By Fernando Berrocal

After having a promising idea and doing the market research, you’re ready to start your business.  The next step is to register your business with the appropriate government authorities and get the documents in order. Depending on the business location and structure you choose, each founder will go through a slightly different process.

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How you register your new business will affect how you file taxes and apply for credit lines. While certain business arrangements safeguard your assets if the business suffers or collapses, others don't. You'll also need to come up with a catchy name for it. As you'll see, adopting several identities for legal, financial, and branding purposes has certain advantages. We've broken down the complicated process of registering a business into the following five simple stages:

Step 1: Select a Company Structure: There are four main types of company structures, and how you organize them has a lot of implications. It determines your record-keeping obligations, tax benefits, and even the expense of keeping it up to date. It's also necessary to be adaptable.

You should think about your company's current demands as well as your long-term goals. Do you have any investors lined up? Is it your primary objective to sell your business? The answers will help you decide which form of a company entity is ideal for you. The Small Business Administration also offers useful information on the various business formats, here's an overview.

• Sole proprietorship: You're considered a sole proprietorship if you don't register as another type of business entity. You might be held personally responsible for corporate debts and liabilities since your personal and business finances are linked.

• Limited Liability Company (LLC): This is another common business structure; since you'll have to pay self-employment taxes, it protects your assets.

• Partnership: If your company has many owners, forming a partnership is a great idea. Different levels of accountability and protection against corporate debt are available to partners.

• Corporation: The legal status of a company differs from that of its owners. It provides more personal security than other structures, but it comes with additional reporting and legal obligations. Startup entrepreneurs frequently incorporate their businesses so that they may raise capital by selling shares.

Step 2: Register your Business with the State: You must register your business as a partnership, LLC, or corporation with your state. Secretary of State offices are in charge of business registration in most cases. You can register online in certain states, but you must file documents in others.

You'll submit business information and pay registration and filing costs ($50 to $200) after you've identified your state filing office. The documents you'll need to provide are determined by your company's structure. "Articles of Organization" will be submitted by an LLC, whereas "Articles of Incorporation" will be required by corporation owners.

These documents should include information such as the company's name and address, as well as information about the owner. Specifics can be found in your states or locality’s guidelines.

Remember that you must register in every state where you do business. You're officially conducting business in another state if you meet with clients often, produce a major amount of income, or have employees there. The SBA website has directions for enrolling in several states.

Step 3: Select and register your business name(s): One of the most enjoyable aspects of the process is choosing a name, your company's name is the most important identification. You don't want a competitor to pick the one that feels right after you've chosen it. Keep in mind that the procedures for registering a company name vary by state, county, and city. In most cases, when you file registration papers with the state, your business name is automatically registered. Make sure the name isn't already taken in your state's name database. After that, fill out a name registration form and pay any filing fees.

Your company name will be legally protected at that moment, and no one else will be able to use it in the state. However, you may not have wanted to use your legal business name. In most states, you must include a suffix (known as a registered business name) that specifies the kind of business structure. A company, for example, may be required to include the word "Inc." An LLC, on the other hand, must include the words "LLC" or another approved title.

Getting a “doing business as” name registered: If your legal name doesn’t have the right ring to it, don’t worry. You can also register a “doing business as” name (DBA). This is also known as a fictitious or trade name. Business owners have a little more creative license with trade names, and no suffixes are necessary.

The process of obtaining a DBA is straightforward; you'll generally file paperwork with your county clerk's office. It is generally published in a local newspaper once it has been authorized. It's also worth noting that the same DBA might be used by several companies. More information about registering DBAs may be found here.

Why sole proprietors use DBAs: DBAs are essential for sole owners for several reasons. First, if a sole proprietor does not wish to include their legal name in their business name, they will require a DBA. To obtain a business bank account, most banks need sole proprietorships to have a registered DBA. This is an important step in establishing business credit and obtaining funding, and you'll also need a business tax ID number.

Registering a Domain Name: To register a business for e-commerce, you must first purchase a domain name. This will be your company's URL, the web address to which consumers will be sent. To obtain one, go to GoDaddy or Namecheap. It may be difficult to find a domain name that precisely suits your company name, so start exploring soon.

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Applying for federal trademark protection: It's a good idea to register for a federal trademark if you want to sell your goods or service across the country or worldwide. A business name, a logo, or a slogan can all be trademarked. The United States Patent and Trademark Office (USPTO) explains how to register a trademark.

Step 4: Request an EIN from the IRS: An Employer Identification Number (EIN), also known as a Federal Tax ID Number, is almost certainly needed for your company. An EIN is required for hiring employees, paying federal taxes, and other activities. To determine if you need to register, the IRS offers a short five-question assessment. It is free to apply and it may be done online. 

Even if an EIN isn't necessary, you'll need one sooner than later.  because it's necessary for establishing company credit. Without an EIN, you won't be able to establish a company bank account or obtain a business credit card. To qualify for a loan, banks and financial institutions frequently demand sole entrepreneurs to have an EIN and a DBA.

To open a business credit card, a company must have an EIN. It's an age-old way of proving creditworthiness to use this properly. This opens up critical financial options for emerging businesses. Finally, you'll need an EIN to apply for some company licenses and permissions.

Step 5: Other tax IDs, business licenses, and permissions can be obtained: State and local taxes are not required for all enterprises. That means you'll have to conduct some research to see if a state or local tax ID number is required. The website of your state government can answer specific questions and describe the application process. To function, businesses require federal, state, and local licenses and permits. The SBA maintains a list of federally regulated industries.

Permit and licensing requirements are often set by local governments. This section contains information on how to get professional and occupational licenses. To get started, you'll need to apply for certain licenses, such as a sign permit to show your business name on your store. Check the website of your local government to be sure you're on the right track.

Final tips on how to register a business: The US Small Business Administration's website provides step-by-step instructions on how to properly register a business. Nolo is also a good place to go for basic legal and business assistance. Finally, the best source of information is the website of your state and local governments. Please contact them if you have any questions.

Do you have an idea for a tech company, but don’t have any tech experience? MassLight can help. We build software and provide capital for early-stage startups solely in exchange for equity. Learn more about our build for equity program or contact us directly.

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