Registering your Business
With any business, there are a number of legal considerations that you'll need to keep in mind if you want to operate lawfully in your area. Some businesses have a long list of regulatory requirements they need to satisfy in order to start operations. Other businesses aren't bound by many or any regulations at all. It all depends on the type of business you run and the types of services or products you plan on bringing to the market. While regulatory requirements may differ from state to state, one thing that all businesses need to do is register themselves with state and federal authorities.
What is Business Registration?
Business registration is the process of ensuring that your business is registered with the proper authorities. Most business owners throughout the country will not be required to get a "license" to operate their business, but they still need to register with the state and the Internal Revenue Service. The process of registering a business includes contacting these various agencies to register names, addresses and other information for those who own the business. While there are a few different agencies involved, this is not a very difficult process to get through.
Registering a Business with the State
The first step in registering your business should be to register it with the state. Since your federal registration activities will require you to provide a business name, it's important to do your state-level registration first.
To get started, you'll need to go to the website for your state's Secretary of State. On this site, you'll find all the information necessary to register your business as one of a few different business classifications. You should know ahead of time whether you want to become an S-Corp, Partnership, LLC, LLP or one of the many other registered business entities. Most Secretary of State websites across the country will allow you to take care of the whole registration process online. This makes the process very convenient and it helps some states to keep registration costs lower.
The next step is an optional one that many business owners choose to take after the initial registration of their business. After the initial registration, you can choose to register a DBA with the state. DBA stands for "Doing Business As" and it is essentially just a name that you can give to your business that is "catchier" than your registered business entity name. For example, if you registered "Eric Erickson Business Concepts LLC" you may not want to put that on your business card. You may want a name that is catchier, easier to remember and represents one specific business concept. In this case, you could purchase a DBA and go by the name "Candles by Eric" if you were selling candles.
You may also want to look into a DBA even if you don't want to completely change the initial registered business name. For example, businesses registered as an LLC are legally required to keep the LLC designation attached to their name on all promotional materials and business identifications. To drop the LLC from a name in this circumstance, a business owner would have to register a DBA with the state that did not incorporate the LLC designation.
Registering a Business with the Federal Government
After the initial state-based requirements are met, you can go on to registering your business with the federal government. This registration doesn't have much to do with the "type" of business you are running. It is mostly geared around providing you with a tax number so you can pay your income taxes to the IRS.
The first step would be to visit the Internal Revenue Website and search for the EIN registration page. The term EIN stands for "Employer Identification Number" and you'll need one of these even if you're not employing anyone yet. This number acts as an identifier that you can use on all business forms that would otherwise require your personal social security number. In this way, personal social security numbers of the owners are kept separate from the finances of the business. The registration needs to be done during certain hours of the day through the Internal Revenue Service website.
Registration Seems Complex but is Very Simple
When new business owners look at everything they need to do, it can seem like there is an impenetrable wall between them and their final goal. While it will take some legwork to get your business fully registered, it's really not that difficult of a process. Different states will charge different amounts of money for registration fees, but the federal EIN registration is a free process. With the right planning, this whole process can be completed in a few hours on one day. After all is said and done, you'll have a fully-registered and legal business.