So you want to start your own business? Cool beans! Now that you have a basic idea (or more in-depth idea) of what you want to accomplish with your business the next step is to register your business! This might sound, but once you learn how to register your business, it's actually a rather simple process. Let's dive in!
Learn the secrets to starting a business: Click Here to Get Started
Do You Need to Register Your Business?
Before you go digging into how to register your company, save yourself some time first and see whether or not you need to. According to the Small Business Association, if you are running your business as yourself using your legal name, registering your business is not important. However, not registering your business means you could miss out on personal liability protection and tax benefits.
If this is you, and your business is ran under your legal name, you might as well get started on your business ASAP and also register your business. Run the two paths in parallel. Registering your business does no harm, only good.
Choose Company Name
To register a new company, you are going to need a company name. For some, coming up with a name is an easy task, for others it's quite pain-staking. A useful tip if you don't have an exact name planned out is to actually go ahead and search possible names to see if their domain name is not already taken. This will save you time in the future, when you decide to create your company website (which you definitely should).
When choosing your company name, it's important not to pick one that's too similar to another existing company. Doing this will just result in confusion for your customers in the future. Also, pick a name that is easy to say. Names that just roll off the tongue smoothly tend to do better. Lastly, try and find a name that represents something about your business.
You want your business name to convey meaning. This is a brand that you are going to carry around for quite some time, put effort into picking a quality name, a name that you can attach yourself to. When you are attached to your brand name, your company will come across as more authentic. Authenticity is important! Authentic businesses naturally spread!
Form Your Business Entity
Once you have your company name, the next step to register a new company is to tie your name to your business entity. Put simply, a business entity is simply the business itself, and the things that allow it to be a business. Your business entity is the organization you are creating to run your business.
This business entity can protect your business name at state level. Not to worry, we'll look into protecting your business name at federal level in a bit here. This entity is how the state will recognize your business. Without it, your business cannot be identified by the state, and you won't have any of the benefits that come along with that.
There are four basic types of business entities:
- Partnership- Two or more people who share in profits and losses of company.
- Corporation- Becomes separate from those who founded it. The main advantage of a corporation is the individuals are not held personally liable.
- Sole Proprietorship- Complete manager control given to the owner. Owner is personally liable for business.
- Limited Liability Company (LLC)- Take advantages of corporation and partnership. It is more-or-less a blend between the two, and will, in most cases protect you from being personally liable.
When deciding how to register a new company it's important to register your company as the correct entity. Here is a useful article that goes into detail about these entities.
Federal Tax ID
If your business pays employees, or operates a partnership or corporation it is required to file for a federal tax id number. First, before you file for a federal tax ID number you should open a bank account for your company.
Once all the ducks are in order, it's easy to apply for a federal tax ID number. There is a useful IRS EIN Assistant tool you can visit to do exactly this.
State Tax Registrations and Requirements
Next, to register a new company you need to check out your state tax registrations and requirements. These are different on a per-state basis. Typically the price to register your business is < $300 . The state your business resides in is decided on the physical location of your business, where you conduct in-person meetings, where a significant portion of your revenue comes from, and if any of your employees work in the state.
To register your business with the state you will need to know your management structure, business name, business location, and number of shares (if a corporation). And the documents required to register are dependent on your structure.
If your state allows it, you can register online. However, numerous states require you to file your paperwork in-person. To register your company, visit the "Secretary of State" webpage for your state.
Get Business Trademark
Prior to getting a trademark, you should conduct trademark searches to discover whether or not a trademark already exists for your business' name. Check out the TESS tool offered by USPTO.gov to go about searching for existing trademarks.
Once you have verified there are no trademarks for your name go ahead and start the trademark creation process. To file for a trademark visit the TEAS tool provided by USPTO.gov. Unfortunately this process can take some time. For instance, your filing won't even be reviewed till roughly 3 months after submittal.
Though the process can take some time, it's worth the wait when registering a new company. Furthermore, this trademark, when approved will protect your company name for years to come.
After reading this you should now know how registering a new company really is not that complicated. Make sure you follow all the state and federal guidelines however. Don't cut corners on this, as it can be a costly mistake.
This is an exciting moment for this part of the journey for you! This is the beginning! At what follows will be a road with many ups and downs, mountains and valleys, which in the end lead to an oasis of personal work freedom, financial freedom, and a purpose-oriented business. See you at the top!
Catch you on the flip,
P.S. If you are wanting to, or have ever wanted to start a business, but are lost on where to start, click here and check this out