One of the first steps of starting a business is the business registration process. It is a quite difficult process that will take a lot of time. Business registration requires a lot of paperwork, tax preparation, and research. However, knowing the steps of business registration can make the entire process easier and more pleasant. Here are some important aspects you should know when registering your company.
1. Consider whether you really need to register your business
Depending on several factors you may or may not need to register your business. If that is the case, you can miss the business registration step and concentrate on making money. If you manage your business yourself and use your own legal name, then registration is not a must.
However, if you decide to skip registration, you may not receive many benefits. For example, if your online store is sued because your soap caused an allergic reaction, then you will not receive legal protection. In the case of financial problems, the limited company will be responsible for your debts. There are many tax benefits that you may take advantage of.
2. Register with local, state, or federal agencies
It is not necessary for all companies to register with the federal government to become incorporated. Most companies will work with state or local agencies. The only cases when you may need to contact the federal government are:
- To trademark the company’s product name or brand with the patent office
- Applying for tax-exempt status for a non-profit corporation
3. Identify the legal company name
The name of your company is what will define you. Choosing the company name is one thing but registering it is a whole other affair. The legal name is your full name if you are the only owner or sole trader. When a company has two owners, then the legal name is the last name of partners or names from the partnership confirmation.
Before you chose the legal company name you must be sure that it has not been taken by anyone else.
4. Get your federal tax ID
All registered businesses must apply for federal tax IDs. Most jurisdictions give ID to understand who the businesses are, help with tax-related questions, and ensure proper tax collection. But, do you need to get a state tax ID? No, if you pay state taxes. But if you want to use state functions like protecting your company against identity theft then you need a state tax ID.
5. Find a registered agent
As a registered company, you need to obtain the services of registered agents before filing your information. It is an important part of the process since they receive official papers and legal documents. Many business owners prefer to work with business registration gents instead of dealing with the paperwork themselves.
6. Fees and documents
You will pay about 300$ registration fees. But the fees really depend on the type of your business and the jurisdiction’s requirements.
The documents you usually need to provide are our business name, location, registered agent info, number of shares, and ownership structure. But the documents may vary depending on the type of your business.
7. People employing
You must register a company if you are hiring workers. You must establish a contract with workers. This contract must include employment rights, conditions, duties, and responsibilities. This is crucial for a registered business.
If you want to sponsor temporary workers or hire workers from another country, then not only corporate registration is necessary. You also need to go through the legal hoops.
