Every week, we answer a common question about marketing or an aspect of business. This week, our question comes from a fan who entered our giveaway for an Amazon Firestick and Echo Dot bundle. Today, we will answer the following question: “how do I register a business?”
When starting your small business, it is important to make sure you register your business with your local government. This may sound a little intimidating, but I assure you, it’s not as bad as it sounds.
Please note: this guide is for residents of the US. Other countries’ processes will be different. Even with the US, laws differ by state, county, and city. Use this post as a guideline, but not as a document of ultimate legal authority.
1. Make Sure Your Businesses Name Isn’t Taken
The most straightforward way to see if someone has already taken your business name is to Google it. If you search on Google and find that someone else has taken the name, you probably want to pick a different name.
Rules for registering your business differ by state, but most states have a way to see if your name is available when you go to register your business. If your state government does not have a way to check for available names, try Sba.gov.
- Entity name registration – this protects your business name at the state level. (This is the focus of this guide).
- Trademark registration – this protects your business name at a national level.
- Doing Business As (DBA) name registration.
- Domain name registration – this secures your business’s website address.
2. Pick The Right Kind of Business
The next step in this process is to choose what type of business you want to run. While there are many types to choose from, the seven most popular types are a Sole Proprietorship, Partnership, Limited Partnership, Corporation, LLC, Non-Profit, or a Co-Op. Each business structure has its own unique set of advantages and disadvantages. Through a thorough evaluation of your own goals, you can determine which type is the best fit for you.
This is important to take into account from an early point in the process as you need to know what structure your business has in order to register it. According to Sba.gov, “your location and business structure determine how you’ll need to register your business. Determine those factors first, and registration becomes very straightforward. For most small businesses, registering your business is as simple as registering your business name with state and local governments.”
3. Get Your State License And Any Other Licenses Required
“The licenses and permits you need from the state, county, or city will depend on your business activities and business location. Your business license fees will also vary.” The same basic principle applies to federal licenses too. To determine which, if any, additional licenses or permits you need, go to your state’s website and search by the type of business you intend to open. When in doubt, you can always call as well.
4. Get An EIN Number With The Federal Government
An EIN number is a nine-digit number that is used to identify your small business. “You may need to obtain an EIN for a number of reasons, including business, estate, or trust banking, and hiring employees. Businesses also need EINs when they are required to file employment tax returns; excise tax returns; or alcohol, tobacco, and firearms returns.”
In plain English, you need an EIN to file taxes. It takes about five minutes to set up, and you can do it here.
5. Get a State Sales Tax Number
You will likely also need a state sales tax number. The concept is similar to an EIN, but instead of being used for taxes at the federal level, it is used for taxes at the state level. Forty-five states and the District of Columbia collect statewide sales taxes, so you probably need a sales tax number. “This number allows you to collect and submit sales taxes to your state’s tax authority. Without a tax ID number, your business can’t collect taxes, and it risks fines and other legal actions.”
6. When In Doubt, Use a Service Like LegalZoom
If you are still feeling a bit lost on where to go, what to do, or any of these steps, look into a service such as LegalZoom. LegalZoom can help you find out which specific steps you need to set up a business in your state. It costs extra, but for many busy people, the extra cost is worth the convenience.
Registering a business may seem overwhelming, but fortunately, the process looks worse than it actually is. You don’t have to go through a process like this alone (even if we’re all standing six feet apart now). There are literally countless resources available for you online. We hope that this article can get you going in the right direction!