How to Become a Registered Business

By Elizabeth Rayne

Business formation is largely governed by state law, and registering a business is the process of obtaining authorization to transact business in a specific jurisdiction. The steps for registering a business generally include determining the appropriate business entity, determining if the name is available, applying for an employer identification number and filing the appropriate forms with the state. Once incorporated within a state, there may be further state and professional licenses and permits that must be acquired to conduct business.

Step 1

Select the appropriate business entity. Sole proprietorships and partnerships generally do not require registration because the owners of the business remain personally liable for the business. In contrast, limited liability companies and limited liability partnerships do require registration and owners are not legally liable for the debts of the company. On the other end of the spectrum are corporations, which are independent legal entities run by the shareholders. Corporations are the most complex structure with a number of legal and tax obligations, but provide the opportunity to sell ownership of the company through the sale of shares.

Step 2

Decide whether or not you want to register a pass-through entity. In a pass-through entity, the income "passes through" the business to the owners. This means that the business does not pay taxes, and instead the individual owners pay taxes on their personal taxes. There are fewer taxes on pass-through entities. Sole proprietorships, partnerships and limited liability companies are pass-through business, while corporations are not. Visit the Secretary of State website in your state to learn more about different business structures and pass-through entities.

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Step 3

Select a name for your business and determine if it is available. Visit the Secretary of State website in the state where your business is located and check the searchable database. For sole proprietorships or existing corporations or LLCs that wish to conduct business under a different name, you may select to register a "Doing Business As" name. Contact the county clerk's office or the state government to register a "Doing Business As" name.

Step 4

Register for an EIN. An EIN is a unique number for your business that will be used to identify it for tax purposes and may also be required for incorporating documents. Visit the Internal Revenue Service website to fill out an EIN application.

Step 5

File the paperwork to register your business with the state if required. Visit the business division of your Secretary of State's website to find the pertinent information and forms to register your business entity. There is usually a fee associated with the filing, which will vary by state.

Step 6

Acquire licenses and permits. Some business require individuals to hold professional licenses, and there are often state and local permits that must be obtained to remain in compliance with zoning and other local ordinances. If your company conducts business in a different state from where it was incorporated, acquire a certificate of authority as a foreign entity in each state where you will do business.

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Difference in Business License & Registering a Business

References

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