How To Set Up Your Fashion Business Legally?
On online platforms, like open marketplaces, you can sign up and open a store in just a few minutes.
That way, you can test your products and the market in no time and the easiest way possible today.
After validating that there are customers for your products and a future for your fashion business, you may decide to get bigger. This is the time you may consider starting a fashion company.
You will need to do some research, online and/or offline, to find out the right information.
But to grow your fashion business, you have a few administrative tasks to do to comply with the regulations of your own country.
There are different types of legal structures, and they may function differently in different countries. In any case, you will need to decide which one applies to your business, and if there are different ones, you should go for the easiest to put in place and handle.
In many countries, when your company is registered, you will get a VAT number that enables you to make invoices and get invoiced too.
To be registered as a company, your business not only needs to choose a legal structure but also a name. That name can be your own name for instance.
If you don’t want to use your own name for your business, but a fictitious name, you will need to register that “brand” name too with the dedicated authorities of your country. This will ensure that no one else can legally use your business name in the sector of activity you have selected.
Business Bank Account
Opening a business bank account is not mandatory when starting a small business, but it’s highly recommended to get a bank account that will be used for business purposes only.
Please keep in mind that most banks will require that you have a registered business name before they allow you to open a bank account under that name.
Here are the benefits:
- You know exactly how much you are making and how much you are spending on your business
- You can easily pay yourself wages to your personal account
- It makes things easier at tax time because every money movement is documented
No need to go into a heavy or costly process to start a fashion company. Many countries do support small businesses, and you will be able to set it up quite light until your business is robust enough.
However, If you feel more comfortable doing so, you can get legal help on how to set up your business from scratch, which also may be more useful for some countries than others, depending on their regulations.
The authorities of your country can guide you on the processes and on where to find the help you need.
When your business gets bigger, you may need to get external support on a regular basis, like an accountant and/or a lawyer, to ensure your business stays compliant.
But at first, you can go through the legal set up yourselves as many things can now be done online.
Let us know in the comments in which country you are starting your fashion business. We are eager to know where in the world fashion is made by new fashion designers!
This article is about the 9th step of our essential guide for aspiring fashion designers called: 10 Steps To Success – How to start and grow your fashion business. If you would like to know the 10 steps to make it in the fashion business, you can download that guide for free here.
(Photos from Unsplash: Sebastian Pichler, Igor Ovsyannykov, Rawpixel.com).
P.S. FashionTalents is an open marketplace where you create your fashion business in minutes.
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Fanny is the CEO + Co-founder of Fashion Talents, and a passionate and tireless promoter of new fashion designers. She’s on a mission to open fashion business to all talents around the world and drive shoppers, sales, and success to them.