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How to Register a Business in the US (Step by Step Guide)

December 21 - 6 month before blogpost

If you are a business entrepreneur from the USA and want to start your own business, then it is important to know the entire business registration process in the USA. When the business owners register their business in the USA, then it gets registered as a legal entity. The business assets also get legally secured when it gets registered. Registered businesses are considered as a more stable entity and the best practice for every business is considered as to register the business as you begin your entrepreneur journey.

Starting a new business venture is a million-dollar idea. When you start your business, you need to formulate the business plan and research the target market. You should also make your business website ready to start your business journey. By registering your business, you can safeguard it against liabilities. If you want to know the complete business registration process, then read the blog further.

Here we are going to discuss the importance of business registration along with the complete procedure to register it.

Why You Should Register Your Business?

Registered businesses are considered more legitimate, but there are still certain business activities that can only be performed only by registered businesses. Now let us know the reasons why you should register the business:

  • Protection of Personal Liabilities

Business registration can protect your assets from bankruptcy and debt. However, the liability level of the business depends on the type of business. As an example for registered businesses, the partnership and sole proprietary are not considered as separate entities. In both types of the owner is responsible for bankruptcy or debt.

However, LLC (Limited Liabilities Companies) and corporations are separate from their owners. If these types of businesses get failed or go into debt at any time, then still their finances will get protected.

  • Business Legitimacy

When an investor wants to invest in any business then he/she makes sure business legitimacy. Registered businesses are considered as more legitimate businesses and it becomes easier to raise funds for such businesses. Investors do not prefer to choose any unregistered businesses. The businesses can rest assured that their businesses are completely secure for their clients.

  • Hire Employees Legally

If you want to hire employees for your business, then you can easily do so legitimately if your business will be registered. You need to get State Identification Number or EIN to help the businesses to formulate the payroll of their employees.

  • Business and Brand Protection

When you register your business, you protect your brand name. By doing so you can rest assured that your business brand name will not be used by anyone else. However, if you will not register your business name then any competitor can misuse it that can make your customers confused.

So, now you know the reasons or benefits of registering your business now is the time to know the registration process. In the next section, we are going to discuss the steps to register your business in the USA.

Steps to Register the Business in the USA

Step 1: Writing a Business Plan

The first step to start a business is to write a business plan. The document has a complete business outline describing business goals, your plan to attract clients and investors. If you have not chosen any business name so far then by making this plan you can choose the same. A business plan also helps you to know the business structure that you need to establish.

Step 2: Business Location Identification

It is important to decide your business location depending on where you are based out. The business location matters to decide the tax and the exact steps you need to take for business registration. Your location will also decide the target market so as per the location of your business the marketing campaign is planned.

Step 3: Decide business Structure

Before registering the business, you would need to decide which type of business you are going to start? A business can have the following structures:

  • Sole Proprietorship

For the business sole proprietorship, you are liable for all business finances. In these businesses, the business and personal assets get intertwined. It is quite simple to establish such businesses.

  • Partnership

When two or more individuals want to run a business together, they need to register it under the partnership. Depending on the type of partnership one partner must take care of personal liability while the other has limited liability. However, in the case of a general partnership, both partners have to share the same liabilities.

  • Corporation

Corporation functions as a separate entity from owners. They are in themselves a legal entity means they are free from personal liabilities. But the corporations involve more tax requirements and federal reporting. If you want to open your business for the shareholders, then this is the best option.

  • LLC (Limited Liability Corporation)

The owners of LLC can keep their personal and business assets separately. LLC owners can easily pass their taxes through their income level.

Step 4: Registration of Business Name

Before you choose the business name you should make sure that the name should not be taken already by any business. For this, you can check the Website U.S. Patent and Trademark Office to ensure this. You can also search in Google to know about this.

Step 5: The final step for registering the business

The final step for registering the business involves obtaining the necessary permits to execute business operations. For this you can follow below steps:

  • IRS Registration: To file the taxes the businesses must receive their EIN.
  • Stat Registration: Depending on your state check the basic requirements like documents and fees to register the businesses.
  • Local Registration: This step is not essential for all the places but at some places, you may be asked to have a local permit.
  • Trademark Registration: Business trademarks are also used for business recognition. You can either use a business logo or word or phrase as a business trademark.

Final Words

Business registration means protecting your business and personal assets. In the USA business registration can make it a distinct legal entity and it becomes accountable for debts. You can even conduct your business operations without risking your assets. Business registration is a compulsory and important step for every business to stay safe and secure.

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