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Stuff Every New Business Owner Should Know

Setting up a US business: LLC or S corp, EIN, registration, licenses, sales tax, bank account, insurance and contracts.

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  1. If you start selling without registering any business type, what are you automatically?
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    A sole proprietorship. The SBA says you are automatically a sole proprietor if you do business but never register as anything else. An LLC or corporation only exists after you file with your state.

  2. Who is responsible for a sole proprietorship's business debts?
    Show the answer

    The owner, personally. A sole proprietorship is not a separate legal entity. The owner's personal assets and the business's debts are tied together, so the owner can be held personally liable.

  3. What does each partner put into a partnership, according to the IRS?
    Show the answer

    Money, property, labor or skill. The IRS defines a partnership as two or more people in business together. Each contributes money, property, labor or skill and shares in the profits and losses.

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  1. If you start selling without registering any business type, what are you automatically?
  2. Who is responsible for a sole proprietorship's business debts?
  3. What does each partner put into a partnership, according to the IRS?
  4. Does a partnership pay federal income tax on its profits?
  5. In most states, can two people form a general partnership without a written agreement?
  6. In most states, how much personal liability do partners in a general partnership have?
  7. In most states, which partnership type is designed to limit every owner's liability?
  8. What level of law authorizes a limited liability company (LLC)?
  9. By default, how does the IRS treat a one-owner LLC for income tax?
  10. By default, how is a domestic LLC with two or more members taxed?
  11. Which IRS form does an LLC file to choose to be taxed as a C corporation?
  12. A one-owner LLC with no employees and no excise taxes: does it need its own EIN for federal tax?
  13. An LLC wants to be taxed as an S corporation. Must it file Form 8832 first?
  14. What is the most shareholders an S corporation can have?
  15. For the S corporation 100-shareholder limit, how is a married couple counted?
  16. Which of these can NOT be an S corporation shareholder?
  17. How many classes of stock may an S corporation have?
  18. Which IRS form does a corporation file to become an S corporation?
  19. To be an S corp for this tax year, file Form 2553 within how long after the year starts?
  20. An S corp owner who works in the business must be paid what before taking distributions?
  21. How are S corporation profits taxed for federal income tax?
  22. Does every state honor the federal S corporation election?
  23. Why do C corporation profits face a "double tax"?
  24. What is the federal income tax rate on a C corporation's taxable income?
  25. Which federal income tax return does a C corporation file?
  26. What happens to a corporation when a shareholder sells their shares?
  27. What does an LLC usually protect if the business is sued?
  28. What does "piercing the corporate veil" mean?
  29. In most states, which habit can lead a court to pierce the corporate veil?
  30. What is an LLC's operating agreement?
  31. How much does the IRS charge for an Employer Identification Number (EIN)?
  32. If you apply online and are approved, how fast do you get your EIN?
  33. Which IRS form is the application for an EIN?
  34. If you apply for an EIN by mail, how early should you send Form SS-4?
  35. Forming an LLC or corporation: which comes first, the state filing or the EIN?
  36. If a sole proprietor needs an EIN, how many cover multiple businesses and trade names?
  37. What mainly determines how and where a business registers?
  38. Where do most states accept business formation filings?
  39. Which document commonly forms an LLC with a state?
  40. Which document is required when incorporating a business?
  41. What does a registered agent receive for a company?
  42. Where must a registered agent generally be located?
  43. What may a company need before doing business in another state?
  44. What is another name for a DBA?
  45. Does registering a DBA alone give legal name protection?
  46. When does a business generally need a federal license or permit?
  47. What determines which state and local permits a business needs?
  48. Why should permit renewal dates go on a compliance calendar?
  49. Which recurring state filing may keep an entity in good standing?
  50. Can foreign qualification create ongoing duties in two states?
  51. In states that have one, what does a franchise tax usually tax?
  52. What should a seller do before collecting a state's sales tax?
  53. Who usually collects sales tax from the buyer and sends it to the state?
  54. What sales-tax rule did the Supreme Court reject in Wayfair?
  55. Where should a remote seller verify an economic-nexus threshold?
  56. When is a resale certificate generally appropriate?
  57. Should a business use a resale certificate for supplies it will consume?
  58. What should a seller do with customers' resale certificates?
  59. Which five states have no state-level general sales tax?
  60. Are the same products and services taxable in every state?
  61. When should a new owner open a business bank account?
  62. Should business money share the owner's personal checking account?
  63. Which documents do banks commonly request for a business account?
  64. Under cash accounting, when is income generally reported?
  65. Should tax calculations and business books use the same accounting method?
  66. Can a business freely switch accounting methods after choosing one?
  67. Why keep receipts, invoices, deposit slips, and canceled checks?
  68. Does the IRS usually require one specific bookkeeping system?
  69. How long does the IRS generally say to keep business tax records?
  70. How long must employment tax records generally be kept?
  71. How long should federal tax records for business property generally be kept?
  72. Which IRS form does a sole proprietor use to report business profit or loss?
  73. What is the federal self-employment tax rate?
  74. The 15.3% self-employment tax is made of which two parts?
  75. At what amount of net self-employment earnings must you pay self-employment tax?
  76. Can a self-employed person deduct part of their self-employment tax?
  77. Which form do sole proprietors generally use to figure their estimated tax payments?
  78. After withholding and credits, individuals generally make estimated payments if they expect to owe at least how much?
  79. When is the first estimated tax payment of the year generally due?
  80. The second estimated tax payment, for April 1 to May 31, is generally due when?
  81. The last estimated tax payment for a year, covering September to December, is due when?
  82. Paying at least what share of last year's tax generally avoids the estimated tax penalty?
  83. For 2026, Form 1099-NEC reporting generally begins at what payment total for a nonemployee?
  84. By what date is Form 1099-NEC generally filed with the IRS?
  85. Which form does a contractor give a business so it has their correct taxpayer ID number?
  86. Under the general IRS home office rule, how must the space be used?
  87. The IRS simplified home office method allows how much per square foot, up to 300 square feet?
  88. Is driving between home and your main place of work a deductible business expense?
  89. Which insurance protects a business from claims of bodily injury or property damage to others?
  90. Which insurance covers a service business against claims of errors, negligence or malpractice?
  91. Which insurance covers losses when a product you make or sell is defective and hurts someone?
  92. Which insurance protects a business's own buildings and equipment from fire, storms and vandalism?
  93. What is a business owner's policy (BOP)?
  94. In most states, which insurance must an employer carry for work-related employee injuries?
  95. Does a personal auto policy usually cover a vehicle used for business work?
  96. In cyber insurance, what does first-party coverage protect?
  97. As of 2026, must a new LLC formed in the United States file a BOI report with FinCEN?
  98. A foreign company newly registered to do business in a U.S. state has how long to file its BOI report?
  99. What is one of the most common reasons the USPTO rejects a trademark application?
  100. Can you put TM next to your brand name before filing any trademark application?
  101. When may a business use the ® symbol with its brand?
  102. Domain names like .com are registered through which kind of company?
  103. Which protocol was created to replace WHOIS for looking up domain registration data?
  104. For a generic domain like .com, what is the maximum unexpired registration term?
  105. In most states, offer plus acceptance form which basic element of a contract?
  106. In most states, what does consideration mean in contract law?
  107. In most states, which contract generally falls under the statute of frauds?
  108. Under the federal E-SIGN Act, can a contract be rejected just because it was signed electronically?
  109. Under accrual accounting, when is income generally reported?