How do I register my business?' is one of the most commonly asked questions from new small business owners.
What most new business owners don't realize is that registering your business isn't simply a matter of taking a trip to your local county offices and you're done. Business registration typically involves several checklist items including registering your business structure, registering to pay taxes, registering to get a permit, and so on.
Like all things in business, your best approach is to take things one step at a time.
Here are some tips and best practices from the Small Business Administration, and other Government Agencies on how to register your business at the federal, state, and local agency level.
1) Decide on a Business Structure
Before you take care of registering your business you'll need to step back and consider how you wish to structure your business as a legal entity; whichever structure is right for you will determine further registration requirements.
If you decide to create a corporation, a non-profit, an LLC or a partnership, you will have to register your business and file certain documents with your state government.
If you are operating as a sole proprietorship, you don't need to register your business with your state. However, if you choose to operate your business under any other name than your own, you will need to formally file your trade name or 'doing business as' name with your state. See the next step in business registration on how to file your business name registration.
Read more about choosing a legal structure for your business and how to go about registering that entity with the government.
2) Register your Business Name
If you choose to name your business under a trade name - for example 'Green Fingers Lawn Services' - you cannot operate that business under that name until it is officially registered with your local government. Until then, the legal name of your business essentially defaults to your given name. Find out how to register your business name in your state.
3) Register with the IRS and get a Federal Tax ID
This won't apply to all new businesses, but if you have employees, any business partnerships, are a corporation or other organization, you'll need an Employer Identification Number (EIN). To check whether you need an EIN, take this quick survey: Do I Need an EIN?. You can apply for the EIN online here. If you don't need an EIN you can simply use your Social Security Number to administer your business finances.
4) Register with Your State Tax or Revenue Office
As well as a federal tax ID, you'll need to pay state and local taxes - although each locality has its own laws.
As a rule, you'll need to register your business with your state's revenue office, you may also need to apply for a tax permit (e.g. a sales tax permit will let you legally collect sales tax from customers). As a business operator you'll also need to comply with state income tax and employment laws. Get more information on state tax registration requirements here.
5) Register for the Appropriate Business Licenses & Permits
It often comes as a surprise to many new small business owners that, in fact, most businesses - from home-based business consultants to storekeepers, restaurateurs, and so on - require some form of government permit or licenses to operate.
The good news is that, navigating the world of small business licensing laws and regulations got a whole lot easier with the launch of the U.S. government's Permit Me interactive search tool. The tool provides a single place for business owners to seek out the licenses, permits and registrations needed to run their businesses. Searches can be customized to meet your specific business type and location, and the tool will generate links and instructions to get you started.
- 10 Steps to Starting a Business – provides you with the information to help you plan, prepare, and manage your business.
- Search for Business License and Permits - to operate your business, you must comply with a wide range of local, state and federal rules – use SBA’s Business Licenses and Permits tool to help you navigate this process.
- How to Name Your Business - If you're having some trouble selecting a business name, here are some tips to consider.