In our
QuickBooks Blog, we have information for seasoned business owners, those just starting out, and everything in between. Starting a business is a big adventure but can be intimidating. You may find yourself not knowing exactly where to start. Today I’m going to share with you information on how to register your business so you can make it official. :)
First, let’s go over if you need to register your business. If you don’t know yet, there are different business structures and they all operate slightly differently. Brand new businesses should take the following into consideration:
- Sole proprietorships: These generally aren't required to be registered, though registering would likely be beneficial to you and your business.
- DBA: You may need to register your business with your state. This does vary from state to state, so it's best to check with your state's regulations.
- Partnership: It’s always best to register a partnership with both the IRS and the state.
Now, what are the benefits of registering your business? Registering your business creates that separation between your business assets and personal ones. No one expects to be sued, but if that does happen, your business assets are protected. It also eliminates the risk of losing your personal assets if anything goes wrong. If you need to open a business bank account (most business owners do), you’ll need to provide proof that your business is properly registered with the state.
Here are some more reasons you should consider registering:
- Registering helps you build your brand’s reputation because potential customers will see you as a legitimate organization.
- You can hire employees and pay them per your state’s laws. When you register your business with the state, you’ll receive a state EIN that allows you to collect state taxes for your employees.
- Registering comes with its share of financial benefits, including tax benefits and the ability to officially apply for loans and other funding. Investors prefer to work with registered businesses. Finally, registered businesses earn insurance premium deductions, deferred tax payments, and more.
OK now that we’ve gone over that information, let’s take a brief look at the steps:
- Choose a business structure- sole proprietorship, LLP, LLC, etc.
- Find a location – This can be a physical address of your storefront, or a PO Box if you’re an online business. Tip: If you work from home, ensure your business is allowed to register at your home address—some states won’t allow you to use your personal address as your business address.
- Register your business name – This prevents other businesses from using your name. If you’re a separate entity, like LLC or corporation, registering your business name is a part of the registration proves.
- Register with the IRS – Doing this will give you your Federal EIN, or Employer Identification number. This is like a Social Security Number for a business and will be needed for filing taxes, opening business bank accounts, and hiring employees.
- Register with state and local agencies - this includes Department o Revenue, Secretary of State, Better Business Bureau, and Franchise Board. It'd be helpful to hire an attorney since each of these entities has I’s own rules and requirements that have to be followed.
- Apply for a business license and permits- If you want to know what licenses and permits are needed for your business, you can contact your local branch of the Small Business Administration.
For a deeper dive and more information, check out the full article:
How to register a business: 6 steps you need to take.
