Last month, Daniel Ingersoll joined me on Power of Attorney to discuss the process of starting an Internet business.  As part of that discussion, Daniel outlined a number steps that are often overlooked by new entrepreneurs, who may have a great vision for their fledgling business but lack experience in the logistics of starting a new endeavor.  After forming an entity for the business, Daniel advises that a new entrepreneur:

Apply for a federal taxpayer identification number (EIN).  Daniel advises that this acts as the introduction of the new business to the federal government and the Internal Revenue Service.

Register to do business in foreign jurisditions.  The business entity will be formed in a certain state but must register to do business in all of the other states in which it will do business.  Generally speaking, if a business entity is required to register to do business in a certain state, it will probably have to pay income tax in that state as well.

Register applicable fictitious names.  Many businesses trade under, or are known by, a name other than the formal name of the company.  In such cases, the business must register all of its "nick names" with the appropriate court or agency.

Obtain necessary local, state, and federal licenses.  While most businesses do not require a federal business license, many do require certain local and state licenses to conduct business. Just because a company transacts business exclusively online dos not relieve it of the responsibility to obtain the necessary business licenses.