Getting legal is not that hard. In doing so you are protecting your reputation as a safe place to do business! Todays consummer expect lagitiment companys that have in place, clear Policies and Procedures.
Here are the basics (in the US)
1.) File your Business Name
You need an official business name that’s recognized by your state government. You can do this one of two ways.
A.) Corporation: You can file a corporation with your State. All States in the US have web sites where you can get information on this, and in many cases actually file your business papers online. I have links to the different sites for each State in the Resource Center on my web site, which we'll talk about later.
B.) Fictitious Name (or "DBA"): This is a simpler way to register your business, but it does not afford you the protections that a corporation does. This doesn’t cost as much as a corp. In some States, this is called a DBA (Doing Business As…), and is obtained from your local County Office building for a minimal fee. ($35 would be a good average).
If you’re not sure which way you want to go, ask an attorney or accountant.
2.) Obtain a "Tax ID"
In almost every State you are required to have a Tax ID. Some call it a Sales and Use Tax Certificate, some call it a Seller's Permit, etc. It's the same thing. It allows you to collect Sales Tax on sales you make within your own State. You must again show your Business Entity papers. This is done at the local State Tax Office.
When you buy from a wholesale supplier or distriburter, you will be asked to supply them with a copy of your certificate. They use it as proof to the IRS that they are not required to charge you tax on the products they sell you at wholesale.
3.) Open a Business Bank Account
If you’re going to do business, you must have a business bank account. You’ll need your Business Name papers. Most banks are now offering offer a free business checking.
4.) Open a Merchant Account
The last thing you need is a Merchant Account. You’ll need everything you obtained in the steps above. A Merchant Account allows you to accept credit cards from your online customers and deposits those funds in your business bank account. Without it, you'll get nowhere. Online buyers are instant gratification junkies. They want it NOW! To learn more about a Merchant Account Click Here.
Another added value to your site is to offer Paypal as well as a merchant account. To learn more about PayPal Click Here. | 
