Then the municipal inspector calls and tells you your sign is illegal and, by the way, have you got a business licence? Actually you need three for your three areas of activity. The telephone company calls and tells you you can't use your private phone line for business. Someone tells you you absolutely have to incorporate right away or you could lose your house. The tax authorities call and wonder why you haven't got a company number for the pension account of your employees and where have you been paying the unemployment insurance premiums? Have you registered the company name you're using — is it copyrighted? Who can legally sign for your company? The bank wants a business plan. They say the plan you submitted isn't a business plan. Mastercard won't activate your account until you post a bond. The sales tax you collect is going into the wrong account. Receipts are piling up in boxes and you have no idea how to do next year's income tax.
It seems that, as soon as you go into business for yourself, there are all kinds of legalities that crop up. Even worse, they depend very much on where you are doing business. Luckily, most of the rules are set up so that a reasonably careful and conscientious person can work within the structures without too much of a problem. After all, look around you. All these people are doing it.
The important thing is not to get carried away. Talk to lots of people in the same kind of business and find out what everyone is doing. You're going to get lots of people telling you that you absolutely have to incorporate, register, file etc. but you don't. Do it when you're convinced that it is necessary for your business. Here is a great reference for legal questions but use it sparingly.
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