You’ve come up with the perfect idea for your business and decided it’s time to start turning it into reality. Before you dive headfirst into the process, take some time to do some basic research and planning so that you can start your business off on the right foot. Here are five simple steps to get you started on how to register your business in one day or less.
1: Choose Your Business Structure
The first step for registering your business is deciding on the type of business structure you want. This will be either a sole proprietorship, a partnership, or a corporation.
A sole proprietorship is easiest because there’s no need to register with the state and the owner assumes all liability for taxes and debts, but it can’t issue stock or offer ownership stakes. A partnership is similar because there’s no need to register with the state, but it has limited liability, meaning partners are only liable for their investment into the company. A corporation has more complicated paperwork at registration because it registers with both federal and state governments. However, it offers shareholders protection from personal liabilities, which means owners aren’t held personally responsible for any debts incurred by their company.
2: Register Your Business Name
Registering your business is easy. All you need is a name, a DBA, and a website. Here are five simple steps:
- Pick a business Name
- Register with the Secretary of State
- Register with the County Clerk
- Get an Employer Identification Number (EIN) from the IRS
- Check if you need permits, licenses, or certifications
3: Get A Tax Identification Number
While registering your business, you must get a tax identification number. The IRS will assign you an Employer Identification Number (EIN). To register, complete Form SS-4 and mail it to the IRS with a check or money order. You’ll need the name and address of your business, as well as information about what kind of entity you are, your principal business activity, and how many employees you have. If you’re starting solo, register your business as an LLC, but keep in mind that this is only valid if there are two or fewer members. If you want to start as a corporation but anticipate adding partners, later on, consider registering under the corporation name with a provision specifying as an LLC at some future date if desired.
4: Obtain Licenses and Permits
Registering your business is just the first step. The next thing you need to do is open a business bank account. Here are five simple steps you can take to register your business and set up a new account at your local bank:
a) Create an LLC, Corporation, or Sole Proprietorship (each has its advantages, but the most common choice for small businesses is an LLC)
- Create an LLC, Corporation, or Sole Proprietorship (each has its advantages, but the most common choice for small businesses is an LLC)
- Naming your business
- Registering with the state - Getting a tax ID number from the IRS and filling out paperwork at the post office (if applicable)
- Opening a business bank account that is separate from personal accounts.
This helps keep finances separate and organized. You’ll also want to register your business name with the state so that you don’t run into any copyright issues down the line.
5: Open A Business Bank Account
Before you start registering your business, you’ll need to open a business bank account. It’s easy and takes just a few minutes. You can also go ahead and set up direct deposit so that you never miss an important payment again. Once you have your account ready, it’s time to register your business with the government. Registering your company is different than registering as an LLC. Registering a company means that you’re registering your business as one entity while registering as an LLC means setting up multiple entities (or businesses). With this in mind, it is important to know whether or not you plan on hiring employees before deciding which type of entity will work best for your needs.
