A man wearing an apron stands in the entry way of his business. In the background, the store is outfitted with wood-top tables and shelves of dark bottles. The man holds a sign that says "we are OPEN" and "supporter small businesses." "OPEN" is written in bold blue letters, with the other words arranged above and below in blue cursive.
Whether yous're setting up every bit a sole proprietor or starting an LLC, you need to register your concern. — Getty Images/Dan Rentea

Starting a business organisation is an exciting, contained venture filled with many decisions. Earlier launching, however, you lot'll need to annals your visitor with the appropriate agencies. Completing the registration process swiftly and accurately will assistance y'all put the correct foot forward and exist well on your manner to success.

Hither's how to annals your business organisation.

[Read more: Need a Concern Idea? Here's Where to Start ]

Define your business organisation construction

Different business concern types volition accept different registration requirements, and so it'south crucial to make certain you lot undergo the correct procedure for the structure best suited to your business goals. This will also determine which income revenue enhancement return forms you will demand to file. Hither are some of the most common business entities:

  • Sole proprietorship. A sole proprietor serves as the merely owner of an unincorporated concern. This is considered the default business concern structure. In a sole proprietorship, the proprietor'south business organization and personal assets and liabilities are not separated. Notation that sole proprietorship is different from being the sole member of a limited liability corporation.
  • Partnership. If two or more than individuals own a business together, they are entering into a partnership. There are multiple types of partnerships but the most mutual are express partnerships (LPs) and limited liability partnerships (LLPs). In an LP, one partner is exposed to personal liability while the other partners take limited liability. In an LLP, all partners are personally protected from whatever business debt.
  • Express liability corporation (LLC). Starting an LLC allows an individual to protect personal assets from concern liabilities. An LLC's profits and losses are and so taxed equally personal income or loss. Note that even if someone is the only member of an LLC and their concern is performance equally a corporation, they are not considered a sole proprietor.
  • Corporation. In this construction, a business operates as a separate legal entity from its owners, offering the well-nigh protection for any personal assets. The default corporation status is a C corporation, which is a separate taxable entity that files a corporate tax return. An Southward corporation, on the other mitt, has taxes "passed through" to the business concern and reported on an owner's personal taxation return.

Federally registering a business is a relatively uncomplicated procedure.

When to file with the federal government

Some businesses, particularly unmarried-person entities using their legal proper name to acquit business organization, don't necessarily demand to register with the federal regime. However, not doing so may mean missing out on potential taxation exemptions and more benefits.

Business owners who want to trademark their company, brand or product name must file with the U.s. Patent and Trademark office (USPTO). Certain corporations (such every bit nonprofits) tin also receive tax-exempt status by registering equally a revenue enhancement-exempt entity with the IRS. Finally, businesses must be a federally recognized entity to apply for government contracts — and then if your business plans to bid on government contracts, ensure you're filed with the federal government.

Federally registering a business is a relatively simple procedure. In many cases, business owners merely utilise for a federal taxation ID, ordinarily referred to as an employee identification number (EIN) and the procedure is complete.

[Read more: How to Register Your Business With the Federal Government ]

How to register your business concern

Once you lot've divers your structure, you lot'll need to register at the following places to start your business:

  • Annals your business proper noun. This step is typically part of the process of registering carve up entities, such equally LLCs or corporations. However, if you are starting a sole proprietorship or partnership under a name that is unlike from your own, y'all may need to file a "doing concern equally" or DBA proper name. You will likewise need to ensure that your chosen business proper noun is eligible for use.
  • Register with the IRS. For businesses that are required to (or may otherwise opt to) register at the federal level, the adjacent step is registering with the IRS to receive an EIN. The application process is free of charge and can exist completed online, past mail, by fax or by phone. To do this, y'all must possess a valid taxpayer identification number, such as a Social Security number.
  • Register with local or land offices. Most business concern structures will require you to annals with state offices, such as the Secretarial assistant of Country's office or a business organisation agency. Sure counties and cities may also require you to register your DBA proper name (if you take one).
  • Apply for permits. While you typically won't have to annals with county or city governments to form your business, you lot may need to file for local permits to go operational depending on your location or what your chosen manufacture requires. Visit your local government websites for more information.

[Read more: When — and Why — to Consider Changing Your Business organization Entity ]

Stay tuned for our next Startup2021 article on trademarking your business proper name.

CO— aims to bring you lot inspiration from leading respected experts. However, before making any business concern decision, y'all should consult a professional who tin can advise you based on your individual state of affairs.

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CO—is committed to helping you lot start, run and grow your pocket-sized business concern. Learn more about the benefits of small business membership in the U.S. Chamber of Commerce, hither.

Published June 24, 2021