How To Register a Business in the US: A Comprehensive Guide

Building a thriving business is challenging. There are countless obstacles along the way. But the first step to success is registering your company.

Registering a business gives you the recognition and legal protection you need to operate. This guide breaks the process into manageable tasks so you don’t miss any details. 

Here’s how to register a business in the United States, from choosing a name to the final application. 

5 Benefits of Registering Your Business

While correctly registering a business takes time, it sets you up for success in these ways: 

1. Legal Recognition. Your business will be a recognized legal entity. This means it can access unique legal rights and protections, like financial help. You can also enter into contracts and open business bank accounts without roadblocks.
2. Financing Opportunities. Banks and investors prefer lending money to registered businesses. That means you have a better chance of getting funding or a loan.
3. Limited Liability. Some structures separate personal and business finances. You’re protected as an owner if something happens to the business.
4. Improved Credibility. Registration shows you’re legit. Customers and other businesses will feel more comfortable working with you. They can see you take the business seriously.
5. Tax Benefits. Registering your business gives you tax benefits. These help you save money.

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How To Register a Business in 9 Steps

Here’s how to open a company in the US

1. Choose a Business Structure

Business structures define how a business operates and how the government recognizes it. Your choice of structure affects everything from taxes to personal liability.

Take your time to decide which legal structure is right for your business. Make the best choice for both present and future needs. You can change structures later, but it’s best to avoid that to save time and money. 

Let’s explore some of the most common types of business structures:

• Sole proprietorships are businesses that a single person owns and manages. That person has complete control and oversight over the company. This business structure is easy to set up. But the owner assumes all liability for financial and legal obligations, which is a con for some.
• Partnerships are owned by two or more people. The owners split liability according to their investments.
• Limited liability companies (LLCs) are legally distinct from their owners. Single individuals or partnerships can be at the helm. LLCs shield owners from liability, placing it on the business itself.
• Corporations are independent businesses owned by shareholders. They raise money by issuing shares. But they’re more complicated to run. This option is best for large companies with lots of resources.
• Nonprofits focus on social causes rather than generating profits. Earnings are tax-exempt, but they have to go back into the organization.

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2. Select a Location

Once you know which business structure best fits your company, select a location. Most of the steps in US company registration ask for an address. That address should stay consistent throughout the process.

Don’t worry if you don’t have a brick-and-mortar retail or office space. You can use a virtual or home address.

3. Decide on a Business Name

Your business needs a name so the government and other businesses will know who you are. You’ll also stand out from the competition. Choose a descriptive but unique name to help people find and recognize you.

Learning how to license a business name helps you make sure nobody else claims it. Use the US Patent and Trademark Office’s (USPTO) search tool to see if the name is available. Review the instructions and fill out an online application to register it as a trademark. 

It’s also a good idea to make sure your name, or a close variant, is available on websites and social media. Otherwise, customers might struggle to find you. For example, if invoicesimple.com is taken, you could use tryinvoicesimple.com.

If you plan on operating under a different name than the one you registered, you also need to file a “doing business as” name (DBA). This also applies if you’re a sole proprietor and your business name isn’t the same as your given name. Register the name at the county, state, or local level.

RELATED ARTICLE — How to Keep Track of Invoices & Payments 

4. Get an Employer Identification Number (EIN)

The next step to register a business is getting an employee identification number, or EIN. Like a social security number (SSN), an EIN identifies your business when it comes to banking and taxes. And like an SSN, you should keep your EIN safe to lower the risk of identity theft and tax fraud.

You can get an EIN by applying online on the IRS website. If accepted, you’ll receive it immediately. 

5. Apply for Licenses and Permits

Along with setting up details like name and ID number, you need licenses and permits. Application varies based on location and industry, but the steps are similar:

Determine Which Licenses You Need

Start by researching which licenses and permits apply to your business. Use guides like the Small Business Administration (SBA)’s license finder tool. Common licenses include local business licenses and food permits. 

Review Instructions

Next, read through each agency’s instructions. Details like forms and display requirements may vary depending on the state. Some areas also have their own specific regulations and guidelines. 

Take note of any differences and contact issuing authorities if you have questions. It’s worth clarifying now and avoiding any mistakes later.

Compile Documentation

Most license applications request documentation. These often include zoning approval, an EIN, and a business plan. Collect everything you need. Make copies so you always have one for reference.

Calculate Fees

There will be fees when applying for permits, so budget accordingly. 

Wait

After submitting your applications, allow plenty of time for processing and approval. It will take longer if you’ve submitted during a busy time, like the fiscal year’s end.

Many issuing agencies post their wait times online. If an application is taking longer to process than the average, it doesn’t hurt to contact the agency for an update.

Display Licenses

Some licenses need to appear on or in your business location. These include building permits and liquor licenses. This is the law, so research guidelines to avoid making compliance mistakes.

6. Register With State Authorities

With permits and licenses in hand, you’re ready to make your business official. This requires:

• Registering With Your State. Registering your business with the state depends on your business structure. LLCs and corporations need articles of organization or incorporation. Sole proprietors may only need local business licenses.
• Registering for Taxes. Depending on your structure, register for federal, state, or local taxes. This lets you pay taxes in full compliance with the law.
• Buying Insurance. You may need to prove that your business has various types of insurance. This includes general liability insurance for injuries or damages.

These steps are the most common. But there may be location-based requirements, such as meeting municipal zoning regulations. Check with the Secretary of State’s office and other agencies to make sure you meet all requirements.

7. Set Up a Bank Account for Your Business

With filing and registration complete, turn your attention to day-to-day necessities. This includes a bank account.

While you can use a personal bank account, a dedicated business account is often a better choice. It provides:

• Legal Protection. Using a business account shields personal assets from any claims against the business.
• Separation of Personal and Business Finances. Commercial accounts streamline tax reporting and track company cash flows and receipts.
• Credibility. Official business accounts look more professional. 
• Smooth Payments. Banks offer extra features for businesses. These include business debit and credit cards and invoicing capabilities.

Fees and features vary between banks. Compare options to avoid overpaying or missing out on features.

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8. Comply With Regulations

The work doesn’t stop once you have a registered business and bank account. Adhere to the legal rules and industry standards in your jurisdiction. This shows your business operates in a safe and ethical way, which helps you:

• Avoid legal penalties 
• Keep your license 
• Build relationships with customers and contacts 
• Signal responsibility and competence 
• Unlock funding 

Check the US Small Business Administration to check what location-based standards to meet and any other requirements.

9. Understand Tax Responsibilities

Tax compliance is a huge responsibility. Pay attention to it year-round—not just during tax season. 

Careful tax compliance helps you:

• Build credibility with government regulators
• Claim deductions
• Avoid fees 

Organize Your Finances With Invoice Simple

Your business is registered and ready. Now, streamline your other process—like invoicing.With Invoice Simple, you can bill clients easily and stay on top of unpaid invoices. The all-in-one tracking solution works for you so you can work on your small business.