How to Register a Business in 6 Steps: A Guide for 2022

disavowal : This article is for informational purposes alone, and doesn ’ t constitute professional legal advice. We are not apt to you in any way for your use or reliance on this article .
It ’ south all-important that ecommerce entrepreneurs know how to register a clientele, particularly at the startle of their entrepreneurial travel .
once your on-line shop has been registered as a legal entity, you ’ ll be protected if any of your customers, or competitors, decide to file legal action against you .
If you ’ re new to the concept of registering a business, the think can be quite daunting. We ’ ve created this article to walk you through all the necessity steps which you ’ ll indigence to consider when you ’ re registering a little business in the US.

You ’ ll soon know how to register your business and get the stability and legal security which individuals who are just starting an on-line business motivation .

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Do I Need to Register My Business?

Although you can run a commercial enterprise without registering it, it ’ s a dependable theme to incorporate it as your business grows. Registering businesses makes them official in the eyes of the government, and it ensures both your personal and clientele assets are legally guarantee .

Steps to Register a Business

Registering your commercial enterprise international relations and security network ’ t complicated, but it does require you to take the right steps. The operation to register as a legal entity involves :

1. Naming Your Business

Every ecommerce entrepreneur will need to take the first footstep towards registering their business by deciding on a name for their on-line shop .
It ’ s essential that you come up with a memorable name for your on-line store– something which is going to catch the eyes of your consultation and leave a lasting impression. Make indisputable that the name is related to your niche, and something which you ’ ll be able to build a market strategy around .
Coming up with a business list that will stand the test of time can be slippery. Check out some of your competitors and analyze the types of names which they use. Make a note of the ecommerce clientele names which you like and then think about how your mind compares with it. Does your estimate stand out from the push ? If not, what can you do to make it unique ? You can besides use a business name generator to get ideas for your company list .

2. Registering a Business Name

once you ’ ve come up with an amazing name for your ecommerce business you ’ ve already overcome one of the most unmanageable parts of registering a business. It ’ south critical to make sure that your occupation identify international relations and security network ’ deoxythymidine monophosphate already registered with the United States Patent and Trademark Office ( USPTO ). The USPTO will automatically reject any registration for a occupation name that ’ s already registered in their system. You ’ ll besides lose any work fees from the application .
To avoid any of these problems, research your local anesthetic business directories to verify if the business name you ’ d like to use is available. You can besides use USPTO ’ s free tool to check if your clientele list is available .
Future-Proofing Your Business Name
When you ’ ve found a memorable business name that is available, take some meter to think about the long-run goals of your business. Do you think that the name of your business is future-proof ? Will it stand the test of fourth dimension ?
Try to avoid choosing a commercial enterprise name which stems from a current course. If you were to name your ecommerce business ‘ Selfie Stick Corporation ’ you may see success initially, but how popular will your business be in the following few years ?
It ’ randomness important to consider the staying-power of a name before you register your occupation, as it ’ ll be inconvenient to change your diagnose late on. Changing your mention once you ’ ve created an established ecommerce business is a harass legally, and can besides lead to confusion for your existing customers .

3. Picking Your Business Entity

After you ’ ve decided on a identify for your ecommerce occupation, you ’ ll need to choose the type of business entity which best fits your on-line memory. There are two independent options ; registering your business as an LLC, or internalization. There are distinct differences between these two options, so we ’ ve broken down the key points which you ’ ll need to know thus you can make the best decision for your ecommerce business .
Setting up your business as an LLC will require less paperwork than it would if you were to incorporate, which means that you ’ ll have more time to focus on getting your store off the grind .
When you ’ ve registered your business as an LLC, you won ’ metric ton be personally apt for any debts which your company accumulates. This means that your personal assets like your savings, car, and house will be wholly safe if anything were to happen to your party .
Another benefit of choosing to register as an LLC is that you ’ ll be able to rent your personal assets to your clientele. For exemplar, if you run your ecommerce business from a home agency, you ’ re able to claim that distance as a business expense. You ’ ll save some extra money by doing this which you ’ ll be able to put into other aspects of your business .
When most think of corporations they think of multi-million dollar companies with hundreds of employees, but incorporation merely means that you ’ ll develop from a lone proprietorship into a caller which is formally recognised as a legal business entity .
There are two independent options which businesses can choose when they are incorporating ; registering as an ‘ S ’ corporation, or a ‘ C ’ corporation. There are no prerequisites to registering as either, it ’ s all down to which choice is better for your ecommerce commercial enterprise .
Registering your ecommerce clientele as an ‘ S ’ corporation will give you the choice of ‘ pass-through tax income ’, which means that your ecommerce business will not be taxed on a business level. alternatively, you ’ ll pay income tax on the gross that your ecommerce business generates, but not the actual business itself .
On the other hand, ‘ C ’ corporations are considered as a classify entity when it comes to taxation. This means that your ecommerce business will be subjugate to ‘ double-taxation ’, which means that you ’ ll be taxed on your clientele ’ profits and you ’ ll still be taxed on your personal income .
Whichever structure you choose for your business entity, bare in mind that it isn ’ metric ton set in stone. As your business matures you ’ ll be able to move from one social organization to another depending on the needs of your ecommerce business .

