This information is provided for informational purposes only and should not be construed as legal, financial, or tax advice. Readers should contact their attorneys, financial advisors, or tax professionals to obtain advice with respect to any particular matter.
If you’re like most entrepreneurs, you likely dream of the independence, freedom, and profitability that come from launching a new business. However, there are a lot of administrative tasks and paperwork you need to settle before making that first sale. One of the most important steps is registering your business with relevant local, state, and federal agencies.
What does registering a business entail, and how do you get started? Continue reading to learn more.
Business registration requirements vary from state to state (and even from city to city). Below is a broad overview that outlines the most common steps involved. For more precise guidelines, contact your local tax office and city hall. In addition, you should only register your small business after you’ve completed preplanning steps – e.g., sizing your market, developing a product, and writing a business plan. For help with these areas, read our article on starting a small business.
Once you’re ready, here are the steps to register a business.
When starting a small business, you have several incorporation options from which to choose, including:
All businesses need a physical address to receive relevant tax and legal paperwork – whether the startup is brick-and-mortar, online, for-profit, or charitable. Many entrepreneurs use their home addresses in the beginning. You might have to do the same in the early days when resources are limited. As your business grows, you may eventually want to rent a commercial space with a separate address. Renting a P.O. box can also help add some professionalism and legitimacy if you’re reluctant to use your residential address.
You have a lot of leeway when it comes to business name registration. In some jurisdictions, you can even use an existing name – provided that no one from your niche or industry has already claimed that brand.
In addition, many states allow you to submit a “doing business as” or “DBA” name, which is sometimes different from your legal or registered name.
The next step involves applying for an Employer Identification Number (EIN) with the IRS. An EIN is basically a Social Security number for your business. Besides being a legal requirement for payroll and tax purposes, you also need an EIN for everything from opening a bank account to applying for loans to qualifying for wholesale pricing. Fortunately, the IRS makes obtaining an EIN easy with its online application form.
In addition to an EIN with the IRS, you’ll need to register your business with other federal and state agencies for tax, payroll, and unemployment purposes. Again, many cities require permits and licenses depending on the nature of your business. This is because zoning laws and noise ordinances are normally managed at the municipal level.
Registering with the U.S. Small Business Administration (SBA) is strictly optional, but it’s a good idea. The SBA offers countless resources designed to help small business owners get their ventures off the ground. Once enrolled, you’ll be on the inside track for any number of grants, loans, and other lucrative opportunities to help grow your business.
If you come from an underserved or underrepresented group, your small business might qualify for special designations that allow you to access branding, financing, and consulting resources that aren’t normally available to the public. This is why you often see businesses promoting how they are:
Although applying for these designations requires a little extra paperwork, they can help open doors and make it easier to develop important connections that fuel your business’s long-term growth.
Registering a new business may take several weeks (or months) before all of your paperwork is in order. Once you are set up, we can help you tackle the next important step – i.e., making your first sale.
At Clover, we specialize in a range of POS and payment solutions designed to help you run your business easier, faster, and smarter. In addition to PCI-compliant payment acceptance, our POS solutions come with:
To learn more about our suite of payment solutions and business resources, schedule a free consultation with our merchant services team today.