Business Registration & Other Legal Requirements

There is no standardized way to register your business across the nation. Each state has its own rules regarding registration, both of a business and of its name. In most cases, the registration of a business involves several steps, including registering the business as the appropriate form, registering a business name, registering for licenses and permits that are necessary both within the industry and in the applicable jurisdictions, and registering with tax authorities. The structure that you choose during the formation of the business will dictate, in part, the types of registration that need to be completed.

Choosing Your State

When your business is an LLC or a corporation, it is necessary to choose the state where you will file paperwork to register your business. A corporation registers in order to create a legal entity that is separate from the individual owners or shareholders of the business and to protect the owners from legal liability. Most corporations incorporate in the state where the corporation plans to conduct most of its transactions. There are certain states, such as Delaware, that offer favorable tax treatment, and some corporations prefer to incorporate in those states. In order to incorporate, the corporation needs to file formation documents with the Secretary of State's office.

Licenses and Permits

Businesses need to acquire any necessary licenses or permits to operate. These can include professional licenses for doctors or permits related to a home business. They can also include zoning permits to ensure that the business can be run in the desired location.

Registering the Business Name

Your business form will also determine whether you need to register your business name. If you are operating a sole proprietorship under your own name, you would likely not need to register the name. However, if you are starting a limited partnership, LLC, or corporation, or if you are doing business under a fictitious name, the situation is more complicated. Among other things, you may want to consider whether the name that you are choosing has been trademarked, since you will want to avoid trademark infringement. However, in most states, you are registering your name when you file articles of incorporation or organization, or a statement of limited partnership with the state filing office, and other businesses will not be able to use the name once you file.

People selling products or services under a name other than their own must file a fictitious name statement or assumed name certificate. In most states, these documents can be filed with the Secretary of State or Department of Corporations, but you should check your own state's rules. Each state has its own requirements for fictitious or assumed business names, but generally, most banks will not open an account under the business name without proof of registration, and you will also not be able to enforce contracts signed under the fictitious business name without registering.

Trademark Protection

While there is no legal requirement to do so, you can also register your business name with the U.S. Patent and Trademark Office and with your state as a trademark to provide an added layer of protection. It can be harmful to have your business' brand confused with another business' brand. Registering a trademark protects a business in case a different business later uses the same business name or a confusingly similar name.

Tax Registration

Whether you have employees or any partners will dictate what you need to do in terms of tax registration. People who operate a sole proprietorship will file the business' taxes as personal taxes and may use a Social Security number to handle financial matters for the business. However, if you have a business with employees, regardless of the structure of the business, you will need to apply for federal and state tax IDs. You will also need to pay quarterly estimated taxes and possibly collect sales tax.

Last reviewed October 2024