Timeline for Registering a Business
At first glance, registering a business may seem complicated. Many factors come into play, to be certain, and the process goes a lot more smoothly when business owners understand the basics. Hiring a corporation service company can simplify things considerably, but it's still wise to have a basic understanding of what to expect.
In general, the process unfolds in the following way:
Choose a Business Entity
Will your business be an LLC, a corporation, a non-profit, a partnership or some other legal entity? You'll need to decide and file the appropriate documents with your state government. The only exceptional is if you're planning to operate as a sole proprietorship. Even then, if you'll be using a trade name or expect to operate as a "doing business as," you'll need to register the name of your company with your state government.
Register the Name of Your Business
Until you formally register a name with your local government, you can't use it while operating your business. Until registration is complete, the name of your company will default to your legal name.
Obtain a Federal Tax ID
If you're going to operate as a partnership, corporation or other type of organization or plan to have employees, you'll need to obtain an employee identification number, or EIN, from the IRS. Not all businesses need an EIN, so the first step is figuring out whether or not you do. If so, you'll need to obtain your EIN before you can start conducting business in your state.
Register with Your State Revenue or Tax Office
Regardless of where your business is going to be registered, you're going to have to pay state and local taxes. Therefore, you need to register your business with your local revenue or tax office. If you'll need to collect sales tax, you will probably also need a tax permit. It's crucial to comply with your state's income tax and employment laws, which can be complicated. A corporation service company can explain everything to you.
Register for Business Permits and Licenses
You don't have to be selling food or serving alcohol to require a business permit or license. At the same time, some companies don't require any licenses or permits to operate at all. The simplest way to find out whether you'll need any permits or licenses is by using the Small Business Administration's interactive online search tool. An even better option is to work with a corporation service company that will do this research on your behalf and help you acquire the required permits and/or licenses, if necessary.
While registering a business involves numerous steps, the truth is that the process fairly straightforward. Of course, mishandling any one of these steps can cause major delays and issues, so it's important to understand the process and to take care of the necessary steps in a timely manner. For the smoothest sailing, consider using an online LLC registration company to help you register your business.