Starting Your Own Business or Non-Profit

Find out how to start your own business and avoid fraud.

Start a Business

Starting a business is an exciting opportunity, but it's also an incredibly challenging undertaking. To guide you through the aspects of starting a business and finding information to help you succeed, there are various federal resources available.

U.S. Small Business Administration (SBA)

If you're starting your own business, you will need to plan, make key financial decisions, and complete a series of legal activities. Your local SBA Office can help you:

You can also get business advice from experienced executives through SCORE, a non-profit resource partner of the SBA.

Internal Revenue Service (IRS)

The IRS provides federal tax information for people starting a business, as well as information to assist in making basic business decisions. Read the IRS Checklist to Start a Business for information on the basic steps you should follow to start a business.

Each state has additional requirements to start and operate a business. For links to information regarding state-level requirements for starting a business, refer to the IRS State Government Websites directory.

Federal Trade Commission (FTC)

The FTC's Business Center gives your business the tools to understand and comply with consumer protection laws. It covers several important areas:

  • Advertising and Marketing. Under the law, any claims in advertisements made by a business must be truthful, cannot be deceptive or unfair, and must be evidence-based.
  • Credit and Finance. Businesses that extend credit to consumers, are in the business of offering loans, or help companies that do, have compliance responsibilities.
  • Privacy and Security.  Businesses must protect sensitive data and be clear about their information-sharing practices.
  • Selected Industries.  Stay up to date with the rules and laws of various industries.

Resources for Military Veterans

  • Register your business to be eligible for special purchasing opportunities at VetBiz.gov.
  • Visit the Office of Veterans Business Development. Its mission is to maximize the availability, applicability and usability of all administration small business programs for Veterans, Service-Disabled Veterans, Reserve Component Members, and their Dependents or Survivors.

Resources for Minorities

A variety of programs and services are available for minority business owners from the Minority Business Development Agency.

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Start a Nonprofit

A nonprofit organization commonly performs some type of public or community benefit, without the purpose of making a profit. The tips below will help you find important information and services for starting a nonprofit. 

Types of Nonprofits

There are various categories of nonprofits recognized by the Internal Revenue Service (IRS): 

Each category has different tax benefits yet is required to comply with different restrictions. While the majority of nonprofits are classified under 501(c)(3) of the IRS Code as charitable organizations, you should review the categories to determine the right choice for your nonprofit organization.

Incorporating a Nonprofit

This process is very similar to creating a regular corporation except that you have to take the extra steps of applying for tax-exempt status with the IRS and their state tax division. These are the steps you should take to incorporate your nonprofit:

  • Choose a business name.  Make sure to check the state-by-state information on the various laws that apply to naming a nonprofit in your state.
  • File your incorporation paperwork. You must next file formal paperwork, or articles of incorporation, and pay a small filing fee to your state. Look up your state office through the National Association of State Charity Officials (NASCO).  
  • Apply for nonprofit federal and state tax exemptions. A nonprofit organization may be eligible for exemption from federal income tax. The IRS provides guidance and instructions on applying for tax-exempt status
  • Create corporate bylaws. These are the operating rules for your nonprofit.
  • Appoint initial directors and hold your first board meeting. Some states require that you appoint directors before filing your articles of incorporation.
  • Obtain necessary licenses and permits. Does your nonprofit have all the licenses and permits needed to comply with federal, state, and local rules?

Grants, Loans, and Other Assistance

While individual donors make up the largest contributors to nonprofit organizations, federal, state and local governments offer grants, loans and programs to support funding.

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Pyramid Schemes

A pyramid scheme, also known as Ponzi scheme, is an illegal form of multilevel marketing. In these programs, your ability to earn profits is based on the number of new participants you recruit, instead of the amount of products or services you sell. Sometimes there actually aren't any real products that are being sold. These types of schemes are common with investment and independent direct selling opportunities.

These schemes rely on the income from new participants in order to pay fake "profits" to people that have been part of the scheme for longer amounts of time. However, the scheme falls apart when there aren't enough new recruits to pay into the system, so the earlier participants no longer receive earnings.

Tips to Avoid Being a Victim

You can take steps to prevent yourself from getting involved in a pyramid scheme:

  • Be wary of "opportunities" to invest your money in franchises or investments that require you to bring in more investors to increase your profit, or recoup your initial investment.
  • Independently verify the legitimacy of any franchise or investment with the Bettter Business Bureau, your state Attorney General, or any licensing agencies.
  • Be skeptical of success stories and testimonials of fantastic earnings.

File a Complaint

If you've been the victim of a pyramid scheme, contact your state consumer protection office, state Attorney General, or the Better Business Bureau (BBB) to file a complaint. If the pyramid scheme involved securities, you should also file a complaint with your state's securities administrator, or the Securities and Exchange Commission.

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Self-Employed Resources

Generally you are a self-employed individual if any of the following apply to you:

  • You handle a trade or business as a sole proprietor or independent contractor.
  • You are a member of a partnership that carries on a trade or business.
  • You are otherwise in business for yourself (including a part-time business).

As an individual conducting your own business, there are resources that are available to guide you in the small business world.

Internal Revenue Service (IRS)

The Self-Employed Individuals Tax Center provides information on the basics of self-employment, filing requirements, and reporting responsibilities for independent contractors. It is a part of the Small Business and Self-Employed Tax Center.

Small Business Administration (SBA)

Find information on starting a business, financing a business, and tax information for the self-employed.

Social Security Administration (SSA)

Learn how to report your earnings, download Social Security Information for the Self-Employed.  

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Work From Home

Home-Based Business

If you want to start your own home-based business, the Small Business Administration (SBA) offers a guide for home-based businesses. This guide includes start-up resources, tax information, and information about buying a home-based franchise.

Home Office Deduction

If you use a portion of your home for business, you may be able to take a home office tax deduction.

Work-at-Home Scams

Learn what to look for in work-at-home scams. To file a complaint about a scam, contact the Federal Trade Commission (FTC).

Note: The federal government never charges a fee for information about, or applications for, government jobs. You can search and apply for federal government jobs for free on USAJOBS.gov.

Federal Government Telework Guidelines

If you are looking for information on teleworking in the federal government, visit www.telework.gov

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