Follow the steps below to set up your online store:
I. Choose the Name:
The name you want to choose must be a commercial, memorable one that represents your brand and is not in use. To verify that the name you want is available you can enter here.
If you have already chosen the name, you must register it with the Department of State of Puerto Rico.
II. Business Legal Structure:
You can make your online store with any legal structure you want. However, each has its advantages and disadvantages for each owner, type of business and structure. The easiest to acquire and with the greatest economic and process advantage is that of the Single Owner or DBA.
It is the simple way to structure your business. The advantages of this structure are its low registration costs and lower legal requirements to start. If you choose this option you are responsible for its debts and in case of a lawsuit you must respond with your personal assets. You can register the business with your name or under a commercial one. If you do not want to completely compromise your name, you can register under "do business as" (DBA) to create the commercial. An example would be Laura’s Beauty Salon or Carlos’s Car Wash.
You have business partners (two or more) that divide the business roles for its operation. Similarly, the profits or losses that the business manages are divided. They can finance business costs together and they can share business burdens. However, being more people there may be different opinions that cause disgust in the process of the operation.
The most common ways to incorporate your business are LLC, C and S corporations:
● LLC: The ‘Limited Liability Company’ (LLC) protects your personal assets and you have less responsibility for business actions. Some of the advantages of making an LLC is that shareholders and owners do not retain any liability for debts unless someone specifically signs an agreement to take such responsibility. Among the disadvantages are higher legal expenses, since S and C corporations have pre-made agreements.
● Corporation C: The owners of this structure are called shareholders and remain protected from liability for the company's actions. Both the corporation and the shareholders pay the taxes separately from the entity. This corporation is one of the most frequent.
● S Corporation: This corporation does not pay taxes, but the profits and losses pass to the shareholders of said corporation and they are responsible for paying these taxes. This option allows small businesses to enjoy the advantages of being treated legally as a corporation, and in turn avoid double taxation.
It is recommended before filling out the documents on your own, consulting with a lawyer or hiring a business incorporation company in Puerto Rico to guide you on the correct legal structure for your business.
i. Employer Identification Number:
● You can request it HERE.
ii. *Merchant registration:
It is the official record maintained by the Department of the Treasury on all the people who have a business in Puerto Rico, no matter its type.
● You can download the Guide we created HERE.
● To register in the Merchants Registry of the Department of the Treasury, access the link: https://suri.hacienda.pr.gov/_/
In the registry you will be asked for the NAICS code. This code is used to classify and quantify economic activity and then record them in statistics and reports. To identify your NAICS code under online sales would be: "e-commerce sales". The numbers that appear are the ones that you will put in the merchant record.
Tip: You must create an account, complete the application and you will have the same merchant registration.
iii. Application for Home Use Permit
iv. Endorsement of Firefighters, Health and Categorical Exclusion
v. Coworking Spaces
vi.. Municipal Patent
For more information about the permissions you can access our blog, written by Jaymarie of Permisos SOS: C66 Blog- Permissions
In the case that you wish to register your trademark or trade name in Puerto Rico to be unique, you can request it from the State Department HERE.
*Merchant registration is obtained once for the owner of the online business that has a general name. Even if you have several e-commerce of different products and names, you need to have several merchant records because they are included under your merchant record.
Name in the merchant register: Carolina Santiago or Carolina Products
Carolina E-commerce Platforms:
● Carolina’s Boutique (clothing sales)
● Garments and more (sale of jewelry stores)
● Puerto Rican Stickers (sale of stickers)
It is extremely important that on your platforms you have an access area where you include the business policies and there you specify who is the person in charge of the page, no matter if you are registered as a DBA or Corporation. This information can be valuable for the customer, since seeing that the person who manages the page is accessible and legitimate can create the necessary confidence to buy.