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The task of business registration may appear intimidating for many entrepreneurs due to numerous steps and crucial decisions involved in the process. However, starting a business is an exhilarating and fulfilling experience, and business registration need not be a daunting task.
The purpose of this blog post is to provide a comprehensive guide that will take you through the entire process in a step-by-step manner, ensuring that you have all the necessary information to make it a smooth journey.
Whether you’re starting a new business or registering a business which already exists, this guide will provide you with tips and resources to help you navigate the process confidently and easily within seven simple steps.
If you find yourself still struggling with the process even after going through the article, we have put together a list of excellent business registration services like ZenBusiness that can do the job for you.
How to Register Your Business in 7 Simple Steps
The process of business registration can be uncomplicated if one is aware of the necessary steps to take. By following these 7 steps, one can establish their business efficiently and rapidly. It’s important to be well-informed in order to complete the registration process without leaving out any crucial details.
Step 1: Choose Your Business Structure
Choosing the appropriate business structure for your company relies on the kind of business you want to establish and your expansion plans. As previously mentioned, there are various integrated and unincorporated business types to select from, and each of these choices has its own unique features and functions.
It’s important to remember that business registration is only necessary if you opt for a structure that mandates incorporation, such as those listed below.
When running an unregistered business, there is no distinction between yourself and the business. All profits earned will be yours to keep, but you will be responsible for paying income tax on them. Additionally, any assets you possess can be utilized to settle business debts or expenses incurred due to its operations, such as compensating a customer who sustains an injury while using your product or service.
A general partnership refers to a business that has multiple owners and operators. Just like in a sole proprietorship, all partners are responsible for the actions of the business and they’re individually liable for paying off debts, taxes, and legal obligations.
A limited partnership involves a general partner who manages the company and bears full responsibility for any debts or losses. Other partners, called limited partners, contribute financially but do not participate in daily operations. Their liability is restricted to the amount they have invested in the business.
Limited Liability Partnership
The abbreviation LLP stands for a business structure where all partners have joint ownership and share liability for the company’s debts and actions in proportion to their initial investment. This means that partners are only at risk of losing the amount they have invested.
It’s important to note that certain industries and professions may have restrictions on Limited Liability Partnerships in some regions of the US, and therefore, it’s crucial to check local regulations before choosing this business structure.
Limited Liability Company
The Limited Liability Company, commonly referred to as LLC, establishes a legal distinction between the owners and the business. Once incorporated, the LLC is acknowledged as a distinct legal entity on its own.
For entrepreneurs running small businesses, forming an LLC can be an excellent choice. This is due to the protection of personal assets from business debts, along with tax advantages. Moreover, the registration process of an LLC is less complicated than that of a complete corporation.
C Corporations are typically big organizations that have numerous stakeholders and investors. Similar to other incorporated businesses, a C Corporation provides legal separation between the company’s liabilities and assets and those of its owners.
When setting up a C Corporation, there are several obligations that must be fulfilled. These obligations encompass organizing annual meetings and electing board members through shareholder voting.
Step 2: Register Your Business Name
To name your business, you have three options: register a business’s legal entity name or a trademark, or use a legal name and operate under a different one. It’s important to note that naming guidelines vary from state to state, so it’s crucial to review the requirements for the state in which you plan to register a business.
Naming a business is similar to the process of incorporating it, as the choice of name will depend on the specific needs and circumstances of the entity. It’s important to consider all relevant factors when deciding on a business name.
To ensure the exclusivity of your name, you may opt to go through all three routes or select any one of them. While it’s not mandatory, it would be advisable to use the same name for all registration methods.
We will examine each of the naming choices in more detail.
In order to identify a company, most states mandate businesses to register a business legal entity name which must be exclusive to them. This ensures that there is no possibility of any other business having the same name as yours and provides you with protection.
Naming laws vary slightly among states, with some states specifying rules regarding the use of company suffixes such as “incorporated”, “limited”, or “corporation,” while others mandate that the name should indicate the nature of the business being registered.
