How To Register A Company?
What do you need to do to form a business entity?
What are the essential elements you should know!
In this article, we will break down the question of ‘How To Register A Company” so you know all there is to know about it!
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How To Register A Company
To register a company is to create a business entity allowing you to operate a business under a separate legal entity.
Depending on the type of company that you register or form, you may benefit from various advantages, such as:
- Limited liability protection
- Tax advantages
- Business credibility
- Flexible ownership structure
- Ability to raise funds
To form a company, you must take the necessary steps to complete the necessary paperwork in compliance with the state laws or company registration laws in the jurisdiction you are looking to form your business.
Let’s look at the different steps you need to take to register a company in the United States.
Step 1: Choose Your Company Name
The first step is to choose a name for your company.
Every company must have a name to do business with others.
Every company must have a company designation such as “INC”, “CORP”, “CO”, “LTD”, “LLC”, “LIMITED”, or something similar as required by the state laws.
It’s important that your company name is not the same as another company or lead to confusion between the two.
As a result, it’s generally a good idea to do a company name search in the state database to ensure that there are no other companies registered with the same or similar name.
You can register for a company name and also register fictitious names (or assumed name).
A fictitious name is another name used by your company to do business.
Consider a fictitious name like a company “nickname”.
Step 2: Form Your Business Entity
Once you have your company name selected, the next step is to actually form your company.
There are different types of companies or legal vehicles you may want to consider for your business, such as:
- Sole proprietorship
- Limited partnership
- General partnership
- Limited liability company
Each of these types of business structures offer different advantages and may have some disadvantages.
For example, a sole proprietorship is very easy to set up but does not offer limited liability protection.
On the other hand, incorporating a company may require more paperwork and cost more but can offer a more flexible ownership structure for those looking to raise capital.
Some will handle the company registration on their own, some will hire a lawyer to do the work, while others work with online service providers to have their company formed.
You’ll need to evaluate the objectives of your business, the complexity of your needs, your tax situation, the level of risk you will take with your business, and other factors to decide what’s best for you.
Forming your business entity with the state will require that you complete the necessary documents, forms, and pay the necessary filing fees for the state to legally “create” or form your business entity.
Step 3: Select A Registered Agent
A registered agent is an individual or company having a physical address in the state where your company does business who can receive legal notices, summons, subpoenas, or the service of process.
Typically, the registered agent must be a resident of the state where you intend to do business.
Some states allow your company to act as its own registered agent provided you have a physical street address located in the state.
Quite often, companies tend to work with companies specialized to act as registered agents allowing them to comply with the state laws by paying a nominal fee to the registered agent on a monthly or yearly basis.
Step 4: Obtain an Employer Identification Number
Once your business entity is created, you’ll need to get an Employer Identification Number from the Internal Revenue Services (IRS).
Some call EIN as FEIN (Federal Employer Identification Number).
This is a unique number issued to your company by the IRS allowing you to easily identify your company when dealing with the tax authorities or the state.\
The EIN is the equivalent of the Social Security Number for individuals.
Step 5: Do Your Tax Registrations
Another step you need to take to ensure that your company is ready to do business is to ensure that you do the proper tax registrations.
If your company is going to do business and collect taxes from its customers, you must register for the appropriate sales taxes with the tax authorities.
It’s important that you verify with the state where you are looking to collect taxes to see if you need to register for sales taxes.
Step 6: Get Your Business Licenses and Permits
As a business owner running a company, you must make sure that your business has the necessary business licenses and permits to do business.
Your business may need a license or permit issued by the federal government, the state, city, town, or county.
Typically, you should verify the need for business licenses in areas where your business operates, such as:
- Cities where it has offices
- Places where it produces goods
- Places where the company has stores
- Areas where company stores goods
Here are some examples of business licenses a company may need:
- Alarm Permit
- Building Permit
- Occupational Permit
- Seller’s Permit
- Signage Permit
- Tax Permit
- Zoning Permit
Step 7: Register A Trademark
Some business owners may want to consider registering for a trademark to protect their company name, logo, or slogan.
If your company has a unique name, or you have a slogan you do not want your competitors to replicate, you should consider a trademark.
You can register a trademark at the state level, federal level, or internationally in other countries.
To decide where to register a trademark, you’ll need to consider where your competitors are located, where you will primarily do business, and from whom you are looking to protect yourself.
Step 8: File Your Annual Returns
Once your company is duly registered, you must ensure you do what’s necessary to keep it in good standing.
One of your main obligations in keeping your company active and in good order is to file the required annual returns with the state.
Some states require you to file annual returns while others are biennial returns.
You’ll need to verify the specific requirements of the state where you registered your company to see your reporting obligation and frequency.
What Documents You Need To Form A Company
Every state will require you to file certain documents providing fundamental information about your company so they can register your business entity.
Generally, the information needed by the state to register a company includes your business name, where you’ll do business, your company ownership structure, identification of your registered agent, business establishment, officer and director information, number of shares etc.
To give you a better sense of what document you need to register a company, here is what you’ll need:
- LLC: Articles of Organization
- Limited Partnership: Certificate of Limited Partnership
- Limited Liability Partnership: Certificate of Limited Liability Partnership
- Corporation: Articles of Incorporation
In addition to the above, you may also need the following documents either to be filed with the state or keep internally in your company:
- LLC: Operating Agreement
- Limited Partnership: Limited Partnership Agreement
- Limited Liability Partnership: Limited Liability Partnership Agreement
- Corporation: Bylaws
How To Register A Business Takeaways
So what is the legal definition of How To Register A Company?
Let’s look at a summary of our findings.
How To Register A Company In USA
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