State Restrictions, Jurisdiction, and Authority Varies In All 50 States

Each state has its own start-up requirements for corporations and it is each business owner’s responsibility to identify which regulations apply in their jurisdiction.  There may be different laws on filing organizational papers, taxes, licensing procedures, as well as environmental regulations which may require special permits, especially if disposing of dangerous or chemical waste, liquid waste or through air vents.

Professional licensure may vary from state-to-state for nurses, physicians, attorneys, accountants, teachers, engineers, architects, auto mechanics, realtors etc.  In some professions a license is granted to the business, while in others licensing must be obtained by each individual.  Nurses, for example, can be licensed in one state and have to pass another board exam upon moving to another state. 

Key components of licensing are hands on training in the field, passing a written exam, and sometimes apprenticing is necessary initially.  Some licenses have time restrictions.

Licenses can also be required for certain products or services as well.  Sales permits and taxes can vary in different states for goods sold.  Services are only taxable in some states.

Registration with the Department of Revenue for business taxes is required in some states.  Corporations are required to file organizational papers with the Secretary of State or a similar office.  On the other hand, a sole proprietor or partnership may not have to file with the state.  All this must be researched in your jurisdiction. 

Each employer must register with their state Department of Labor for unemployment compensation and workers compensation.  Certain corporations are required to meet health and safety regulations in their state, similar to OSHA. 

An employer must meet their state and federal tax requirements for employees.  They must obtain an EIN number from their state and withhold both income and employment taxes from all employees. (Social Security/Medicare or FICA).  Sometimes disability insurance must also be withheld.  Withholding tax must be paid to their tax authorities.  All figures must be reported to the state, IRS as well as the employee.  The employer must issue an annual 1099 form to all independent contractors, giving a copy to them as well as the government.