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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