Starting a business can be rewarding, both personally and financially, but it can also be risky. Instead, it’s a way of getting funding not from potential co-owners, but from potential fans and customers who want to support the business idea, but not necessarily own it. What you give donors in exchange is entirely up to you – and typically, people will come away with early access to a product, or a special version of a product, or a meet-and-greet with the founders.
Despite this, a small percentage mature into stable small- to mid-sized businesses, while a microscopic fraction becomes the stuff of legends – like Apple or Hewlett-Packard, companies born in garages that ultimately ascended to the highest ranks of American business.
Some founders can finance their business entirely on their own dime or through friends and family, which is called bootstrapping.” This obviously gives the business owners a ton of flexibility for running the business, although it means taking on a larger financial risk – and when family’s involved, can lead to awkward holiday dinner conversations if things go wrong.
But even if you don’t need an EIN, get one anyway: It’s free, takes minutes, and you can keep your Social Security number private and reduce the chance of identity theft, because if you don’t have an EIN, your SSN identifies your business for tax purposes.
If the business will operate as a corporation, limited partnership, or limited liability company, and the business will be identified by a name other than the name on file with the Secretary of State, an Assumed Name Certificate must be filed with the Secretary of State and each county in which the business will have a registered or principal office.