4. Choosing the State You’ll Register In

Take some time to consider in which state of matter you ’ ll cash register your ecommerce business. The tax rates vary from submit to state. however, you aren ’ thyroxine required to register in the country where you operate your small business.

Registering a newfangled clientele in a state which has low, or non-existent sales tax rates makes a draw of smell as it ’ ll save you money down the road. Amazon, one of the biggest on-line retailers in the populace, takes advantage of this choice .
Have a look through each country ’ mho tax rates and decide which state is best to register in for your business ’ goals and immediate needs. Some states have no sales tax, so they don ’ t have a adjustment routine. Examples include :

  • delaware
  • Montana
  • oregon
  • alaska
  • New Hampshire

For other states, check with their local position to find out what the registration process comprises .

5. Obtaining Your Business’ Federal Tax Number

Obtaining Your Business' Federal Tax Number
You besides need to register your clientele on a federal level. To do this, you ’ ll need to obtain a federal tax number for your ecommerce clientele. Your federal tax phone number is besides known as an employer designation number ( EIN ), and it ’ s the equivalent of a social security number for your occupation .
As you ’ ll be filing tax returns and submitting reports on your business activity, it ’ south essential that you get a EIN count for your business. Without this number, you won ’ deoxythymidine monophosphate be able to submit your tax forms to either the federal or the express government .
You can apply online for your ecommerce business ’ EIN number. It ’ s a dim-witted application form and you ’ ll be able to get your EIN numeral on the same day that you submit the on-line form .

6. Opening a Business Bank Account

Banks in the US require documents of little business adjustment before they will allow you to open up a occupation bank account. It ’ second all-important that ecommerce entrepreneurs know how to register an on-line business if they are looking to open a business bank account .
As an entrepreneur, you ’ ll find that opening a business account is a capital direction to separate your personal finances from those which you ’ ll be using to fund your ecommerce business. Having a business account is besides apt for tax reasons– you ’ ll be able to invoice sealed payments and claim them as occupation expenses .
Opening a business account will give you a clear idea of the sum of money which your business is costing each calendar month, and you ’ ll know the demand come of money which your ecommerce business is making .
It ’ ll besides give your ecommerce commercial enterprise more professional credibility. Customers will make payments for orders to your business account, rather of your list. This eminence instills confidence in your customer that your business is legitimate .

How Much Does It Cost to Register a Business?

There ’ s no cost to unofficially register a modest business, but you may have to pay sales tax depending on the submit you choose to incorporate in .

Summary: How to Go About Registering a Company in 2021 

immediately that you ’ ve read how to register a commercial enterprise you can go ahead and get started on running a lawful ecommerce commercial enterprise. once you ’ ve completed the adjustment action we ’ ve detailed in this article, your occupation will be considered as a legal entity. And you ’ ll formally be the owner of a professional business .
In summary, hera are the 6 steps to register a business :

  1. Choose your business name
  2. register with the USPTO
  3. Select your business entity
  4. Decide on the state you ’ ll cross-file in
  5. Obtain your Employer Identification Number ( EIN )
  6. Open a business bank account

If you have any promote questions regarding the legalities of registering a business in the USA, equitable drop us a line in the comments section. Remember, all questions are good questions !
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