Service business (miscellaneous)
Anyone conducting business in the State of Missouri under a name other than their own legal name (e.g., John Doe), must register the business name with the Missouri Secretary of State. Missouri law allows businesses to operate under four forms or organization:
- Sole proprietorship
- Partnership – general and limited
- Corporation – C-Corp; S-Corp; Professional, Not-for-Profit; Foreign Corporation
- Limited Liability Company – LLC
Each structure has its own advantages and disadvantages and there are many modifications and variations within these forms. The key to selection revolves around the concept of liability and taxation. You must decide which of these structures best suits your business. In choosing your business structure, consult with a qualified accountant and/or attorney who are familiar with your resources and objectives.
A description of the forms of organization and some of the advantages and disadvantages are discussed in Legal structures and Starting a New Business in Missouri. Choosing a particular structure does not necessarily determine how the business will be taxed.
The Licenses and registration checklist is a guide to help you with the licensing and registration requirements for starting your new business.
You can download forms on the Web at: sos.mo.gov/business/corporations/forms.asp or request them from the Secretary of State’s Office at 573-751-3200.
Understanding the taxes that apply to your business and how to meet the legal requirements of those taxes is critical. Consultation with an accountant or attorney is advisable.
Tax considerations are essential during the formation of a new business and during its entire life. When a business is just starting out, it may have little or no income or assets and the choice of structure may not seriously affect its tax liability. However, as the business grows, the tax implications become more significant.
Doing Business in Missouri: Legal Formation identifies the state and federal forms that must be filed for different business structures and compares the tax liabilities for the most common business structures.
Tax responsibility includes federal, state and local taxes. As a business owner you will be responsible for income taxes, payroll taxes, property tax and other miscellaneous taxes.
Businesses making retail sales must obtain a Missouri Retail Sales License from the Missouri Department of Revenue. A bond, based on projected monthly gross sales is posted at the time of application. An application form (Form 2643) can be obtained from the Dept. of Revenue on the Web at dor.mo.gov/forms or by calling 800-877-6881. Those businesses buying wholesale or operating solely as a wholesaler should complete a Form 149 Sales/Use Tax Exemption Certificate (see: dor.mo.gov/forms/149.pdf) and provide it to their supplier showing the sale is exempt from sales tax.
For more information on taxes and access to printable copies of the required forms visit: Doing Business in Missouri: Taxes.
Obtain a copy of Employer’s tax guide from irs.gov or call 800-829-3676. “Circular E” explains federal tax withholding and Social Security tax requirements for employers as well as containing current withholding tables for you to use to determine how much federal income tax and Social Security tax is to be withheld from each employee’s paycheck.
What is involved?
- Once you begin paying salary or wages to employees, you must collect taxes from your employees. The primary taxes are: federal and state income taxes, Social Security (FICA) and Medicare taxes.
- If you have not already done so, you must apply for a federal employer identification number (EIN), Form SS-4. The EIN number is used to identify your business on payroll and income tax returns, as well as for other federal tax purposes. Corporations and partnerships must file Form SS-4 even if they have no employees.
- Each employee completes an I-9 Employment Eligibility Verification Form and a W-4 form.
- Missouri require that all employers in Missouri report each newly hired employee to the Department of Revenue within 20 calendar days of hire.
For more information on your responsibilities as an employer, please contact your local Missouri Career Center. To locate the nearest office, check the phone book or call 888-728-JOBS (5627) or visit jobs.mo.gov/jobseeker/find-a-career-center.
For a complete discussion on hiring employees, your responsibilities, and access to the required forms, refer to: Doing Business in Missouri: Hiring Employees.
Business resources and guides
You may also find the following information helpful as you begin your business:
- Starting a New Business in Missouri is an excellent publication on the process of starting and operating a business in Missouri.
- Evaluating Your Business Idea is a simple questionnaire-formatted document that helps you think through the elemental considerations in starting a business.
- Guide to Writing a Business Plan provides a short, but thorough introduction to the process of writing a business plan and provides a simple outline of the contents of a standard plan.
- MissouriBusiness.net is a network of key business resource providers in Missouri. The website contains a vast array of helpful documents, links and information on starting and operating your small business as well as a calendar of upcoming training and educational events throughout Missouri. Find a business counselor near you.
- The Missouri Environmental Assistance Center helps businesses improve business efficiency and save money through reducing or eliminating waste understand and navigate the complicated area of environmental permits and regulations. The website offers information on environmental compliance, pollution prevention and energy efficiency.
- Contact your local (county, city, township) government offices early in the planning stages of your business. The requirement for local licenses and permits vary by county and city. Most cities, and some counties, require businesses to be licensed. Check with the city business/merchant license office and/or the county collector’s office for the requirements in your area. Be sure to check with the local city and/or county planning/zoning department to make sure that the site you have selected for your business is zoned to accommodate the activities of your business. These offices can be found in your local phone directory.
- Missouri Lawyer Referral Service (www.mobar.org/LawyerSearch.aspx)
- Kansas City: 816-221-9473 (Clay, Jackson, Platte & Ray counties)
- St. Louis City & County: 314-621-6681
- Springfield/Greene County: 417-831-2783
- Rest of Missouri: 573-636-3635
- Missouri Society of Accountants 800-959-4276 or missouri-accountants.com
- The Missouri Society of CPAs 800-264-7966 or mocpa.org