Most companies need registration before they can begin operations. The procedure of registering a company differs based on your region and the sort of business. Our key step in starting a company is simple with this guide to business registration.
1. Give Your Company a Name
The first step in registering a company is to come up with a name. One of the most significant tasks in beginning and promoting your company is naming it. Your company name should reflect the personality of your company and appeal to your target market. Use our free business name generator to brainstorm possible names.
Consider registering your company under a “doing business as” (DBA) name. A DBA may be used to brand or rename a company, as well as to replace an existing company name.
Once you’ve settled on a company name, you’ll need to register it in the state where you’ll be doing business.
2. Decide on a Business Structure
Sole proprietorship, partnership, limited liability company (LLC), and corporation are the most popular business formations. Each structure provides differing amounts of personal responsibility protection, tax advantages, and maintenance challenges.
The sole proprietorship
A sole proprietorship is an informal business organization held by one person. Taxes are filed in their name rather than the company’s, and the owner is personally liable for any actions taken against the business.
A partnership is an informal company arrangement held by a group of people. As a result, the business owners are individually accountable for any actions taken against the company and must pay taxes in their own names rather than the company’s name.
A limited liability company (LLC) is a formal legal corporate organization that is owned by its members. An LLC is the most straightforward company structure to establish and operate, offering personal liability protection as well as specific tax advantages.
A corporation is a formal legal company structure owned by shareholders that provides personal liability protection, as well as specific tax advantages and investment potential, but it is more difficult to operate than an LLC.
3. Determine Whether You Need to Register Your Company
In certain circumstances, firms are just needed to register their company name and do not need to register their company. To do business, sole proprietorships, for example, are not needed to register with the state. We suggest visiting the Small Business Administration (SBA) website to learn about the registration procedures for your company.
LLCs and corporations must be registered, but they provide several benefits to company owners, including personal asset protection and tax advantages.
Creating an LLC is quick and straightforward. Personal liability protection is provided by LLCs, which protects your personal assets in the event that your firm suffers a loss. Consider employing an LLC creation provider to make the process of incorporating your LLC even easier.
4. File your taxes
Following that, you must register your new company for both state and federal taxes.
If your company employs or will employ people, you must get a federal Employer Identification Number (EIN). The Internal Revenue Service (IRS) website makes it simple and free to get an EIN. Though an EIN is not essential for all companies, having one provides several advantages worth considering, including preserving your corporate veil, growing company credit, and opening a business bank account.
In addition, you must register for state taxes such as corporate income tax and sales tax. These taxes are not implemented in every state. Do your homework to verify that your company is registered for all necessary taxes. Read our small business sales tax guide to access our sales tax calculator and discover the sales tax guide for your state to learn more.
5. Obtain Licenses and Permits
Finally, you will need to secure the federal and state permissions and licenses necessary to do business. State license and permit requirements will differ based on your location (state, county, and city/town) and industry. The federal license requirements vary greatly depending on the sort of company you run, such as commercial fishing or aircraft.
To operate lawfully, most companies need some kind of state license. Failure to secure the necessary permissions and licenses may result in significant penalties or possibly the shutdown of your firm.
Using our business license search, you may determine which business licenses you need for your company.
Business licensing services may assist you in identifying and fulfilling all licensing needs for your company while avoiding fines. We suggest comparing the top five business licensing services using this handy guide to choose the best one for your company’s requirements.