Unless your new business is a one-person shop, you will need to hire others to perform services for your business.
When you hire employees for your business, you must comply with a host of applicable federal and state laws and regulations. For example, you will need to obtain a federal level Employer Identification Number (EIN) (also referred to as a Federal Tax Identification Number) and certain state level identification numbers. You will need to complete and maintain various forms and records in connection with the hiring process, including tax withholding forms and work eligibility verification records.
Employee or Independent Contractor?
A vital decision for any business, whether new or established, is making the proper determination of whether to treat a worker as an “employee” or as an “independent contractor.” If an independent contractor is later found to be an “employee” for federal and/or state law purposes, your company may face serious financial consequences.
Please review our Employee or Independent Contractor? page for more details.
Many start-up companies use equity incentives to compensate, recruit and retain executives and employees. Equity compensation, typically in the form of restricted stock or stock options, serves to align the interests of employees and stockholders, as it incents employees to contribute to the long-term growth of a company without depleting a company’s cash resources.