Under certain circumstances, it is possible to operate as a sole proprietorship without registering your company. However, choosing to incorporate and register your company will increase customer trust and provide protections that a sole proprietorship cannot provide.
If you are still in the planning stages of your business, How to Start a Business Guide Let us help you get started.
When you’re ready, read on to learn how to register your business with state and local government agencies.
How to register your business
- Choose your business name
- Please select the business type you wish to register.
- Register for an Employer Identification Number (EIN)
- Check the requirements for each business location
- Tax registration
- Apply for a Trademark
Registering a new business, whether you are registering as a sole proprietorship or another business form, is a fairly simple process. However, it is important to register your business properly to avoid complications in the future.
1. Choose a business name
Needless to say, your online store Name Requiredand choosing a legal name that works for your business and fits your brand can be a challenge. When brainstorming business names, it’s best to start with a wide range of options and then narrow it down to your top ideas. (Need help coming up with ideas? Shopify’s Business Name Generator).
Once you’ve decided on a few favorite stores, you’ll need to check if they’re available. Search local business databases to see if there are other stores registered with a similar name.
Other important considerations Choosing a Business Name include:
- Social media. Are relevant social media handles available or is someone already using the name you have chosen?
- Domain name. Implement quickly Domain Name Search Check if a branded URL is available.
2. Select the business type you want to register
Before you register your business Choosing a Business Structure And so you incorporate. Common business structures include a limited liability company (LLC), a corporation (including C corporations and S corporations), a general partnership, and a limited liability partnership (LLP).
Check out our guide for more information on the most common business structures. The 4 most popular business types and how to choose one.
Each business structure requires a different process for registration. For example, a sole proprietorship doesn’t have to do anything, while a corporation must file articles of incorporation or a similar corporate document. If you choose an LLC, check out our state-by-state guide. California LLC, Texas LLCand Florida LLC.
3. Register for an Employer Identification Number (EIN)
Regardless of your business structure, Employer Identification Number (also called a Taxpayer Identification Number) is very important because it protects your Social Security Number (SSN) and establishes your company as a separate legal entity, which allows your company to build credit and hire employees.
EIN is IRS website.
4. Check the requirements for each business location
Just as each business structure has its own registration process and requirements, each location also has its own parameters. It’s important to check with your federal, state, and local government agencies to see what you need to legally register your business.
Additional steps may include permit requirements, licenses, articles of incorporation, forms, fees, etc.
5. Tax Registration
In most locations, businesses must pay sales tax and sometimes other applicable taxes and fees. Because sales tax varies by state, you must register in each state where you plan to sell.
Some states don’t collect sales tax, which means store owners don’t need to register their business for tax purposes. These states include:
- Alaska
- Delaware
- Montana
- New Hampshire
- Oregon
For the remaining states, check directly with them to see what the process involves.
let’s start: Shopify uses the default Tax Settings Online stores can customize their sales tax settings in the admin dashboard.
learn more: Small Business Accounting Basics: 12 Steps to Get Your Business on Track
6. Apply for a Trademark
If you are launching a brand or product with a unique name, logo, feature or slogan, you may be eligible for trademark protection. trademark It is “considered a source identifier” and helps consumers recognize brands and products.
While you can “informally” establish a trademark by running a business and building a reputation, a safer approach is to register your trademark with the appropriate trademark office, either on your own or with the help of a trademark attorney. This will protect your trademark from other companies that may try to use your idea for their own gain. At the very least, Trademark your company name In collaboration with both state and federal governments.
Business Registration Tips
As you go through the process of registering your business, there are a few things to keep in mind.
organize
Before you begin filling out your application, make a list of what you will need. This includes basic personal and business information, your EIN, forms, licenses, permits, fees, etc. Have this information on hand to help you move through the application process smoothly.
Hire Help
For more complicated business registrations (e.g. in highly regulated industries), we recommend getting professional help. A qualified tax professional or business lawyer can guide you through the process, answer your questions along the way, and even take care of some steps for you. Shopify Partners We provide a directory of tax professionals who can provide assistance with US state sales taxes and responsibilities.
Keep it up to date
We always recommend checking directly with official local and industry-specific sources for the most up-to-date information regarding business registration requirements. Make it a habit to review your licenses, permits, and registrations annually as a form of accountability and reminder. At the time of tax paymentSet calendar reminders for expiration and renewal as well.
Start your business with Shopify
Once you know how to register your business, you can start thinking about how to run it. Shopify provides tools and integrations that make it easy to manage every aspect of your business. Choose from thousands of third-party apps and integrations to build a virtual business command center.
Disclaimer: These guides are for informational purposes only and do not constitute professional legal or tax advice. Please consult independent legal and your own tax advisors for information specific to your country and situation. Shopify is not liable in any way for your use of or reliance on these guides..
How to Register Your Business FAQ
Can I operate a business without registering?
If you operate as a sole proprietorship, you can operate your business without registering. No formal procedures are required before you can make your first sale. Over time, as your business grows, you will need to register and incorporate.
Is it important to register your small business?
Registering your small business isn’t required, but it makes it easier for consumers to recognize your business as a legitimate business and may be required for financial purposes, like qualifying for a loan.
Do I need to register my small business with the IRS?
While you probably won’t need to register your business with the federal government to incorporate, registering with the IRS will give you a federal taxpayer identification number, which protects your personal identity and can help you apply for business credit and open a bank account.
How much does it cost to register a business?
The costs of registering a business, which usually involves an application fee, vary from state to state and may be higher or lower depending on the business structure you adopt.
