Registering your small business
From the beginning you need to
ensure that you follow all the steps in registering your business to
avoid problems in the future. During registration you will make your
business official in the eyes of the federal and local governments;
you will firmly establish your business name and be launched in your
community. These are the basic steps that will ensure that your
registration is flawless.
- Establish Structure:
This is a critical step, as you will determine if your business is
sole proprietorship, partnership, etc. and will effect all further
decisions (structures can be changed later as your business grows).
If you are a sole proprietor then you will register at the
city/county level, not the state. You should check with your
individual state regulations if you have partnership business.
- “Doing Business As”:
Your small business will be registered under your name unless
you file for a “Doing Business As” name. For example, if your name
is John Smith but your business is Wacky Widgets, you will
have to file to have your business name appear as Wacky Widgets
on the registration. Do your research ahead to make sure that
this name is unique in the community and on the Internet.
- Federal and State Taxes:
The IRS has stated that new businesses, other than sole
proprietorship, need to apply for an Employer Identification Number
(EIN). If you are a sole proprietor you will use your social
security number. If your business expands beyond sole control,
employers will need to register online or by phone for their EIN.
Your EIN or SSN will be used in filing taxes for your business. The
registration for state/local taxes is similar to federal, but laws
differ between states so be sure to check the state website. The
most common state tax registration is a tax permit that allows small
businesses to collect sales tax. Sole proprietors should keep in
mind that they will report their personal and business income tax
- Additional Permits:
Play on the safe side; make sure that you have all the permits
and/or licenses necessary before opening for business. Your state
website will tell you what permits are required for business types
in your area. The most common ones include proof of insurance; I9s
(employee eligibility forms) and withholding tax forms.
Your state’s website will be
the most helpful place, as the majority of business registration can
be done online and in one place. If you are not sure what permits or
registration portions apply to you, don’t hesitate to contact your
local small business authorities. This is your small business; make
sure you register it right.