Do you need a business license to run a social media marketing service? Here are 10 important documents you need for your social media marketing business. The answer is No! Almost every state in the United States does not require business license for social media marketing, though you may need some general licenses and permits if you are looking to have a commercial business location or offer full agency services.
But since most people start this business at home with just a computer, Wi-Fi, and small advertising budget, and this makes it is possible to start this business without a business license. Note that if you are going to start-up with a commercial business office and offer full agency services, then you will have to set up your marketing agency legally, especially if you want to make your business legitimate.
A few documents are all you need to set up your social marketing agency legally, which will help protect your business and make things easier with the government, clients, and employees. Note that these documents are necessary requirements to run a business in the United States, so it’s important to get them done. In order for your social media marketing service to be recognized as a business by the government, here are few documents you need to acquire in the United States.
10 Important Documents Needed for a Social Media Marketing Business
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1. Certificate of Incorporation
A certificate of incorporation is a document that makes your business a legal entity, which is almost always filed with the state in which you reside. Sometimes, you’ll need to file locally (with your county) and the cost of doing this will vary depending on where you are. This is a very basic form and it can be filed online in most states.
The certificate of incorporation is expected to include the name of your business, your registered facility, the name of a registered agent, and a statement of issuable stocks. These stocks in most marketing agencies will be given 100% to you or divided evenly between your partners. These stocks are used to determine equity.
If you choose to register your business as an LLC, then you need an operating agreement because it outlines the ownership of a business. When you’re looking how to set up your social media marketing agency for the first time, this is often easier as you’re likely to be a sole proprietor. You might be able to skip this step, but it is required for businesses in California, Delaware, Maine, Missouri, Nebraska, and New York. Also note that you will want this for protection if you are a sole proprietor.
A Doing Business As (DBA) License gives you the opportunity to run your social media marketing business under a name other than your own. A DBA is not mandatory, but since it fulfills some requirements for opening a business bank account and enforcing any necessary contracts, it’s something you have to consider getting. If you would like to register for a DBA, you must file with your county or state.
Your Tax ID number or EIN (employee identification number) is a nine-digit number that is designated for your company when you register with the IRS. This number will be needed when filing an income tax return or payroll return, and it also helps in handling business financials such as loans and credit cards. The application process for an EIN is free, and can be done on the IRS’ website.
6. Home Occupation Permit
Most small social media marketing agencies are started and operated from homes. This allows business owners to avoid licenses and permits that come with commercial properties, but it doesn’t exempt them from all licenses.
Note that filing for a Home Occupation Permit ensures that your neighbourhood is zoned for home business activity—that is, your business is not adding additional or unnecessary traffic or noise to the community. It is advisable you check with your city’s government website for instructions on how to apply for a Home Occupation Permit in your area.
7. Consulting Agreement
This agreement is a contract between a client and a business. A consulting agreement helps set the terms of the agreement between the two and make them legally enforceable. Even though implied contracts are enough for some states, you need an actual contract to have a standing in most US courts.
A Non-Disclosure Agreement, or NDA, outlines the information that you are giving to a client. Note that this agreement can protect your methodology and any issues that the business might not want to tell you about. This document can be unilateral – where one party agrees to the NDA – or mutual, where both parties agree not to trade information.
As a social media marketing agency, there are two kinds of business insurance that you need to consider. The first is a professional liability, which protects you from a client saying that you were negligent. Note that this is most relevant in the marketing industry. General liability insurance protects you in a situation that you are sued for bodily harm or damage to property. You can get business insurance by registering with a broker.
Have it in mind that trademarks protect intellectual property like your brand name, slogan, and logo. At any moment you create something unique and important to your business, you should file a trademark. Copyright protects your original creations, giving you sole right to their reproduction. There are copyright rules for social media, but it mostly falls under “make sure you own it or know who does.”
If you want to file a trademark or copyright claims, you should speak with a specialized lawyer. There may be even more licenses and permits that may pertain to your social media marketing business. Always check with your state and local jurisdictions to make sure you have every license and permit required to operate before you open for business so you can avoid unnecessary fines or notices.