How to register a business: Essential steps for success

Once you've chosen the type of business you'll run, a business name, and a company structure, it's time to register your business.

Some business registration is required by law; others are only needed for certain types of companies based on business structure, type of business, location and other factors. Aside from compliance and requirements, registering a new business may bolster your liability protection, let you hire employees, and provide tax and legal benefits.

This article explains common types of business registration and provides a step-by-step list for completing this important task. Always check with your legal advisor before taking any steps with business registration.

A step-by-step guide to registering a business

The steps below outline some of the general steps for business registration. Be sure to check with your legal advisor and your specific state requirements to make sure you take all the necessary steps.

1. Choose your business structure. The type of structure that is best for you will depend on a number of factors, including your tolerance for personal financial risk, how you want the business to be taxed, and the type of management structure desired.

   Common business structures include:

• Sole proprietorship. As a sole proprietor, your business and personal assets and liabilities are not separate, and you may not even need to register your business.
• Partnership. This is a structure in which two or more people own a business together and share profits and losses.
• Limited liability company (LLC). An LLC is a structure in which partners, technically called members, are protected from personal liability for business debts.
• Corporation. This is a legal entity separate from its owners. It offers the strongest protection from personal liability, but the cost to form a corporation is higher than for other structures. There are two types, S and C corporations, which vary in how taxes are treated, stock can be created, and what business entities can own shares.

2. Do a name search. Before you begin the actual registration process, make sure the name you've chosen is available.

   Ways to search online include:

• Online. This can be a starting point, to generate ideas and see what other businesses in your space and region are called.
• State website. Every state has some type of business-entity name search, often on the Secretary of State website. Some states charge a fee for this service.
• DBA search. A business may choose to operate under a name different from the one it originally registered. This is called "doing business as" (DBA). Not every state requires a DBA to be registered, but in those that do, you can often search on the state website.
• U.S. Patent and Trademark Office. A trademark search may identify others doing business with the name you are considering.

3. Register your business name. Once you've confirmed that your name is available, you need to register it.

   The ways to register your business name are:

• Entity name. This offers protection on a state level and is how the state identifies your business. Regulations for how to do this vary from state to state; most states do not allow registration of a name already registered by someone else.
• Trademark. This offers protection on a federal level, and it prohibits others from using your trademarked business, service, or product names.
• DBA. As noted above, this allows you to conduct business using a different name than your formal entity.
• Domain. Registering your domain name, otherwise known as your website address, will help you do business online with your chosen business name. Internet Corporation for Assigned Names and Numbers (ICANN) maintains a list of accredited domain name registrars.
4. Business bank account. Having a business bank account is important for keeping your business records separate from personal funds and for presenting a professional profile to customers, vendors, and partners. Business bank accounts may also have features and services that can support your productivity and cash flow management. For example, business accounts may have mobile deposit features, overdraft protection, invoicing, and accounting features for tracking payments. Some banks will connect business accounts with other apps and can help with invoice and collections to lead to good cash flow in your company.
5. Consider all the costs. Discuss potential costs with your legal advisor. A partial list of costs includes fees for:
   • State business registration
   • Attorney fees
   • Business name trademark
   • DBA registration
   • Registered agent

6. Gather all your documents. When you're ready to start, research the necessary documentation for your type of registration. Requirements will vary by state, so be sure to check with your local government.

   Commonly required documents include:

• Social security number
• Personal identification (such as a driver's license or passport)
• Proof of address
• Business-specific professional licenses
• Articles of incorporation
• Certificate of Good Standing (a state-issued document verifying the legal status of your business)

Types of business registration

State business registration

The structure of your company typically dictates whether state registration is required. Limited liability companies (LLCs), corporations, partnerships, and nonprofits are usually required to register in any state where they operate. The process varies from state to state, but most states require a business to register with the Secretary of State's or another business office. Some states allow you to register online, and some states make you file paper documents in person or through the mail.

State business registration makes your business a distinct legal identity and may provide tax benefits and personal liability protection. It is also helpful when you are obtaining a business bank account and applying for financing. Your business typically also needs to be registered to hire full-time employees. In some cases, being registered in your state may provide an important competitive advantage with customers, vendors and partners.

Foreign qualification

If you conduct business in more than one state, then you may also have to file for "foreign qualification" with additional states. The term can be explained by remembering that the state you register in will consider your business domestic; every other state will consider your business foreign.

The structure of your business will determine if you are required to hire a registered agent to establish your foreign qualification. A registered agent is required if you are forming an LLC, corporation, partnership, or nonprofit organization. The agent will be in charge of receiving official papers and legal documents on behalf of your company. The agent also must be located in your domestic state.

Federal business registration

Any company that files taxes, needs to open a business bank account, or has employees must have an Employer Identification Number (EIN). An EIN is a unique nine-digit number that identifies a business for tax purposes. You can obtain an EIN from the Internal Revenue Service (IRS). Sole proprietorships with no employees are the only business structure that does not need to get an EIN.

As of January 1, 2024, many companies also have to file a report with the U.S. Department of the Treasury about the people who own or run their companies. The Financial Crimes Enforcement Network (FinCEN) is a bureau of the U.S. Department of the Treasury focused on combating money laundering and other crimes. Existing companies have until January 1, 2025 to file; a new business or a newly created company has 90 calendar days to file after receiving notice that their company's creation or registration is in effect. This is not an annual requirement, and it only needs to be done once. You can find out here whether your type of business needs to file.

DBA registration

If you are operating under a name other than your legally registered business, you are now considered to have a Doing Business As (DBA) name. For example, sole proprietor Gwen Green may choose to do business as "Gwen's Gorgeous Gowns."

If you use a DBA name, then some counties and cities will require additional registration. You can find out what is required of your business by visiting the local government's website. You can also find out if you need permits or licenses to conduct your business.

Ready to take the next step?

Registering is just one piece of making your business official. Get in touch with our team to see how we can help your business thrive. To learn more, please call 1-800-428-7463, click here, or visit your nearest Citizens branch.