How to register a business and legal name in 5 steps
You have a promising idea, you’ve done the market research, and now you’re ready to start your business. The next step is to register your business entity with the correct government agencies and get all the documentation squared away. Every founder will go through a slightly different process, depending on your business location and which business structure you select.
How you register your new business will determine how you file taxes and apply for lines of credit. While certain business structures protect your personal assets from risk if the company struggles or fails, others do not.
You’ll also need to give your business a clear and compelling name. This guide covers how to register a business name—or several. As you'll see, there are some advantages to using different names for legal, financial, and branding purposes.
We've distilled the complex guidelines on how to register a business down to five key steps.
1. Choose a business structure
There are four main business structures, and each has its own benefits. How you formally organize your business has wide-ranging effects. It’s the determining factor for your record-keeping requirements, tax benefits, and even the cost of maintaining your business.
Flexibility is also essential. You need to consider your company’s current needs and your vision for the business. Do you already have interested investors? Is your ultimate goal to sell your business? The answers offer guidance on the type of business entity that’s best. The U.S. Small Business Administration (SBA) also has helpful information on the different business structures. Here’s an overview:
- Sole proprietorship: If you don’t register as another kind of business entity, you’re considered a sole proprietorship. Your personal and business finances are intertwined, which also means that you can be held personally liable for business debts and liabilities.
- Limited liability company (LLC): An LLC is another popular type of organization. It protects your personal assets, although you’ll have to pay self-employment taxes.
- Partnership: A partnership is a solid option if your business has multiple owners. Partners can have different levels of liability and protection from business debt.
- Corporation: A corporation is legally distinct from its owners—able to make a profit and be taxed as a completely separate entity. It offers more personal protection than other structures but imposes additional reporting and legal requirements. Startup founders often incorporate their small businesses because they can then raise funds by selling stock.
2. Register your business with the state
To organize your business as a partnership, LLC, or a corporation, you have to register with your state. Generally, Secretary of State offices manage business registration. In some states, you can easily register online, while others require you to file documents by mail or in person.
Once you’ve found your state filing office, you’ll submit business information and pay registration and filing fees, typically ranging from $50 to $200. The business structure determines the documents you need to present. For example, if you’re organizing as an LLC, you’ll submit articles of organization, while corporation owners must provide articles of incorporation.
These documents should contain details like business name, business location (the mailing address you’ll use to receive important documents), owner information, and more. Refer to your state’s or locality’s guidelines for specifics.
Keep in mind that you need to register in any state where you conduct business, not just the state where your business is physically located. If you frequently meet with clients, generate a significant portion of revenue, or have employees working in a different state, you’re technically conducting business there. Find instructions on registering in multiple states on the SBA website.
3. Select and register your business name(s)
Among all the stresses of starting a business, choosing a name is one of the more exciting moments. Your business name is your most significant identifier. Once you’ve deliberated and landed on one that feels right, you don’t want a competitor to take it. As you learn how to register a business name, keep in mind that requirements differ by state, county, and city. Your state government’s website is your best resource.
In most cases, you automatically register your business name when you file registration documents with the state. Search your state’s name database to make sure the name isn’t already registered. Then, submit a name registration form and pay any filing fees.
At that point, your business name is legally protected, and no other business in the state can use it. But you may not want to use your legal business name. Most states require that you add a suffix to your legal business name—also called an entity name or registered business name—that indicates the type of business structure. A corporation, for example, might have to attach “Inc.” or “Incorporated.” An LLC, on the other hand, must add “LLC,” “Limited Liability Company,” or another approved title.
You may need to explicitly describe your goods or services, naming your company “Green Thumb Lawn Care & Home Maintenance LLC” instead of the catchier “Green Thumb LLC.”
Registering a “doing business as” name
If your legal name doesn’t have the right ring to it, don’t worry. You can also register a “doing business as” name (DBA). A DBA is also known as a fictitious name, assumed name, or trade name. Business owners have a little more creative license with trade names, and no suffixes are necessary.
Applying for a DBA is relatively simple. You’ll typically file paperwork with your county clerk's office. Once a DBA is approved, it’s usually published in a local newspaper. It’s also important to know that multiple businesses can use the same DBA. Find more detailed information on registering DBAs.
Why sole proprietors use DBAs
Sole proprietors depend on DBAs for a few key reasons. First of all, a sole proprietor will need a DBA if they don’t want to use their legal name in the name of their business. Imagine a sole proprietor named Eliza Judd, who owns an event planning business. If she doesn’t want to do business as “Judd Event Productions,” she needs a DBA.
Also, most banks require that sole proprietorships have a registered DBA to open a business bank account. This is a crucial first step in building business credit and securing financing. You’ll also need a business tax ID number, which we’ll review later in this guide.
Registering a domain name
In addition to the above steps, you need to buy a domain name to register a business for ecommerce. This will be your business’s URL, the web address where you’ll send customers.
Visit an accredited domain name registrar, such as GoDaddy or Namecheap, to purchase one. It may be a challenge to get a domain name that perfectly matches your business name, so start looking soon.
Applying for federal trademark protection
If you plan to provide your product or service nationwide or even internationally, it’s a good idea to apply for a federal trademark. You can trademark items like a business name, a logo, or a slogan—the building blocks of a successful brand. The United States Patent and Trademark Office (USPTO) provides details on how to handle trademark registration.
4. Request an EIN from the IRS
Your business more than likely needs an Employer Identification Number (EIN), also called your Federal Tax ID Number. An EIN is used to hire employees, set up payroll, pay federal taxes, and more. The IRS provides a simple five-question quiz to help you determine if you have to register. Applying for an EIN is free and can be done online.
Even if you aren’t required to get an EIN, you’ll want one soon enough. That’s because it’s essential to building business credit. Generally, you can’t open a business bank account—or get a business credit card—without an EIN. Banks and financial institutions often require sole proprietors to have an EIN and a DBA to apply.
A business will also need an EIN to open a business credit card or corporate credit card like Brex. Using a business credit card responsibly is an age-old method of demonstrating creditworthiness. This unlocks crucial funding opportunities for new entrepreneurs. Finally, an EIN is necessary to receive certain business licenses and permits.
5. Apply for other tax IDs, business licenses, and permits
Not all businesses have to pay state and local taxes. For example, income tax is one of the most common small business taxes, but seven states don’t require it. That means you’ll need to do some research to determine whether you need a state or local tax ID number. Your state government website can answer specific questions and outline application steps.
Businesses need federal, state, and local licenses and permits to operate. The SBA has a helpful list of industry types regulated by the federal government.
In general, local government—your county or city—sets permit and licensing requirements. This includes guidelines for getting professional and occupational licenses, like a cosmetology license or liquor license.
You'll also need to apply for specific permits to get up and running, like a sign permit to display your business name on your store. Search your local government website to make sure you're on the right track.
Final tips on how to register a business
If the process of registering a business seems a little daunting, remember that you're not alone. The U.S. Small Business Administration website offers step-by-step information on how to register a business the right way. Also, visit Nolo for straightforward legal guidance and business advice. Finally, your state and local government website is the best source of information. If you have questions, reach out.