about the Federal Unemployment Tax (F.U.T.A.), and the SC Employment Security Commission at (803) 792-7046 for information about the State Unemployment Tax (S.U.T.A).

Property Taxes – If your business owns real property, you should check with your county tax assessor’s office to find out about property taxes. You may also be liable for state property taxes on inventory and equipment. For more information, contact the State Property Tax Division of the SC Department of Revenue at PO Box 125, Columbia, SC 29214 or (843) 852-3600. www.sctax.org

Other Taxes – There may be other taxes for which you are liable, such as the Federal Excise Tax or the State Franchise Tax. To check on other taxes, contact the Internal Revenue Service at 1-800-829-1040 and the SC Department of Revenue (843) 852-3600. www.sctax.org

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Do I need a federal employee identification number (EIN)?

Yes, you need a federal employee ID. Only when your business is a sole proprietorship, general partnership or limited partnership with no employees is this optional (you or you and your partners are considered owners and not employees). To apply for an EIN, contact the IRS at 1-866-816-2065. www.irs.gov

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Do I need an SC tax identification number?

There are two instances in which you will need a S.C. tax ID: (1) if you have employees and/or (2) if your business is required to pay sales tax. Contact the SC Department of Revenue so that it can make this determination for you: (803) 898-5872. www.sctax.org

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Is there help available to sell my product (or service) to the government?

Yes, the Small Business Development Center (SBDC) offers assistance with procurement, which is the process by which the government buys goods and services. They can also provide assistance in acquiring a CAGE code (Commercial and Government Entity). Contact the Charleston SBDC office (843) 740-6160 for an appointment to discuss your particular needs.

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I need a DUNS (Data Universal Numbering System) number. Can you help?

If you need a DUNS number, call 1-800-333-0505. www.dnb.com

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Can you help locate a copy of the FAR (Federal Acquisition Regulation)?

SBDC has the FAR available for client reference. If you want your own copy, you can contact the National Institute of Federal Procurement at (301) 287-2347. www.acquisition.gov/far/

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What is minimum wage?

The minimum wage is $5.85 an hour as of July 24, 2007 and it will increase to $6.55 as of July 24, 2008 and $7.25 as of July 24, 2009. Department of Labor publishes a Small Business Handbook: “Laws, Regulations and Technical Assistance Services.”. This handbook discusses DOL requirements in accordance with Small Business Regulatory Enforcement Fairness Act of 1996. For a copy of this handbook, call 1-888-734-3248. www.dol.gov

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What about maximum hours, overtime, teenage labor, etc.?

These questions are best addressed by contacting:

  • Federal Level: US Department of Labor, Employment Standards Division at Room 1072, 1835 Assembly Street in Columbia, SC 29201 or (803) 765-5981
  • State level: SC Department of Labor, Employment Division, PO Box 11329 (3600 Forest Drive), Columbia, SC 29211 or (803) 896-4300.

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How do I go about getting a loan for my business?

The main requirement for a business loan is that you have a Business Plan. A Business Plan will include projections for your business operations, revenue and expense history (if an existing business), copies of tax records (personal and business), etc. Upon completion, the Business Plan can be presented to banks, credit unions, non-bank lenders, investors, family and friends. To learn more about how to prepare a Business Plan contact your local office of the SC Women’s Business Center, Small Business Development Center or SCORE.

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What are the financial and credit requirements for getting a loan?

Generally speaking, all lenders require the borrower to have a minimum of 20%–30% of the total funds needed to start and run a small business. Additionally, the borrower will be required to provide collateral that is equal to, or greater than, the amount of the loan request. Your credit score and credit history will be a major factor in determining whether or not you get a loan and what interest rate you will be paying.

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Are there any grants available for starting businesses?

We are not aware of any grants or any program that offers 100% loan financing of the cost for starting a business on a federal, state or local level. The Catalog of Federal Domestic Assistance contains all federal government assistance programs and can be searched at www.cfda.gov and a list of all available federal grants can be found at www.fedgrants.gov. The Federal Trade Commission works to expose and prosecute fraudulent and deceptive companies that say they have access to ‘free grants’. They can be contacted at 877-382-4357 or www.ftc.gov.

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What is my responsibility, if any, for Worker’s Compensation?

If you have four or more employees, whether they are full–time or part–time, you must carry worker’s compensation insurance. Contact the South Carolina Worker’s Compensation Commission at PO Box 1715 (1612 Marion Street), Columbia, SC 29202–1715 or (803) 737-5700 for further information. You may wish to request their brochure, “Information for the Employer”. www.wcc.state.sc.us/

If you subcontract work, you have two choices in addressing worker’s compensation. You must either (1) maintain worker’s compensation insurance, or (2) hire only subcontractors who have their own worker’s compensation insurance. If you choose to maintain worker’s compensation for your subcontractors, you may prorate a portion of your premium to each subcontractor. If you choose to hire only subcontractors who have worker’s compensation, they must show their certificate of insurance.

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When is a worker a subcontractor versus an employee?

The IRS (Internal Revenue Service) has devised a 20–point, weighted list to determine if a worker is an employee. In general, if you as the employer have control over the worker, than the worker is an employee. It is recommended that you request the IRS to make a determination for you by filing Form SS–8 with the IRS. They will provide a written judgment. You may wish to order IRS Circular E, Employer’s Tax Guide, for a more complete discussion of this issue. www.irs.gov

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