How to Start a Business in 6 Steps | Mailchimp

Step #5: Register with the government and IRS

The business structure you choose will determine where and how you need to register your business.

Getting a federal and state tax ID number

Your business will need a federal tax ID number, also known as an employer identification number (EIN), if any of the following apply:

• Your business has or will have employees
• You’ve established the business as a corporation or partnership
• You have an LLC that’s multimember or has chosen to be taxed as a corporation
• Your business is involved with certain specified entities or files specific tax returns
• You intend to set up a Keogh retirement plan as a self-employed person

If none of these federal requirements apply, you may still choose to get an EIN. There are 2 main benefits to having one when it’s not required:

• You can offer it instead of your Social Security number to clients or anyone else who has to pay you.
• You may need it to open a bank account for your business or apply for certain permits.

If your business pays state taxes, you may need a state tax ID in addition to your EIN. The process and requirements vary by state, so check with your state government about your particular situation.

Registering your business name

If you operate a business under a name that’s not the one on your personal legal documents, you’ll need to do the following.

Protect your entity name

An “entity name” works at the state level. It keeps other businesses from operating under the same name and allows the state to identify your business accurately. States have different rules as to which businesses need an entity name and what that name can be. For example, in some states, your entity name has to reflect your business type.

Trademark your brand, business, or product

A trademark works at the federal level. It protects the name of your business and any other products or services that you choose to register as your own. You file a trademark application through the U.S. Patent and Trademark Office (USPTO).

A trademark is legally protected, so it’s important to check to ensure the name you want to use is available. The USPTO has a federal database that is regularly updated.

Register a “doing business as” name

A “doing business as” name, more commonly known as a DBA, is a name—other than your own—that you use to do business. Most states require you to register a DBA, and you may also need to register at the county or city level.

A DBA doesn’t protect your business name from use by others, but it does allow you to legally conduct business under that name, even if you don’t have a separate business entity. Your DBA, along with an EIN, will also allow you to open a business bank account under your company name. This is beneficial for sole proprietors who want to use a memorable name for their company.

Registering at the state level

Unless your business is a sole proprietorship, you’ll usually need to register in a state where you do any of the following:

• Maintain a physical presence or have in-person client meetings
• Have employees that work there
• Generate a significant portion of your income

In any state where your business is registered, you’ll also need to have a registered agent to receive legal papers and documents on your company’s behalf. Most business owners choose to use a registered agent service, but you can take on this role yourself. When you register, you’ll need to provide the following:

• Your business’s name and home location
• Registered agent information
• Information about shares if you have a corporation
• Documentation for your business structure (LLC, partnership, etc.)

Each business type has different documentation requirements, so make sure you have the correct documents before you attempt to register.

Securing local permits

Depending on your industry and business activity, you may need to file for certain licenses and permits in your city or county. This usually only applies to LLCs, corporations, and partnerships, but sole proprietorships with DBAs may also need to secure similar paperwork.

Check your local government’s websites to determine which rules apply to you. Be sure to check at the state, city, and county levels.

For corporations: Creating articles of incorporation

If you create a corporation, you’ll have additional rules and regulations to adhere to, beginning with your articles of incorporation. Filed with your state, these articles legally establish your company as a valid business entity and detail your corporation’s:

• Name and principal place of business
• Names of individual incorporators
• Director, if named
• Registered agent
• Intended business activities
• Stock information, including the number and value of shares available

You may choose to draft the articles of incorporation yourself or hire a business attorney to assist. If you decide to do it yourself, it’s a good idea to visit your state’s secretary of state website; most states provide useful templates of the relevant articles of incorporation.

When you’re ready to file the articles of incorporation, you’ll submit them—along with a filing fee—to your secretary of state’s office.