Should I Use My Home Address For My Business: Everything You Need to Know
Should I use my home address for my business? The answer is no. Instead, consider a P.O. box (Post Office Box). Before deciding on a personal or business address, you must first complete various steps when completing your business. 3 min read
2. Registered Agent
3. LLC Taxation
4. Choosing an Address
Should I use my home address for my business? The answer is no. Instead, consider a P.O. box (Post Office Box). Before deciding on a personal or business address, you must first complete various steps when completing your business. The first step includes naming your company. You have a great deal of leeway in naming your business, but you must keep certain restrictions in mind. One such restriction includes using such designators as “LLC,” L.L.C.,” or “limited liability company” when naming your business.
In addition, you must not use the following words, unless you have the necessary licensure:
- Insurance company
Moreover, your name must not be the same or sound too similar to other names already existing in the state database. You may search for names online in the database provided by the secretary of state’s office in your state.
Tax ID Number
In most cases, you’ll need a federal tax identification number, also known as an EIN (Employer Identification Number). This is a number that the IRS uses to label and tax your business accordingly. It can also be described as a social security number for your company. You must have an EIN to do the following:
- Open a business bank account
- Hire employees
- Get a business loan in certain circumstances
You can apply for an EIN via the IRS website, and the process only takes a few minutes.
Most states require you to have a registered agent; a person or entity that accepts official paperwork on behalf of the company. Such documentation could take the following forms:
- Service of process
- State paperwork
- Tax reminders
Registered agents must reside where your company conducts business, and you must appoint one agent for each state in which your company conducts business. In addition, the registered agent must have a physical street address in the state where your business resides. You may appoint yourself as the registered agent, or anyone within your company. You may also choose an attorney or a registered agent service company. Also take note that the registered agent must keep regular business hours to receive legal paperwork during those hours.
After choosing your registered agent, you must decide how your business will be managed. In your articles of organization document, you must note if your LLC is member-managed or manager-managed. A member-managed LLC occurs when the founders/members manage daily affairs of the company. Manager-managed LLCs are comprised of managers that are appointed by members to manage business affairs. When it comes to management structure, you may tailor the operations of your business to your liking, and all information pertaining to management should be noted in your operating agreement. In your operating agreement, you should also note the percentage shares held by all members.
If you’re a single-member LLC, for instance, you would simply note that you own 100 percent of the company. If you have additional members, this becomes more complicated. Therefore, you and other partners must decide how shares will be divided. You may divide profits and losses based on contributions or other factors. Regardless of the proportionate share, ensure that everything is in writing to prevent miscommunication and potential conflicts.
If you choose to register an LLC entity, you should know about pass-through taxation. Pass-through taxation occurs when profits and losses flow from the business to individual shareholders to file on their personal tax returns. LLCs do not pay business income taxes. You can also choose other tax classifications. For instance, you may choose a corporate tax classification for your business, but you’ll have to pay business taxes under an LLC-corporate combination. With that, you may also choose an S corporation classification for your business. This means that your business would gain access to the same pass-through taxation method as an LLC, with additional benefits from the S corp classification.
Choosing an Address
Once you create your business, you have several options when it comes to listing an address. First, you may use a P.O. box if you own a home-based business. You may also use the P.O. Box on business cards and your website. This also allows you to hand out a business mailing address without sacrificing your safety or privacy.
To find out more about address requirements for business, you can post your job on UpCounsel’s website. UpCounsel’s attorneys will give you more information on establishing your business and following the necessary maintenance procedures. Moreover, they will give you the best advice on protecting your privacy as you operate your business.