Registering your business with state and local government agencies is essential to starting a new company. It includes registering key documents like articles of incorporation or an operating agreement, obtaining a federal tax ID (EIN) and licensing and permitting requirements. Depending on the type of business, getting trademarks and tax-exempt status may also be necessary.
Choose a Business Name
When starting a business, choosing a name is one of the most important first steps. A distinctive name can help you stand out in a crowded market, establish your brand, and foster client loyalty. You must choose a business name that complies with state laws and meets your specific type of business structure. Start by brainstorming ideas for your business name. Try combining two or more words to create an appealing, catchy, unique name that will reflect your company’s goals. Be sure to pick a name that is easy to spell and pronounce and looks professional.
Finally, test the names you like by sharing them with others for their reactions and suggestions. If you need to know whether your chosen business name is available, check with a one stop business registration. Depending on your type of business, you should also check with federal and international agencies to ensure the name doesn’t conflict with any existing trademarks or patents. If you are forming a limited liability company (LLC) or corporation, you will need to include the word “LLC” or “Inc.” in your business name. It is optional if you are forming a sole proprietorship or partnership, but you must still comply with your state’s rules on filing for business registration.
Select a Business Structure
A business legal structure defines how a company is organized and what type of taxes it must pay. It also determines the level of liability for owners and whether or not a company can raise funds through stock sales. Choosing a business structure is a vital step that should be made in consultation with an attorney and accountant.
The most basic type of corporation is a sole proprietorship. Owners are personally liable for the business and can lose personal assets if the company fails. A partnership is a more structured option, with two or more owners sharing ownership and operation responsibilities. An LLC is a hybrid option that offers some of the benefits of a corporation, including limited liability, but also allows for “pass-through” taxation like a partnership.
Once you have selected a business structure, register it with your state. Depending on the state and firm structure, it usually entails submitting articles of organization, an operating agreement, and other paperwork. You may also need to file for tax registrations and obtain an employer identification number (EIN). If you are registering a business in more than one state, consider establishing a registered agent in each state where your company does business. A registered agent receives important documents from government agencies and the courts on behalf of a company.
Select a Business Location
The right business location is crucial for any small business. It can dictate foot traffic, business atmosphere and long-term success. Selecting the right place requires understanding your company’s unique operational needs and priorities. For example, a retail business might prioritize a high-traffic area, while an industrial site might prefer to be out of town for easier transportation. Considering your business’s visual style and brand can also help you eliminate prospective locations that won’t match. When choosing a business location, you should consider what your company will require regarding space, utilities and other costs that can add up quickly. It’s also important to understand local business regulations and taxes. For example, some areas may have special tax incentives for certain industries, saving you money in the long run.
The next step is to register your business at the state level. It involves filing documents that vary from state to state but typically include articles of organization, an operating agreement and a registered agent. You’ll also need your business’s federal employer identification number (EIN) and social security number. You can get an EIN from the IRS using its online application or work with a business registration service like IncFile to handle it for you.
Create a Business Bank Account
As soon as you’ve registered your business, a bank account should be opened in your company name to help keep personal and business expenses separate. This step helps protect you from personal liability in case of a lawsuit and makes tracking company expenses, payroll, and other expenditures much easier. Most banks offer business accounts for checking, savings, and credit cards. Some also provide perks like interest on deposits and merchant services to accept customer card payments. When choosing a business account, look for one compatible with the accounting software you plan to use to manage your company finances. The documentation required to open a business bank account varies based on your legal structure. For example, if you are a sole proprietor, you may need your business name and registration certificate, state business license, and Social Security number. Alternatively, partnerships or corporations typically need their business names, articles of organization or partnership agreement, corporate bylaws, and state and federal business licenses. Keeping your business and personal bank accounts separated will make it much easier to prove that expenses purchased through your business are eligible for tax deductions. It will also make filing taxes and paying employees easier since you’ll have a clear picture of all the money coming in and going out of your business.