A retail outlet is one of the easiest businesses to open, whether a physical store or an eCommerce site. Many people dream of running their own store and becoming successful business owners, whether locally, nationally, or on a global scale. Working for yourself is the future of work and in this business blog we look at the legal requirements for opening a retail store.
With so much help and guidance available through Internet articles and online courses, becoming a retailer is more accessible than ever, especially for new entrepreneurs. However, there are several legal matters you need to be aware and to open a retail store, you need to meet several legal requirements. These include:
- Obtaining a license from the state
- Registering with the federal government
- Meeting other regulations
The first step toward opening a retail business is getting a business license. You must be 18 years old and have a valid Social Security number. You must also pass a background check and pay a fee. The business licenses and permits you need to open your store depend on which city and state you live in, and it’s a good idea to get in the know while your business is still in the planning stages.
Consider hiring a lawyer and an accountant to help you understand what laws and tax rules apply to retail stores in your state. You must obtain the licenses and permits before opening the doors to your business. In most states, you can get a business license online. However, if you live in New York, you must apply at the county clerk’s office. If you plan to sell products online, you’ll also need to register with the U.S. Department of Commerce.
Pick a Name
Choosing a name for your business might not sound like a legal matter, but there are trademark laws to be aware of. Before printing business cards, make sure you’re permitted to use your chosen name. You can find out online whether the name you want is already in use where you live by checking business names registered with the Secretary of State. You should also conduct a free trademark search to see if your name is available for use in all 50 states.
Choose a Legal Structure
While your retail business is still in the planning stages, you need to choose a legal structure for your store. The most common arrangement for small retail businesses is an LLC (Limited Liability Company). This is the most straightforward structure to use, and it’s the best option for those who want to avoid some legal formalities. You should also incorporate to protect yourself in case your business does not take off as planned.
Abide By MSRP
If you’re selling goods manufactured elsewhere, you must ensure you’re not selling too far below MSRP (Manufacturer’s Suggested Retail Price). You also need to follow the MAP (Minimum Advertised Pricing) law, which applies to the price you advertise your products at online or in-store.
If you want to know more about MAP and MSRP laws, you should find an internet lawyer to review MAP policy for your business. These laws apply whether you advertise online or in print and are required by online stores and brick-and-mortar businesses.
Tax ID Number
You must apply for a tax identification number (TIN) when opening a new business. A TIN is a unique identifier that helps the government track your income and expenses. You must obtain one before you can file taxes. If you already have a TIN, you can use it to register with the IRS.
File for an EIN
An EIN (Employer Identification Number) is a legal requirement for those who plan to hire employees to work in their business. It is also known as a Federal Identity Number as it is used to identify a business entity. It’s easy to file for an EIN online, but you must have a valid Taxpayer Identification Number before you apply.
There is a saying by Benjamin Franklin nothing is certain except death and taxes and for we will add insurances. Do you know anyone who has never had any type of insurance? It would be highly irregular to go through your life escaping the need for insurance. For your retail business, you will also need insurance coverage for yourself, and your employees, including:
- Worker’s compensation insurance
- General liability insurance
- Auto insurance (if you have a physical store)
Plus, you may also need commercial property insurance. Of course, if your new retail business is online, you won’t need commercial property insurance.
Fire Safety Certificate
You will also need to comply with local fire safety codes if you’ve got a commercial premise for your retail business.
Know your market, and if your customers are foot traffic in your local area, a physical store may be ideal for your retail business. However, if your audience is spread out globally, choose an online eCommerce site for your retail business. Once your business is set up legally, you can focus on merchandise and attracting customers. Dropshipping is still very popular, and your role is as a digital and social media marketing marketer – driving eyeballs to your physical assets and platforms where you’re selling your products.