Starting a business is exciting, but there are lots of hoops to jump through. One of the most important is registering your business. This process varies by state and type of business.
The first step is deciding what kind of company you want to register as. This will affect how you do business and pay taxes.
Choosing a business name
Choosing a business name is an important step in launching a company. A good name will help your business stand out from competitors and attract consumers. It will also save you advertising dollars by eliminating the need to clarify a muddled message. However, you must remember that your business name must be unique to protect your rights. You can register a business name if it is not already in use by submitting an article of amendment to the state or local government agency.
You should also check whether a domain and social media handles are available for your proposed business name. If they are not, you may want to consider another name. Also, you should avoid names that imply a specific location or product category. This will prevent confusion when you expand your business to different locations or add products. For example, a trucking company should avoid names like “Willow Twig Trucking” or “Kitten Transport.” Instead, it should opt for names that convey strength and reliability, such as “Stone Road Trucking” or “Iron Horse Towing.” This will also give your brand a more professional image.
Forming an LLC or S-corporation
Choosing the right entity structure is a critical step for business owners. The entity type may affect personal liability protection, taxation and management flexibility. The best choice depends on the size of the company, number of owners or shareholders, industry and long-term goals.
LLCs are easy to establish and maintain, with fewer formalities and eligibility requirements. They can be member-managed or manager-managed, providing flexibility in how the company is run. LLCs can also have unlimited owners from all over the world, while S corporations limit ownership to 100 shareholders who must be US citizens or residents.
S corps require more stringent corporate requirements than LLCs, including regular shareholder and director meetings and adoption of corporate bylaws. They can also have higher initial and ongoing costs due to federal and state tax filings. They also have stricter restrictions on the types of shares that can be issued, which can limit growth potential and investment opportunities. S corp owners must also pay self-employment taxes, whereas LLCs are subject to pass-through income taxation.
Obtaining an EIN
An EIN, also known as a TIN (Taxpayer Identification Number), is one of the first steps to getting your company off the ground. You can apply for an EIN online from the IRS or by completing a paper form, provided that you meet certain criteria. To be considered a responsible party, you must have either a Social Security Number or Individual Taxpayer Identification Number (ITIN).
During the application process, you’ll need to provide your name, address, the type of business entity, reason for applying, and more. If you’re not sure what your business structure is, the IRS website provides definitions for common terms used in the application.
Once you submit your SS-4, you’ll receive your EIN in the mail within four business days. You can also choose to have the IRS fax or mail you your EIN, although this will delay the process by two weeks. Lastly, some third-party services offer to obtain an EIN as part of their business formation packages.
Choosing a registered agent
Whether you are starting a new business or have been in operation for years, one of the first things you’ll need to do is appoint a registered agent. This is a legal requirement that ensures the public and government have a way to contact your business.
You can appoint yourself or another person in the company as the registered agent, but many choose to outsource this role to a professional service. This provides a number of benefits, including convenience and confidentiality.
When choosing a registered agent, consider their track record and the services they offer. Look for a provider that offers unlimited forwarding of government mail and has a physical address in your state of business. Also, look for a national registered agent that can serve any business anywhere in the country, making it easy to expand into new states and keep all official paperwork associated with your business in one place. This will help you stay in compliance with all business regulations and avoid fines.register a company