3:57 PM
Lanee' Blunt
By Lanee' Blunt
Setting up your restaurant in the right location and having good food you have a good chance of success. There are a couple of choices that you can choose from to open a restaurant: a LLC or a sole proprietorship. To obtain a LLC or sole proprietorship a restaurant must apply with their own state’s license department. Owning a restaurant is a good business opportunity and can provide a family oriented environment. It is hard work once you get your restaurant up and running but it is a rewarding business.
Things you’ll need
Business address
Photo ID
Food service license
Difficulty
Moderately easy
Sole Proprietorship:
Acquire a food service license. A restaurant must have a food service license to do business in your state. This does apply if you are a fixed or mobile restaurant, coffee shop, cafeteria, short order café, etc. A restaurant must have a sales tax license. You may call your state’s taxation office.
Apply for a sole proprietorship. If your restaurant is going to have a name other than your own you will need a “doing business as” (DBA). You will have the Apply for a DBA. You have to file a “fictitious name” or “Doing Business As” (DBA) registration form. In some states, you have to register a DBA with the state government or the county clerk’s office. You will need your driver’s license or state ID card with your application. Legal title to the assets of the restaurant is yours the liabilities and the equity of the restaurant are part of your net worth. You will have full risk as a sole proprietorship, if a customer suffers a hot coffee spill in your restaurant they can come after your personal liability.
Apply for an employee identification number (EIN) with the federal government. Fill-out the necessary forms and send them back to the federal government and they will return it to you with your EIN number. As a sole proprietorship when you hire employees you need to use the EIN.
Limited Liability
Setting up a Limited Liability Company (LLC) for your restaurant is another way to open. Setting up your LLC is done by applying with your own state. SBA.gov will navigate you to the proper state where you can apply for the LLC. In an LLC you have limited personal liability for the debts and actions of the restaurant.
Mail your application. If you mail the application instead of handing it in person, you will need to include a photocopy of each driver’s license or state ID card with the application.
Tips
In some states you may apply online or download an application to mail it back.
LLC limits your personal liability and they are simpler to form than corporations.
Resources
Entrepreneur: How to Start a Restaurant
IRS: Limited Liability Company
Posted in: Start Up
