Frequently Asked
Questions
Where can I get federal and state tax identification numbers?
Sole proprietorships without employees can use the proprietor's
social security number as a business identification number. It may, however, be
advantageous for a sole proprietorship to have an EIN number.
Partnerships and
corporations with or without employees, and sole proprietors with employees,
must obtain an Employer Identification Number (EIN) (Form SS-4) from the IRS.
The form can be obtained from the IRS at
www.irs.gov or 800-392-6089.
Partnerships and
corporations with or without employees, and sole proprietors with employees,
must register their business with the Department of Revenue. This can only be
done online by going to www.mass.gov and
registering as a new business. Further information can be obtained at
Massachusetts Department of Revenue's website at
www.mass.gov/dor.
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What
is a DBA Certificate and where do I get one?
A business certificate is the registration of a business. It is commonly referred to as a "
DBA" or "Doing Business As" certificate. Its purpose is primarily for consumer protection and public information. Essentially, it creates a public record of the name and address of the owner of a business.
Massachusetts General Laws Chapter 110, §5 states that any person conducting business under any title or business name other than the real name of the person conducting the business must file a
certificate. A person is defined as an individual, a partnership, or a corporation.
Forms for filing are available in the town clerk’s office where the business
is to be located.
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How
do I become a government supplier?
Through the
MSBDC Procurement Technical Assistance Center (PTAC), clients subscribe to a free bid-matching service, which informs them daily of federal, state and municipal bidding opportunities matching their specific product and service profiles. After identifying a specific bid, clients may draw on a wealth of technical assistance to prepare their proposals. If
successful, PTAC provides assistance in post-award contract administration.
Visit PTAC's website at www.msbdc.org/ptac.
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What taxes are required for my business?
Once you start your business, you will have to start paying certain taxes to both the federal government and the Commonwealth of Massachusetts. The specific taxes you are required to pay or remit depend on your type of business.
The Massachusetts Department of Revenue provides a comprehensive online guide,
Guide
to Massachusetts Tax and Employer Obligations, and also offers small
business workshops.
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How
do I register my business name?
An
individual or entity may register the business name, trademark or service mark
with the Massachusetts Secretary of State's Office. A form may be obtained by
calling (617) 727-2850. The completed form, along with the $50 filing fee,
should be sent to the Secretary of
State’s Office in Boston. Trademarks and service marks are renewable every
ten years.
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Once
I’ve chosen the name for my business, how do I find out if anyone else is
using it?
The Secretary of State’s office will do
a name search for Massachusetts only. For further information, visit
www.mass.gov/sec/cor or call 617-727-2850.
You can also contact Leonard Adams, Reference/Liaison Librarian for Federal
and Massachusetts Government Publications and Patents at the University of
Massachusetts, at 413-545-2765 or
len.adams@library.umass.edu.
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What
is a corporation?
A
corporation is a separate legal entity that exists under the authority granted
by state law. A corporation has substantially all of the legal rights of an
individual and is responsible for its own debts .It must also file income tax
returns and pay taxes on income it derives from its operations. Typically, the
owners or shareholders of a corporation are protected from the liabilities of
the business. However, when a corporation is small, creditors often require
personal guarantees of the principal owners before extending credit. The legal
protection afforded the owners of a corporation can far outweigh the additional
expense of starting and administering a corporation.
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How
do I obtain health insurance?
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Will
the MSBDC write my business plan for me?
While
the MSBDC will not write your business plan for you, we will provide the guidance
needed to write the plan and can help fine-tune your plan.
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How
much money will I need to start a business?
Writing
the business plan is a good way to determine the answer to this question. The
detailed analysis of expenses and income will enable you to test the feasibility
of the business, the breakeven point, and the potential profitability of the
business before making a financial commitment.
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What
insurance should I carry for my business?
An important aspect of your business is a
well-planned insurance program. Types of insurance you should consider are:
Property
Insurance
Liability
Insurance
Product
Liability Insurance
Automobile
Insurance
Workers’
Compensation |
Disability
Insurance
Business
Interruption Insurance
Health
Insurance
Life
Insurance
|
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Can
you help me obtain small business grants?
Unfortunately, for most
companies in Massachusetts, there are no small business grants. That is, there
are no grants available for start up costs, operating or other typical small
business expenses for companies which are not “non-profit” or charitable
organizations. Most grants are given by foundations or government agencies to
provide money for charitable or social purposes and they are typically only
given to organizations which have specific “non-profit” status [typically
501(c)(3)]. This automatically excludes the majority of businesses which are
operated for a profit, regardless of race or gender.
However, there are two
exceptions for specific grants for which a small business could be eligible. The
first is called an SBIR or Small Business Innovative Research grant. To qualify
for this type of grant a small business needs to have a unique technology which
an agency of the government has an interest in developing through advanced
research. This program requires a company to have qualified academic researchers
and industry experts on its staff. Additional information on SBIR can be found
at www.sba.gov/sbir.
The second type of grant is
a Workforce Training Grant. This grant is available to existing small businesses
that need to train their workforce to better perform their jobs. It is a
fifty-fifty match between funds that the company puts up and funds that are
available from the Commonwealth of Massachusetts. Additional information on
Workforce Training grants can be found at
www.detma.org/WorkforceHome.htm.
There are other agencies that
also offer grants. For Massachusetts grants, go to
www.mass.gov and type 'grants' in the search field, then select the quick
link for grants and funding. For non-profit organizations, grant information is
available in the library section of the Associated Grant Makers' website at
www.agmconnect.org. To learn about
federal grants, go to the U.S. Small Business Administration's website at
www.sba.gov/expanding/grants.html.
The U.S. Small Business
Administration (SBA) does not offer grants or free money to start
or expand small businesses. Although there are some grants available, they
generally are targeted towards specific groups, types of organizations or
activities. SBA does offer a wide variety of loan programs (visit
www.sba.gov/financing for more
information).
Financing for a small
business can often be a confusing and difficult process. The MSBDC can provide
valuable information that will dispel many of the myths about free money and
grants, and help individuals position themselves to start or grow a successful
small business in Massachusetts. For additional information on the process of
financing, contact the nearest MSBDC office to schedule an appointment.
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I'm
thinking of buying a business.
How do I know if it's overpriced and if
I
can earn a living at this?
Get
copies of the seller's tax records for the last three years, details of the sale
and meet with an MSBDC counselor as soon as possible. The
counselor can
help you value the business and look at how the expenses may change under
your management.
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Produced and maintained by the Massachusetts
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