Detailed Guide To Registering A Business: Register Your Business with Ease

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Step By Step Guide To Registering A Business in the U.S.

So, you’re prepared to register your business but you’re confused about the right steps to take, which agencies to meet, and the overall process to get it done. Well, the process is straightforward and not as difficult as you may think once you have all the information you need.

That’s why this article shows you all you need to know, including a step-by-step process of registering a business, the requirements based on business structure, and more.

What are the Steps to Registering Your Business?

Registering a business in the U.S. involves several simple steps to ensure your venture is legally compliant and set up for success. Here’s a list to guide you through the process:

  • Determine Your Business Structure
  • Select a Business Name
  • Register Your Chosen Business Name
  • Get an Employer Identification Number (EIN)
  • Register with State and Local Authorities
  • Apply for Required Permits and Licenses
  • Set Up a Business Bank Account
  • Ensure Ongoing Regulatory Compliance

We’ll expand each step further to help you understand what each process entails if you want to start a new business in the US.

Determine Your Business Structure

The first step in registering your business is to choose the appropriate legal structure. This decision is the foundation of your business and is crucial as the structure you choose affects your taxes, business liability, and the level of control you have over the business.

There are different types of business structures in the U.S. and they include:

Sole Proprietorship

This structure is more common for small businesses. It’s owned and operated by one individual, and there’s no legal distinction between the owner and the business. While this means you have complete control, it also means you’re personally liable for all business debts and obligations.

Partnership

There are two types of partnerships—general and limited. A general partnership is a business where all partners share management responsibilities and liability. In a limited liability partnership, there are both general and limited partners, with the latter typically only investing money and having limited liability.

Partnerships are relatively easy to form and offer shared responsibility, but they can lead to disputes and require a solid partnership agreement.

Limited Liability Company (LLC)

An LLC offers liability protection, tax benefits, and flexibility. Owners are usually shareholders and are not personally liable for the company’s debts. LLCs are popular among small to medium-sized businesses due to their flexible management structure and relatively simple compliance requirements.

Corporation

These are divided into two; C corporations and S corporations. A C corporation is a separate legal entity from its owners. However, it is subject to double taxation (once on business profits and again on shareholder dividends).

An S corporation allows profits and losses to be passed through to shareholders’ personal tax returns, avoiding double taxation.

There are other less common business structures like professional corporations (PCs), nonprofit corporations, cooperatives (Co-ops), and benefit corporations (B Corps).

Important note: Note that the choice of business structure can depend significantly on the type of business. Different business structures offer different advantages and disadvantages that can be more or less suitable depending on the nature, scale, and goals of the particular business

Decide on a Business Name

Once you’ve chosen your business structure, the next step is naming your business. This legal name is not only a key part of your brand identity but also legally significant.

Take the time to research and ensure that your chosen name is legally available, brand-appropriate, and can be easily found online.

  • Brainstorm Ideas
  • Check Availability: You can check this through your state’s business filing office or website. Additionally, conduct a search for the name on the U.S. Patent and Trademark Office (USPTO) database to see if it’s already trademarked.
  • Domain Name Search: Check if the domain name that matches your business name is available and consider securing it.
  • Social Media Handles: Check the availability of your business name on major social media platforms for consistent branding.
  • Legal Considerations: Certain words may be restricted or require additional documentation if they imply a professional designation (like “bank” or “law”).

Case study: Understand that the name you choose could potentially result in a lawsuit, as other companies may be trying to protect their brands. For example, in 2003, Starbucks sued Sambuck’s Coffee, a small Oregon coffee shop owned by Samantha Buck, for trademark infringement, claiming the name was too similar and could confuse customers.

The court ruled in favor of Starbucks in 2006, determining that the name Sambuck’s Coffee diluted the Starbucks brand. Consequently, Samantha Buck was ordered to rebrand her business, which she renamed Sam’s Bait and Tackle.

Register Your Business Name

After deciding on a business name, the next step is to register it to ensure your business is legally recognized and to protect your brand. You’ll be able to do that in the following 5 steps:

1. Check Name Availability

Search your state’s business filing office or website to verify that no other business is using the same name. Additionally, check the U.S. Patent and Trademark Office (USPTO) database to see if the name is already trademarked.

2. Register the Name with the State

If you are forming an LLC or a corporation, you will register your business name when you file your formation documents with the state. For sole proprietorships and partnerships, you need to file a “Doing Business As” (DBA) name with your county or state government.

3. Trademark Your Business Name

While state registration provides some level of protection, consider applying for a federal trademark through the USPTO. This provides nationwide protection and prevents others from using a similar name in any state.

4. Domain Name Registration

Secure your business name as a domain name to establish your online presence. Even if you’re not ready to create a website, owning the domain ensures that it’s available when you need it.

