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Registering your company: the steps you need to take
The excitement of starting your business can often be coupled with exhaustion at the amount of things you need to take into account – especially for small businesses, which often need to do things independently at first. Having an overview of what needs to be done in the early stages can be really helpful – especially for bureaucratic processes such as registering your business. In this article you’ll find a checklist of the information you’ll need to have at hand, as well as the registration processes you’ll need to go through to make sure your business is registered so it can stay up and running!
Checklist for your business
Before diving into the steps you’ll need to take to register your business, it is a good idea to make sure you’ve checked off these business basics. Having a clear overview of the following things will help you register your business quickly.
- Business location: Where is your business based? Depending on the location of your company, you’ll have to consider different authorities and taxes. You may also be eligible for federal government incentives, which are provided for businesses in HUBZones (historically underutilized business zones).
- Business structure: Is your business an LLC, a corporation, a partnership, or a sole proprietorship? These different types of business structure will affect your tax returns, as well as your company’s registration.
- Certain things like your businesses name are probably something you’ll already have thought of – just make sure the name is not already registered, and if you want to use the same name across the board, that the domain hasn’t been taken.
- Ownership: Again, this may seem obvious, but having the details on this information is vital for registering your business. This also includes the director of your business, and information on how the management system is structured.
- Shares: Have the number and value of your company’s shares at hand when registering your business to make sure things go smoothly. This only applies if your business operates as a corporation.
Simply being aware of this information will help make the registration process easier, so make sure you have it at hand – or at least in mind!
Find out if you need to register your business
As mentioned above, the location and structure of your business will influence how you register it. If you are a small business, it is quite likely that all you’ll have to do is register your business name with the state and local government. It is worth checking with a local advisor to make sure you’re adhering to local and state regulations. Even if most businesses do need to register, there is the possibility that you won’t need to register at all – this could be the case if you operate your business as yourself. This means that your business is the same as your legal name, and in this case you won’t need to register yourself as a business. Again, make sure you check the specifics with a local business advisor to ensure that the rules are the same in your area. It is worth knowing that business registration brings with it certain perks such as personal liability protection, as well as legal and tax benefits – so although it may be a hassle, it is worth it in the long run.
Register with the necessary agencies
Depending on the specifics of your business, you’ll have the register with the local, state, and federal government, or a selection of the three.
Generally speaking, you probably won’t have to register with your city government to legally form your business – although this is worth checking, depending on where your business is located. However, this is also dependent on what your business structure is, as LLCs and corporations will probably need to file for licenses and permits from local agencies. It is your local government itself that determines what and how you should register as a business, so check your local government’s website for further details.
As an LLC or corporation you will probably have to register in the state(s) in which you are active. This can also be called having nexus with a state. This could be the case if you have business dealings within a state, so clearly your main business will have nexus in the state it is located in, but even if you just operate in another state for part of the year, or for seasonal events, it may be enough to create nexus. Furthermore, if a significant amount of your revenue comes from those sales, it is even more likely that you’ll have to register in that state as a business too, as well as in your “main” state. The process of the registration changes from state to state, with some allowing online applications, and others requiring paper applications, filed through the post.
Get a registered agent when you register your business. They get all the official documents and papers for you, and it may save you some time and effort. Note that the registered agent needs to be active in the state that you’re registered in, and not based in another state.
The cost of registering your business shouldn’t exceed $300, but this may vary depending on what kind of business you are registering. It also depends on which state you are registering your business in. Above, you will have already seen a checklist of the things you’ll need to register your business. One further piece of information to have at hand is the information of your registered agent.
Most businesses won’t have to register with the federal government, other than to receive their EIN (see below). The exception will be if you want to register for tax exemption status, in which case you have to contact the IRS.
Get your Employer Identification Number
Your employer identification number (EIN) is also known as your federal tax ID number. In order to do things for your business, such as opening a bank account and hiring employees, you’ll need to have your EIN. Technically, it is something you should do after registering your business, but it is something that you might as well prepare during your business registration. It is simple to apply for an EIN, and free. There is more information in our detailed article on EIN numbers.