1. Decide on Your Business Structure
The structure determines taxes, liability, and registration requirements. Common types:
- Sole Proprietorship – Simple, owned by one person, no liability protection.
- Partnership (General/Limited/LLP) – Shared ownership, liability depends on type.
- Limited Liability Company (LLC) – Flexible, liability protection, popular for small/medium businesses.
- Corporation (C-Corp or S-Corp) – Separate legal entity, best for large businesses or raising capital.
Many small businesses choose LLC for liability protection and tax flexibility.
2. Choose a Business Name
- Must be unique in your state.
- Search your state’s Secretary of State database.
- Check trademark availability at the USPTO site.
- Secure a matching domain name if you want an online presence.
3. Register with the State
- File your formation documents (Articles of Organization for LLC, Articles of Incorporation for a Corporation) with your state’s Secretary of State office.
- Pay the filing fee (ranges from $50 to $500 depending on state and structure).
- Some states require publishing a notice of intent (e.g., New York LLCs).
4. Get an Employer Identification Number (EIN)
- Obtain from the IRS (free on IRS.gov).
- Required for taxes, opening a business bank account, hiring employees.
5. Register for State & Local Taxes
- Depending on your state, you may need:
- Sales tax permit (if selling goods/services).
- Employment tax registration (if hiring staff).
- Franchise or business privilege tax (in some states).
6. Apply for Licenses & Permits
- Industry-specific (e.g., food, childcare, healthcare, construction).
- City or county may require a general business license.
- Check state’s business portal or local government website.
7. Open a Business Bank Account
- Keeps personal and business finances separate (important for liability protection).
- Most banks require your EIN and formation documents.
8. Stay Compliant
- File annual reports (required in most states).
- Renew licenses and permits.
- Pay state and federal taxes.
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