5. Register with Local Authorities

Depending on your business location and business structure, you might also need to register your business name with local city or county authorities. The requirements for this one will vary depending on your state, so check with your local government for additional registration requirements.

This process ensures that your business operates under a unique name and prevents potential legal issues related to name disputes.

Obtain an Employer Identification Number (EIN)

The next step is to register with the federal government by obtaining an EIN (Employer Identification Number). An EIN, also known as a Federal Tax ID Number, is like a social security number for your business and is crucial before you can start your business.

It is issued by the Internal Revenue Service (IRS) and is used to identify a business entity for tax purposes. Here’s how to obtain an EIN:

Determine If You Need an EIN

You are required to register and obtain an EIN if you have employees, operate as a corporation or partnership, file employment, excise, or alcohol, tobacco and firearms taxes, withhold taxes on income (other than wages) paid to a non-resident alien, or have a Keogh plan.

International Applicants

If you are an international applicant without a legal residence or primary place of business in the U.S., you can apply for an EIN by calling the IRS directly. This process involves different steps, and it’s important to follow the specific instructions provided by the IRS.

Use Your EIN

Once you have obtained your EIN, you can use it to open a business bank account, apply for business licenses, file tax returns, and handle other legal and financial matters related to your business.

The EIN simplifies tax reporting, helps maintain separation between personal and business finances, and is necessary for hiring employees and complying with federal regulations.

Register with State Agencies

The next crucial step to register your company is registering with the state. Registering your business with state agencies establishes its legal presence and complies with state regulations.

  • File formation documents to the secretary of state’s office. This typically includes Articles of Organization or Articles of Incorporation, along with the required fees.
  • Obtain necessary permits and licenses
  • Register for state taxes
  • Comply with ongoing requirements

Each state has different requirements and procedures, so it’s important to thoroughly research and understand the registration process applicable to your business.

File for Necessary Business Licenses and Permits

Once you have registered your business with state agencies, the next critical step is to obtain the necessary licenses and permits to operate legally.

  • Identify Required Licenses and Permits
  • Contact Local Government Offices: Reach out to your local city or county government offices, as well as state regulatory agencies, to obtain detailed information about the required licenses and permits.
  • Prepare Application Materials: Gather all required documentation and information needed for each license or permit application.
  • Submit Applications: Complete and submit the license and permit applications to the appropriate government agencies. Ensure that all forms are filled out accurately and include any required fees.
  • Follow-up: Monitor the progress of your applications and respond promptly to any requests for additional information from regulatory agencies.
  • Receive and Display Permits: Once approved, obtain your licenses and permits and display them prominently at your place of business as required by law.

Taking the time to understand and fulfill these regulatory requirements demonstrates your commitment to operating a compliant and reputable business.

Open a Business Bank Account

To start a business in the U.S., you’ll need a bank account specific to your business name unless you’re a sole proprietor, in which case you can use your personal account number.

Opening a business bank account separates your personal and business finances, managing cash flow, and establishing credibility with customers and vendors. Here’s how to get started:

  • Choose a Bank
  • Gather Required Documents
  • Visit the Bank
  • Choose an Account Type such as a checking account, savings account, or a combination of both.
  • Deposit Funds
  • Understand Fees and Policies:

Opening a business bank account facilitates financial management, enhances professionalism, and simplifies tax reporting. It establishes a clear separation between personal and business finances, which is essential for legal and accounting purposes.

Note that when opening a business bank account, your chosen business structure influences the requirements and benefits you’ll encounter:

  • Sole Proprietorship: Requires a Social Security Number (SSN) and a Doing Business As (DBA) certificate. Personal liability and business assets are not separate.
  • Partnership: Needs an EIN and a partnership agreement. Partners share liabilities and profits.
  • Limited Liability Company (LLC): Requires an EIN and Articles of Organization. Provides personal asset protection and flexible tax treatment.
  • Corporation: Needs an EIN and Articles of Incorporation. Offers strong liability protection but requires formalities like shareholder meetings.

Maintain Compliance with Ongoing Requirements

To maintain compliance with ongoing requirements, you must regularly file necessary reports, renew licenses and permits on time, and fulfill tax obligations promptly.

As a business owner, it’s essential to stay updated with changes in regulations that affect your industry, keep thorough records of financial transactions and legal documents, and adhere to employment laws if you have staff.

How Much Does it Cost to Register Your Business?

According to the U.S. Small Business Administration (SBA), the total cost of business registration will not exceed $300. However, depending on your business structure and the state you choose to operate your business, the fees can be higher.

You can work with expert attorneys or business registration agencies to help you register your business and acquire all the required documents without needing to leave your home.

Get Legal Help to Form Your Business

Are you ready to form your business and pursue the visions you have? Don’t let mistakes hinder your progress. Work with Calkins Law Firm’s expert attorneys for precise guidance through every step, ensuring compliance and peace of mind.