Learning how to register a business yourself is possible. Though many people elect to use an attorney to help them establish their business legally, the process involves only a few steps. By registering your business, the business is legally able to operate.
About How to Register a Business
One of the best resources for United States small business owners is Business.gov, a federal website providing legal guidance, documents and instruction on registering and managing businesses. Use the site to find financing programs, including loans and grants and to prepare for taxes and employees.
The process of registering a business includes several steps, only briefly described here. These steps apply to those expanding an existing business or establishing a new one.
Legal Structure of Business
Establishing a business as a legal entity is a critical first step since it offers protection to your personal assets. The legal structure of a business depends on the financial, legal and tax needs of the business. Most small businesses start out as a partnership or sole proprietorship, but these are not legal structures. Rather, incorporating your business or forming an LLC is a necessary step to divide personal and business assets and debts. Understanding the types of business organizational structure as well as how this affects your business may require the advice of an attorney or accountant.
Once you determine the proper legal structure for your business, you will need to formally file registration with your state. For more information on how to do this, visit the Small Business Adminsitration.
Registering a Business Name
The legal name of the business defaults as the name of the person who owns the business. In situations where you have incorporated, the name you use on the incorporation documents for the state government is the legal business name. You may select any name that fits your particular needs. You must use the business name on all government documents, applications and taxation forms. It must be included on permits and licenses for the business.
Once you determine the business's legal name, register it with your state. Each state has unique requirements for this process, but the clerk of courts usually handles the process. For a full listing of locations to register a business name by state, visit the Business Name Registration website.
Establish a Federal Tax ID
A federal tax id number is critical for all businesses with employees. It is also necessary for business partnerships and corporations. An Employer Identification Number or EIN is available through the Internal Revenue Service. You will need to complete Tax Form SS-4 from the IRS to establish an EIN. Full steps to the process are available at IRS.gov.
State Revenue and Taxes
The next step in registering a business is to let the state's revenue agency know of the business's existence. States require businesses to obtain a state-specific identification number. It is also necessary to obtain a permit to operate the business in the state. If you are selling products that require sales tax, establish this relationship with the agency. A Sales Tax Permit or a Vendor's License is often a requirement. You can find steps to this process at the state's revenue website.
Gather Additional Permits
Many businesses need additional permits and licenses to operate. A general business license is one of those requirements in most states. Industry specific permits are often required by states as well. To locate the permits and licenses your type of business needs in your state and local area, visit the Licenses and Permits section of Business.gov. There, a search tool is available to help you to navigate these more complex steps.
Is Registration Necessary?
Learning how to register a business is a critical step in most businesses. Businesses receive tax benefits and can legally employ people. Business registration also provides a layer of protection for your personal assets from business debt. If you are unsure about the need to register your business, contact an attorney. The attorney will provide information on the benefits of establishing a formal business structure in your specific case.
