Starting a business can be daunting, but the process doesn’t have to be. Registering your business is often straightforward once you have selected a name and structure.
The first step is obtaining an employer identification number (EIN), a social security number for your company. Once that’s done, you can start filling out the necessary forms.
Decide on a Business Name
Your business name is a critical element of your business, and it’s a good idea to spend some time thinking about it before you start filling out forms to register. Choosing a business name is a creative endeavor that requires balancing various considerations, including legal guidelines, availability, and the desired image of your new company. What is a business registration? Your business becomes legally recognized when registered, establishing it as a distinct legal entity from its owners. This implies that your company can sign contracts, possess assets, file or defend legal actions under its name, and more.
Your company’s name should be unique so it stands out from competitors and is easily remembered. It should also describe what you do, which can help customers connect with your business.
When you’ve narrowed down your choices, it’s a good idea to run them by friends and family to get their feedback. You should also conduct a search with the United States Patent and Trademark Office and your state’s Department of Corporations or similar agency to ensure that no one else already has the name you want.
Select a Business Structure
Choosing a business structure is one of entrepreneurs’ most important decisions when starting a company. It affects how taxes are filed, how personal assets are protected, and how day-to-day operations are managed.
Different entity types offer varying levels of control and responsibility. For example, a corporation operates as a separate legal entity from its owners and files its tax return. In contrast, an S corporation allows taxes to be “passed through” to the owner and reported on their tax returns.
Depending on the structure chosen, the business may need to register with local or county agencies and obtain licenses and permits. It should also apply for an Employer Identification Number (EIN). This unique nine-digit number is like a social security number for the business and helps establish its legal identity.
Choose a Business Address
In most states, you will need a physical address for your business to complete your business registration and receive important documents like tax forms. While some entrepreneurs may choose to use their home address as the business address, this can lead to privacy concerns, zoning restrictions, and a lack of professionalism when doing business with clients.
Other reasons to consider a business address include:
- Receiving large or odd-sized packages that your mailbox might not fit.
- The ability to put a professional business address on letterhead and other official documents.
- Conveying credibility when building trust with customers.
Many business address options exist, such as virtual mailboxes and coworking spaces, but you must choose one that fits your needs.
Select a Registered Agent
Registering your business makes it a legal entity separate from you and protects your assets in case of any lawsuits. It also provides tax benefits.
The registered agent is the person or company that receives government correspondence and legal documents for your business. The agent is listed on your business registration paperwork and must have a physical address in the state where you are registered to do business.
You can use an individual or a commercial registered agent service. Many better services scan and make digital copies of all papers received, reducing paperwork and hassle. They also offer various pricing plans that fit most budgets. If you plan to expand, You can select a service acting as your agent in multiple states.
Fill Out the Forms
Once you’ve settled on a business name and type, it’s time to complete the forms. The exact requirements will vary by state, but in general, you’ll need to provide information about your business and its owners, plus an address where legal documents can be sent.
Some states also require a registered agent, which is someone who can receive official papers and notices on behalf of the business. You’ll also need to pay any registration fees that apply.
Finally, you’ll need a tax ID and an Employer Identification Number (EIN). This is like a social security number for your business; it helps establish your business’s legal identity and separate its assets from your own. The EIN can be obtained from the IRS.
Pay the Fees
Business registration is common for those hoping to start an LLC or corporation. This step is essential to separating your personal and business assets and providing tax benefits.
Registration costs vary from state to state but are typically minimal. However, this is only one of the expenses that business owners can expect. For example, corporations must pay annual filing and legal and accounting fees associated with their formation.
Depending on your business structure and location, you may also have to register for licenses and permits. To help you determine what you need, try using this free tool from the Small Business Administration. This will give you a list of all the permits and licenses that your company might require.
File the Forms
Once you have your business structure and location determined, it’s time to start the registration process. Depending on your business structure and location, you may be required to register with state agencies or local or county offices. You may also be required to obtain the proper permits and licenses to operate your business.
You will also want to apply for a federal tax ID number or an employer identification number (EIN) if you have employees. This will allow you to file taxes and report your company’s income. This step is usually easy and can be done online. Your EIN is a unique identifier for your company and acts as the equivalent of a Social Security number for your business. It will also help you open a bank account.