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Its always better to register your home business. This way, your home business becomes eligible for lot of governmental grants and tax benefits.

Registering also gives you a fair idea of legal tangles involved. You can protect your home business from many future problems if it is registered.

Setting Up a Company.

So you've written all your plans, you've got any financing you need, and you're all ready to set up your company. Uh, wait a minute... how do you do that?

That is the most important question leaving an average Joe confused. Actually, registering your home business is a simple matter and it does not require a lawyer as is generally believed.

However, seeking help from a chartered account is advised to register your home business. This is primarily because, he can can advise you on future tax benefits by evaluating the nature of your business.

The Basics.

A company is an entity, separate from you, that you need to create before you can do business. You decide what type of company it will be, you give it a name, and then you send off all the relevant papers to your government and pay any fees that need to be paid. Even for a one-person home business, it's good to form a company -- it keeps the finances apart, and means that you can sell your company to someone else if you want to. Besides, it might be a legal requirement where you live anyway.

So from seeing from may fronts, it is strongly advised to register your home business. This will not only save you from lot of future headaches, but also help you to give a direction and purpose to your home business.

Before you do anything else, you should send off for the forms you need to start a company -- in the US, for example, you would talk to the SBA (Small Business Administration), while in the UK you would need to get in touch with Companies House. If you're not sure, your local Chamber of Commerce or your lawyer should be able to advise you.

Types of Company.

Many types of companies exists. But it is up to you to decide, under which type your home business must be registered. Your chartered accountant is the best best person to advise you on this after analyzing the nature and scope of your home business.

The chances are that you will want your company to be 'limited', which means that your own liability when it comes to debts and other legal issues is limited to a certain amount, usually the amount that you invested originally. While it is possible to start an 'unlimited' company, it offers no real benefit - it just means that you take far more legal risk.

The choice between 'private' and 'public' companies should be equally easy. A private company can be of any size, and is owned only by the people who started it. A public company, by contrast, is one that can be traded publicly, and may be listed on the stock market -- there will be a high minimum share issue requirement for this type of company that will put it well out of your reach, and formal qualifications may also be required.

So the kind of company you need is very probably a limited liability company, usually abbreviated as 'LLC'.

Legal Requirements.

Before you can start a company, there are a few legal requirements you need to fulfill. You generally need to be over 18 and otherwise permitted to enter into contracts. You must not have been disqualified from being the director of a company, and you also can't be bankrupt.

So far so simple, right? One last sticking point is that you will usually require two people to act as the directors of your company, not just one -- you might have to ask your partner or a lawyer to be another director, or to act as a 'secretary'.

Usually, these simple law terms are explained to you by your accountant. But be aware of the legal tangles involved regarding your home business so as to insulate you from future troubles.

Fee Time.

You're likely to be hit for lots of different fees as you go through the process of setting up your company, but none of them should be too large. There will be a company registration fee, as well as a witnessing fee and perhaps some charges for stationery. You may be able to pay extra to have your company registered more quickly.

Again, your chartered account know all these factors about your home business. He in normally update on different kinds governmental fees involved and fee waivers pertaining to your home business.

An Alternative.

These guys do a total turn-key job of registering your home business. You have no running around to do, no headaches but you will have to pay more to render this kind of services.

If setting up a company sounds like hard work, you'll be relieved to learn that almost all sorts of people offer comprehensive company registration services that don't even cost all that much. Expect to pay about twice as much as the standard do-it-yourself fees, but it's hardly going to break the bank anyway, and it can save you a lot of trouble both now and later on to get things done properly. If this is what you want to do, speak to a lawyer, an accountant, or even a specialized 'company formation agent'.

Your Obligations.

Finally, be aware that from the moment you set up a company, you may have some obligations placed on you. The largest of these is tax reporting, where you will be required to send in a tax report every tax year. Forgetting to deal with tax issues could land you with a fine, so make sure you understand exactly what you've signed up for. You might also be required to do things like putting a small sign with your business' name on the front of your business premises (your house), or to start writing your company registration number on business-related letters you send.

Hope this article has given you direction on going about registering your home business.

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