Having a trademark for your business name provides national-level protection. This means that once your business name is trademarked, it becomes exclusive to your business, and no other business can use the same name while registering in the United States.
It’s important to check the US official trademark database for any existing trademarks before finalizing a name for your idea. This step is crucial as using a name that has already been trademarked can lead to legal consequences, as it’s considered a criminal offense.
Doing Business As
It’s possible to register a business with one name and use a different name to operate it, which is called a Doing Business As (DBA) name. Even though federal trademark laws apply to these names, it’s not necessary for a DBA name to be unique at the state level.
Step 3: Consider Taxes and Other Costs
Business registration and tax regulations vary by state, implying that registering in a specific state could lead to certain tax advantages and other cost benefits. In case you intend to conduct business in more than one state, it’s essential to ensure that your business meets the eligibility criteria for operation in each state. To simplify the entire process, you can seek assistance from business registration services such as ZenBusiness.
Step 4: Register and Acquire Licenses and Permits
The regulations for incorporating a business depend on the local authority where you plan to register a business, and every state has its own set of rules. However, there are some general requirements that apply universally.
To begin with, it’s necessary to acquire an Employer Identification Number (EIN), which is a unique number used for tax identification purposes. This number guarantees that your business is compliant with tax regulations, eligible for tax deductions, capable of hiring staff, and capable of performing other necessary activities. Additionally, there are certain essential documents and information that are required to obtain the EIN.
Articles of formation or incorporation
An official business name
An official business address
Identifying information about the company owner(s)
The documentation required for business registration with your local government will vary depending on the nature of your business.
Corporation: Articles of incorporation
LLC: Articles of organization
LLP: Partnership agreement
Corporation: Organizational bylaws
LLC: The operating agreement
LLP: Partnership agreement
Corporation: EIN (Employer Identification Number)
LLC: EIN (Employer Identification Number)
LLP: EIN (Employer Identification Number)
Step 5: Open a Bank Account for Your Business
Once you obtain your EIN, it becomes possible for you to initiate the process of starting a business bank account. It’s crucial to have an EIN before proceeding with the account opening formalities.
In order to open a business bank account, it’s mandatory to comply with the legal regulations governing LLPs, LLCs, and corporations. However, sole proprietors and unincorporated partnerships are not mandated to maintain distinct personal and business bank accounts.
To open a business account, you can visit a nearby bank and complete the necessary documentation. However, it’s advisable to explore and evaluate the rates and benefits offered by various banks before making a final decision on a specific service provider.
It’s advisable to have a separate company bank account even if you’re working individually or have an unincorporated partnership to avoid mixing personal and business finances. This step can also help you avoid complications in the future if you choose to incorporate your business.
Step 6: Protect Your Intellectual Property
It’s important to consider protecting valuable intellectual property (IP) when starting a company, depending on the type of business.
To provide an instance, many businesses aim to safeguard their name and logo from being replicated and utilized by other organizations. Based on whether the business specializes in selling products or providing services, it may be necessary to protect the design of the merchandise or the creative output (like writing, design, or music) produced by the business.
It’s important to initiate the application process for protecting your Intellectual Property (IP) as early as possible to ensure that no one else can make use of it. There are numerous ways to accomplish this.
A trademark refers to a unique word, phrase, symbol, sign, or emblem that is utilized to distinguish a product or service from other comparable products or services. For example, the Swoosh symbol of Nike or the catchphrase “I’m lovin’ it” of McDonald’s. it’s an essential tool for identifying and branding a product or service.
For a trademark to be acknowledged, it needs to go through the business registration process which usually takes four to six months. Once the business registration is complete, the trademark becomes safeguarded across the United States and legal proceedings can be initiated against unauthorized usage.
Copyright law protects various types of original works such as written pieces, software, web content, films, sound recordings, and images. The creator of such works has exclusive rights to distribute, reproduce, create derivative works, or sell their intellectual property.
