The steps to register your business include choosing a name, structure, and other basics before you’re officially in business. Most small businesses must register with local and state officials. Many also get a federal tax ID, trademark protection, and tax-exempt status.
Requirements vary, but smart choices can offer liability protection and other legal, tax, and personal incentives. Small Business Administration (SBA) counselors can guide you. When you learn the basics, and follow the steps below, you’ll be closer to a real or virtual ribbon-cutting celebration for your new business!
How to register a business: 4 steps to success
Acknowledge Him in all your ways, and He will make your paths straight.
[Proverbs 3:5-6 (NET)]
It’s often said that God writes straight with crooked lines. Business registration is the beginning of an exciting journey. Even the best plans can veer off-course – that’s part of the adventure! At times, your paths may look more like the zigzags of a toddler’s drawing than the tidy trajectory you envisioned.
When you turn to the Lord in prayer for every decision, you’re never alone. He’ll guide you toward the right people, places, and paths. Expect interesting detours along the way! All entrepreneurs experience successes and setbacks. Great leaders consider it an opportunity to learn and grow while serving the Lord and His people.
Step 1: Check and protect your business name
Is your business name available? If it’s trademarked or in use by others in your area or industry, you may need a different name. However, trademarked names might still be available if they aren’t in a competing industry. Ask an attorney about trademarks and business name protections, including:
- Domain name registration – Search online and check with domain-name registrars to see if the website you want is available. If so, they’ll register it for nominal, renewable fees. Web addresses needn’t match business names, but both should be simple and descriptive. Names that are easy to say, spell, type, and remember help build your brand and traffic.
• Business name registration – Check with the SBA for federal and state registration steps and other details. Your state’s Secretary of State office can help.
• Trademark business name registration – Learn trademark basics, including how to search and apply for trademarks to get protection for names, products, and services.
• Doing Business As (DBA) – If you use a DBA (trade, fictitious, or assumed name), there may be municipality, county, and/or state DBA registration requirements.
Step 2: Choose your location and business structure
When you register your business, select a physical address for tax, banking, government-agency communications, and other mail and business purposes. Before registering, select a legal business structure. This affects operations, tax obligations, your level of personal liability, and more.
Common business structures include:
- Sole proprietorship – If you don’t select a structure, your business is a sole proprietorship. You’ll file taxes under your Social Security or Employer Identification Number (EIN). Personal and business revenues and liabilities aren’t separate.
- Partnership – One or more partners can share ownership. Liability protection depends on the type, such as limited partnership (LP) or limited liability partnership (LLP). Partnerships can offer tax incentives, a chance to pool resources, and other advantages.
- Corporations – A corporation is independent and legally separate from its owners. It can provide strong personal liability protection, but regulatory and tax requirements are complex. If you want shareholders and have business expansion plans, consider a corporate structure.
- Limited Liability Company (LLC) – This combines partnership and corporation features. It helps protect personal assets from business liabilities. LLCs distribute profits and losses to shareholders.
Laws and processes can change, with differences from state to state. Consult an attorney and learn about business structures.
“Trust in the Lord with all your heart and lean not on your own understanding; in all your ways submit to him, and he will make your paths straight.” Proverbs 3:5-6 (NIV)
Step 3: Register your business with the IRS
Most businesses need an EIN for taxes. This nine-digit business ID also helps with business registration, business bank accounts, building credit, and more.
Even if your business structure doesn’t require an EIN, it can help separate personal and business finances. An EIN differentiates businesses from hobbies. It can simplify accounting, limit legal liabilities, and help prevent identity theft.
Step 4: Get licensing and permits
From food sales, childcare, and personal services to landscaping and construction, industry licensing and permit requirements vary widely. If you have payroll, you may also need to register with local and state revenue offices. Learn more about license and permit applications.
Questions? Ask the business start-up pros!
You’ll have a few hurdles to clear before opening day draws near. For support, consider one-to-one business counseling, free business classes, and more from start-up specialists such as:
- SBA local
- SCORE (volunteer small business mentors)
- Small Business Development Centers (SBDCs)
- State resources for starting a business
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