W06 Reflection

 This week we learned about different Legal Structures and Licensure and Tax requirements for businesses. The different legal structures vary in complexity, from a simple sole proprietorship to LLCs and Corporations. I learned a little bit about all of them, and decided that a Sole Proprietorship or a general partnership would be most appropriate for my situation.

The business I’m starting is very small, and does not require a large amount of money to start it, so I don’t really need investors or shareholders. I could easily run it as a sole proprietorship if I wanted. However, my husband will inevitably help me out with it, and we share all of our income and expenses, so it would make sense for us to enter a partnership. That way we both have equal responsibility and equal share of the profit.

To set up a general partnership business in Idaho, we’d start with choosing a business name and registering our partnership business with the Idaho secretary of state. If unregistered, then the name of the partnership defaults to the last names of the partners. You can also file a name reservation application and hold your business name for four months if you are not ready to register right away. 

Next, we’d make a partnership agreement. This outlines the stakes, profits, and losses, as well as each partner’s role. If a business does not have a partnership agreement, then the company is subject to the default laws of Idaho. General partnerships must also request an Employer Identification Number, if they have employees. We won’t have employees so we don’t need to do that for now. 

If I wanted to do a sole proprietorship instead, then I'd just need to fill out a DBA form with my business name on it, get a city business license from Rexburg, and then make sure to report my business income on my tax form.

Starting a business is more complicated than I thought, mostly because I hadn't really thought about this when doing business online. At the same time, the route to starting a sole proprietorship really isn't that difficult once you understand all the steps. It's just overwhelming at first glance. 

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