When a new work is created, a copyright is automatically granted. The ownership rights can be transferred to someone else through means such as sale, gift, or agreement.
If you come up with a novel product or machinery, it’s imperative to secure a patent for it. By obtaining a patent, the owner is granted exclusive rights to the invention and can prevent others from producing, vending, or importing the patented product for a specific duration.
If you have an innovative invention that you want to safeguard, it’s wise to begin the patent application process early as it can be convoluted and may require up to five years to finalize.
Step 7: Set Up Your Payment Infrastructure
In order to be prepared for serving customers immediately after registering your business, it’s important to have a simple and convenient method for accepting payments.
Pay.com is a comprehensive payment platform that provides no-code options as well as developer-friendly APIs. It offers a highly adaptable and user-friendly system that can be tailored to suit any business’s objectives.
Pay.com offers a range of payment options such as credit and debit cards, ACH transfers, and digital wallets like Apple Pay and Google Pay, among others. You can choose to register a business and sell the products or services from any location, and your customers can conveniently pay using their preferred payment methods on our secure platform. No payment option is excluded.
Best Business Registration Services
Entrepreneurs and small business owners can benefit from the essential services provided by business registration services, which assist in setting up and managing companies.
These services offer a wide range of solutions, including registering new business entities, obtaining necessary permits and licenses, and ensuring compliance with state and federal regulations. Moreover, some services provide personalized consultation and ongoing support, aiding businesses in achieving success in their endeavors.
ZenBusiness is an internet-based company that assists entrepreneurs and small business owners in launching and expanding their firms by providing a variety of services. They provide economical business formation plans that include registered agent services, annual report filing, and additional features.
ZenBusiness also offers continuous assistance and resources to help companies comply with regulations and thrive.
Swyft Filings is an online LLC service that offers swift and convenient business registration services, with a focus on seamless business formation. They extend an array of business-related solutions such as LLC formation, incorporation, and adherence to regulations.
Swyft Filings also provides tailored assistance to enable businesses to sail through the formation process and remain compliant with both state and federal regulations.
Tailor Brands is a web-based service that assists businesses in establishing a consistent and expert brand identity. They present a variety of branding options, such as logo design, business cards, and social media branding, as part of their branding packages. Tailor Brands also offers different design tools and resources that enable businesses to make and modify their branded assets.
Northwest Registered Agent is an online service that supports entrepreneurs and small business owners in starting and expanding their companies. The company provides a variety of services, including registered agent services, compliance management, and document filing, and specializes in offering personalized assistance.
Additionally, Northwest Registered Agent offers business formation services for various entities, such as LLCs, corporations, and nonprofits. They’re well-known for their dedication to quality and outstanding customer service, making them a reliable partner for businesses of any size.
Incfile is a company that specializes in providing speedy and cost-effective services for business formation. Their packages come with various features like registered agent services, compliance management, and document filing.
The platform of Incfile is designed to be user-friendly and straightforward for hassle-free business registration. They also offer continuous support and resources to help businesses stay compliant and expand. If entrepreneurs want to establish a new business or register a business that is an existing one with ease and affordability, Incfile is an excellent choice for them.
Other Ways to Register Your Business in the US
Register with Federal Agencies
In order to become a legal entity, businesses usually only need to obtain a federal tax ID and are not required to register a business with the federal government. However, some small businesses may choose to register a business for trademark protection or tax-exempt status with the federal government.
Once you have established your business, it’s advisable to register a business’s name as a trademark with the United States Patent and Trademark Office. For tax exemption as a non-profit organization, you must register a business with the IRS as a tax-exempt entity. To form an S corporation, you must submit Form 2553 to the IRS. it’s essential not to overlook any of these steps.
Register with state agencies
In case your enterprise is structured as a limited liability company (LLC), corporation, partnership, or nonprofit corporation, it will most likely be necessary to complete business registration procedures in all states where to register a business’s activities to be carried out.
