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 together.
- 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.