So now you are a small business owner in Missouri! Congratulations and we are thrilled you are informing yourself about small business insurance. Great start and a move that is ultimately very beneficial to your financial assets and personal peace of mind. There is great information available for the small business owner today and if you haven’t found it yet, let us help lead the way.
Whether you’re operating your small business out of your home, in a rented space or maybe you have a kiosk, in all situations you have personal business property that you have invested in to run your Missouri small business, whether it’s a fiddle, laptop or tabletop. Maybe you own your building and you want to protect it from the elements in the “Mother of the West.” Also a needed coverage regardless of the where you operate your small business is protection from lawsuits. At the very least; customers, vendors and property managers you work with will require proof of insurance because they understand the potential for the unexpected. The Missouri AssureStart Business Owners policy (BOP) has you covered!
If you use vehicles for your small business in Missouri, the law requires that every driver have a reliable method of paying for the costs of damage or injury to another driver after a car accident. Most drivers choose to fulfill this requirement by purchasing Liability Coverage with Uninsured Motorist Coverage. A commercial auto policy can cover multiple drivers and business-use-only vehicles. Some other cases that might require commercial auto insurance: you are transporting products or people, or you want to insure workers that either use your business vehicles or drive their own cars for business purposes. Typically your business assets can be greater than your personal assets, a commercial auto insurance policy will allow for higher limit of liability protection than personal auto.
Speaking of employees, if your small business has employees in the state of Missouri the law requires Workers’ Compensation coverage be provided to all employers of five or more employees and construction industry employers of one or more employees. Workers’ Compensation is elective to partners, sole proprietors, corporations with no more than two owners who are also the only employees, family farm corporations and employers with fewer than five employees. Employers that secure Workers’ Compensation have some important legal protections including immunity from most lawsuits by injured employees. Workers’ Compensation insurance pays medical bills and some lost wages of employees who are injured at work, or who have work-related diseases or illnesses.
Have you grappled with what small business structure to use yet; Sole Proprietor, Corporation, LLC or Partnership? Here is a quick view of the Pros and Cons.
| BUSINESS STRUCTURE | PROS | CONS |
|---|---|---|
| Sole Proprietor | Easy and Inexpensive to Form Complete Control Easy Tax Preparation |
Unlimited Personal Liability Hard to Raise Money You and Your Business are ONE at Tax Time |
| Corporation | Limited Liability Ability to Generate Capital Corporate Tax Treatment Attractive to Potential Employees |
Time and Money Double Taxing if a Dividend is Paid to Shareholders Additional Paperwork |
| S Corporation | Tax Savings Business Expense Tax Credits Independent Life Separate from Shareholders |
Stricter Operational Process Shareholder Compensation Requirements |
| Limited Liability Company (LLC) | Limited Liability Less Recordkeeping Sharing of Profits |
Limited Life Self-Employment Taxes |
| Partnership | Easy and Inexpensive Shared Financial Commitment Complementary Skills Partnership Incentives for Employees |
Joint and Individual Liability Disagreements Among Partners Shared Profits |
In Missouri, if the name you have chosen for your business is anything other than your own personal name, otherwise known as a DBA “Doing Business As” or a “Fictitious” name, then you’ll need to register it with the appropriate local government agency. The legal name of your business is generally required on all government forms and applications, including your application for tax IDs, licenses and permits. At Missouri’s Secretary of State you can Register Businesses.
Some small businesses may be need some form of license or permit to operate legally. The requirements vary by type of business, where it’s located and what rules apply. Find out if your Missouri small business needs a License or Permit at Missouri’s Business Portal, “Your Gateway for business in Missouri” has all the links you need to get going. One other site, if you haven’t found it yet is the U.S. Small Business Administration, which has tons of small business information, it’s a government site so you can’t go wrong.
So does your small business need an Employer Identification Number (EIN), otherwise known as a Federal Employer Identification Number (FEIN) – this is a federal requirement for tax filings. If you have employees, operate your business as a corporation or partnership, file any tax returns for employment, or excise, alcohol, tobacco or firearms your business needs an EIN. Additionally, if you withhold taxes on income, other than wages, paid to a non-resident alien or if you have a Keogh plan your business needs EIN. Here is how to Apply-for-an-EIN.
Small business owners especially new sole proprietors can find a wealth of information covering their federal tax responsibilities at the SB/SE Tax Center which is the IRS page for everything small business!
AssureStart’s products have been approved by the MIssouri Department of Insurance and are underwritten by Midvale Indemnity Company, NAIC 27138, an affiliate of American Family Mutual Insurance Company, 6000 American Parkway, Madison, WI 53783.
