Most businesses of any size are required to register with one or more government authorities. Small, one-person businesses are an exception, as they can conduct a wide range of operations without requiring official registration. Small partnerships may also be exempt from registration.
However, even the tiniest of enterprises may be required to register in certain circumstances. The procedure of registering a business is typically simple, but it may be more complicated for some specialist businesses.
Registering your business as a corporation or LLC may also be required when leasing vehicles for your business and taking out auto insurance for business lease. We’ll detail all the reasons you need to register your business with your state. We will also briefly explain how you can do this.
Every state in the U.S. has a secretary of state’s office, which preserves data on the state’s registered businesses. Filling out the required documents for your type of business is usually the first step in the registration procedure.
The documents allow you to register a business along with essential details such as your address, key executives, and the primary contact who will collect notices. The state may require a processing fee at the time of registration.
Depending on the sort of business you are establishing, you’ll need different forms and information requirements.
For instance, if you want to register your business as a corporation, the process is slightly different than if you’re going to form a limited liability company (LLC). There are even other types of LLCs too, like a single-member LLC.
Your state may ask you to submit a yearly update of your company information in addition to your original registration.
The sort of organization you pick for your company will determine the registration procedures.
Single-member enterprises that operate as sole proprietorships are generally exempt from registration. The company and its owner are regarded as the same.
Small partnership organizations may not also be required to register in some states. The specifics of who has to register vary from state to state. However, if your goal is to grow and improve your business, you should consider registering it.
Suppose your single proprietorship operates under a fictitious business name or a name other than your own. In that case, your state may require you to register your company’s name, often known as a DBA registration.
Any more sophisticated type of business structure, such as an LLC, limited liability partnership (LLP), or corporation, will almost always need you to register with your state.
Due to its flexibility, convenience, and limited liability protection for members, LLCs have become a popular corporate form. Many entrepreneurs opt to form limited liability companies, although it is not required to do business.
You can only do business in your own name if you haven’t registered with the secretary of state. You instantly become a sole proprietorship if you sell a product or service in exchange for any form of payment and have not registered.
Operating as a sole proprietorship without registering your business is perfectly legal. However, please remember that doing so does not give you legal protection if you go into debt or face a lawsuit.
You can’t legally use a business name unless you’ve registered it with your local state authorities and the Internal Revenue Service (IRS) as an officially recognized company organization.
The IRS doesn’t require any particular actions or papers to recognize you as a business. You just need to file your first business tax return to gain IRS recognition as required by federal law.
You must select a business structure, register with the proper municipal authorities, and secure the necessary licenses and permissions to register your business with the secretary of state.
The limited liability corporation is one of the many business forms from which you, as a new business owner, must pick when forming your new firm.
The LLC structure isn’t always a superb option for a startup. Different forms of company structures include a corporation, general partnership, limited partnership, and sole proprietorship.
In areas like liability protection, documentation requirements, and taxation, each structure has its own set of advantages and disadvantages.
When determining which business structure to use, it’s a good idea to get advice from a certified public accountant as well as a lawyer with business expertise and experience. The type of lawyer you need to speak with depends on the type of business you operate. For instance, a gym or personal fitness center may want to talk with a personal injury lawyer.
They can help you ensure that the decision you make gives the best possible protection against liability and tax benefits while reducing operating costs to a minimum.
Certain types of business entities can keep your business and personal assets separate and protect you and your family from any financial difficulties your business may face.
Partnerships, S- and C-corporations, and LLCs can all help show that you are the first person to use your selected business name. They’ll also keep another firm from using your name in the state where you do business.
These structures will also allow you to get financing from angel investors, venture capitalists, banks, and the Small Business Administration.
Even after completing their registration with the secretary of state, businesses may need to register in other formats.
- Dun and Bradstreet: Your company may need to have a D&B number. A D&B number is required for businesses that want to work with the federal government.
- Employer identification number (EIN): Employers must have a unique identifier known as an Employer Identification Number, or EIN (often spelled FEIN, with the “F” standing for “federal”). To properly submit taxes to the IRS, you’ll need an EIN. The IRS offers a free EIN registration service.
- Specialty registrations: Other governmental bodies may need specialty registrations for particular kinds of companies. Financial investment advisors, for example, must register with state or federal monetary authorities. Medical practices, too, must be regulated and registered in the state in which they operate.
To operate certain businesses, you may need one or more licenses. The sorts of business licenses you’ll need are determined by the type of business you’re starting as well as the city, county, and state in which you’ll be operating. You will also need a business license if you want to obtain an SBA business loan.
To run its operations, you’ll need a municipal or county license, so contact the county clerk’s office where you’ll be doing business to get one.
It’s critical to maintain compliance with all filing obligations once you’ve registered your firm. Even if you want to close your firm, you may need to complete some documents to avoid penalties.
If you decide to expand your firm and provide new products or services, you may need additional licenses. Every state or municipal government has its own set of criteria. It’s critical to understand when and how to file to keep your license current.
Imani Francies writes and researches for the auto insurance comparison site, AutoInsurance.org. She enjoys helping business owners make wise business moves and find the right auto insurance coverage for their company.