According to common understanding, it’s believed that one can engage to register business operations within a state when:
If your business is located within the state, it has a tangible or physical presence there
You frequently meet with clients face-to-face within the state
The state contributes a considerable amount to your company’s earnings
Is there any employee of yours who is working within the state?
Certain states permit to register of a business online while others require the filing of physical documents either in person or via mail
In order to operate a business in most states, it’s mandatory to complete registration with either the Secretary of State’s office, a Business Bureau, or a Business Agency.
Register with Local Agencies
Usually, it’s not necessary to go through the process of registering with local governments to establish your business. However, if your business falls under the categories of LLC, corporation, partnership, or nonprofit corporation, you may have to apply for licenses and permits from the county or city.
In some areas, it’s necessary to register a business with your DBA (a name used for trading or a false name) if it’s being used. The requirements to register a business, licensing, and permitting are decided by local governments. To determine what actions are required, visit the websites of local governments.
Benefits of Registering Your Business
In the US, it’s not mandatory to register a business, however, there are numerous advantages that may be accessible to you if you choose to do so.
The act to register a business officially can have an impact on:
The rates of your tax
The eligible deductions that you have the right to take
The responsibility for your company’s commitments lies with whom?
When it comes to reporting, all necessary information must be included
Find Out If You Need to Register Your Business
The process of registering your business is determined by your company’s location and structure. It’s important to identify these factors beforehand in order to have an easy and straightforward registration process. Typically, small businesses only need to register a business name with the relevant state and local authorities.
In certain situations, it may not be necessary to go through the process of business registration. If you’re operating a business under your own legal name, you may not be required to register a business. However, it’s important to keep in mind that not registering your business could result in the loss of personal liability protection, legal advantages, and tax benefits.
Do I need to Register an Online Business in the US?
Online businesses in the United States are subject to the same regulations as traditional businesses. it’s at the discretion of the business owner whether or not to register a business. While sole proprietors and general partners are not required to register a business, limited liability partnerships, limited liability companies, and corporations must register a business.
It’s important to consider the business location when making the decision to register a business online. If you intend to trade your products or services on a global or national scale, registering your business can improve its credibility.
In today’s world, customers who shop online are well-informed and often conduct research before buying anything. Adding a suffix such as “limited,” “incorporated,” or “corporation” to your business name can increase the credibility of your company in the eyes of potential customers. If you feel uncertain about this process, seeking assistance from online registration services like ZenBusiness, Swyft Filing or Tailor Brands can be advantageous for your business.
How to Register Your Business – Frequently Asked Questions
What Do I Need to Register a Business in the US?
Starting a business in the United States is a straightforward process that involves a few essential steps to register a business. The initial step is to choose a suitable name for your business. After that, you will need to select the state where you want to incorporate your company.
This decision will determine the required documentation and financial resources needed to complete the registration process. The business registration cost varies between states, ranging from $250 to $1,500, and you must check with local authorities to find out the precise expenses of incorporating your business and filing all necessary paperwork.
How Can a Foreigner Start a Business in the US?
The process of how to register a business in the US is the same for both foreigners and American citizens. it’s advisable to establish a corporation or an LLC, depending on the visa conditions, to ensure that the company operates as a separate entity, even when the owner isn’t present in the country.
Can a Non-citizen Start a Business in the US?
To put it briefly, starting a business in the USA as an entrepreneur is possible even without citizenship or US residency as most states do not require it. This is why the US is often referred to as the “land of opportunity.”
Bottom Line on How to Register Your Business
When it comes to steps for a business in the United States, the task can appear overwhelming, particularly if you’re completing paperwork that has the potential to determine the success or failure of your enterprise.
To minimize stress and ensure accurate registration, it’s important to follow the straightforward steps outlined above with precision. If you’re seeking assistance with business registration, we recommend ZenBusiness as our preferred provider. They offer a comprehensive range of services, including registration, licensing, permits, and reporting.
This story was originally published May 11, 2023, 12:00 PM.