Starting your own business can be an exhilarating journey filled with endless opportunities. However, the journey can also be filled with an endless task list.
One of those first tasks is often legitimizing your business by registering it with your state. Today’s post is all about helping you cross that item off your to-do list! I’ll tell you how to register your business with your state in easy-to-follow steps.
Step #1: Choose Your Business Structure
Before you can register your business with your state, you’ll need to pick a business structure. Which business structure you choose is an important decision that trickles down into other areas of your business like taxes, liability, and how you operate. I’ve written a complete post about choosing the right business structure that includes the pros and cons of each structure, but here’s the TL;DR version:
- Sole Proprietorship: A sole proprietorship is the simplest structure. You are the sole owner and responsible for all liabilities.
- Partnership: Simply put, this is a business owned by two or more people.
- Limited Liability Company (LLC): An LLC structure offers liability protection and allows for pass-through taxation. It can be single-member or multi-member LLC.
- S-Corporation: S-Corporation structure offers more liability protection, allows for pass-through taxation, provides ability to sell stocks in the business, is more attractive to investors, and often lessens self-employment tax bills, but it does come with more regulations than a sole proprietorship or LLC.
- C-Corporation: This structure is needed if at least one of the owners is not a U.S. citizen or if there are more than 100 shareholders. It allows for the business to sell stocks, but double taxation and more laws and regulations apply.
If you need help deciding on a business structure, speak to an accountant who has experience working with entrepreneurs like you.
Step #2: Choose Your Business Name
While this is something that can be changed later, taking the time to carefully choose your business name now can really help you think about your business and the image you want to project. Remember that your business name should reflect your brand but also be easy to remember.
There are 4 different ways that you may need and/or want to register your business name:
- Entity Name: Depending on your state and business structure, you may need to register an entity name with your state. You’ll want to first make sure your business name isn’t already in use. You can do that by searching your state’s business registry. Most states offer online databases where you can search existing names. Registering your name here will help the state identify your business.
- Doing Business As (DBA) Name: A DBA allows you to do business under a business name rather than your personal name. Similar to an entity name, depending on your state’s rules and your business structure, you may need to register a DBA with your city, county, or state. You can typically find information about what is required on your state government’s website. Heads up, your local government may refer to a DBA as a fictitious name, trade name, or assumed name rather than DBA.
- Trademark: Having a trademark will protect your business name on the national level. You can search for already registered trademarks or register your own trademark at the United States Patent and Trademark Office website.
- Website Name: It’s a good idea to lock in your domain name as soon as you can. Remember that if what you had in mind is already in use, or if the URL matching your exact business name is already taken, finding something similar will work just fine. You’ll want to use an accredited domain name registrar service to help you with this process.
Step #3: Get Your Paperwork Ready
Every state has its own requirements for business registration, but in general, most will require:
- Articles of Organization: If you’re forming an LLC or a corporation, you’ll need to file a document called Articles of Organization or Articles of Incorporation. Typically, this document will include basic information about your business, such as its name, address, and purpose.
- Operating Agreement: This document is sometimes required, especially if your business is an LLC. An operating agreement should outline the management structure and operating procedures.
- Partnership Agreement: This document is often required for partnerships. It should detail each partner’s roles and responsibilities in your business.
- Registered Agent: Some states require that certain entity types appoint a registered agent to receive official legal documents, tax notices, and other government communications for their business.
Step #4: Register with Your State
Once you’ve decided on your business name and have your documents in order, it’s time to register your business with your state. To do this, you’ll find your state’s business registration website, which is typically run by the Secretary of State or a similar government agency or office in your state.
You can complete an online application to register your business. This usually involves entering your business’ name, address, structure, and ownership details.
Finally, you’ll need to pay the filing fee, which varies by state and business structure. Be prepared to pay this fee upon submission.
Step #5: Wait. There’s More?
Oops, sorry! I know that once you’ve made it to this step, you’ve accomplished your task of registering your business with your state, which is the goal we set out to accomplish today. So first, take a moment to be proud about that!
However, there are a few more tasks you’ll need to complete to make sure you’re legal and official and ready to open for business:
- Obtain Necessary Permits and Licenses: Depending on your business type and location, you may need specific licenses or permits to operate legally. You’ll need to check with your local government for details about if and how you’ll need to apply for these:
- Business License: This is often required by your city or county.
- Sales Tax Permit: If you’re selling goods or services that are subject to sales tax, you’ll need one of these.
- Professional Licenses: You’ll likely already know if you need these or not, but I like to mention this to clients just in case. Remember that professional licenses are necessary for certain professions such as for tradespeople, contractors, health professionals, accountants, cosmetologists, and many more.
- Get an Employer Identification Number (EIN): If you plan to hire employees or operate as a corporation, you’ll need an EIN from the IRS. You’ll apply for this online. I’ve outlined exactly what you need to do in my post about getting an EIN.
- Open a Business Bank Account: Once your business is registered and you have your EIN, you’ll definitely want to make sure you’re separating your personal and business finances properly. The only way to do this right is to open a business bank account so you can maintain clear financial records, which will be very important when doing your taxes.
Step #6: Just Kidding! You Did It!
Congratulations! Now that you’ve registered your business with your state and completed the other necessary tasks, you’re officially a business owner!
When running a business, there are many tasks like this that seem tedious but are so important in helping you reach your business and financial goals without getting in trouble with your taxes or government regulations. If you need help navigating these tasks, you should definitely consult an accountant who can help get you started and keep you on track.
I’ve written tons of blog posts and created YouTube tutorials and videos to help small business owners like you. Here are a few that might interest you:
