Starting a business is an exciting venture, but before you begin operations, it’s important to make your business legal. Registering your business properly ensures you’re complying with local laws, protecting your brand, and setting yourself up for long-term success.

Decide on a Business Structure

Your first step is choosing the right business structure. Common options include sole proprietorship, partnership, limited liability company (LLC), and corporation. Each structure has different legal and tax implications. Many small businesses start as sole proprietorships or LLCs because they’re simpler to manage and offer some liability protection.

Choose a Business Name

Pick a name that’s unique, easy to remember, and not already in use. You’ll need to check with your local business registry or secretary of state’s office to confirm the name is available. In some cases, you may also need to file for a “Doing Business As” (DBA) name if your trade name differs from your legal business name.

Register with Local Authorities

Once you’ve chosen a name and structure, you must register your business with local government agencies. This process often varies depending on your location. Generally, you’ll need to file the necessary paperwork with your state or municipal office. If you’re forming an LLC or corporation, you may need to submit Articles of Organization or Incorporation.

Apply for a Federal EIN

An Employer Identification Number (EIN) is like a social security number for your business. You’ll need it to open a business bank account, hire employees, and file taxes. You can apply for an EIN for free through the IRS website. Even if you're a sole proprietor, it’s a good idea to get an EIN for privacy and administrative reasons.

Obtain Required Licenses and Permits

Depending on your industry and location, your business may need specific licenses or permits to operate legally. This might include a general business license, health permits, zoning permits, or industry-specific certifications. Check with your local city or county office to see what applies to your business type.

Register for State and Local Taxes

You may be required to register for state taxes, especially if you’re selling goods or hiring employees. This includes sales tax permits, unemployment insurance tax, and possibly state income tax. Each state has different requirements, so it’s best to consult your state’s Department of Revenue or local tax authority.

Open a Business Bank Account

Keeping your business finances separate from personal ones is crucial. Once you have your EIN and registration documents, you can open a business bank account. This will help you manage income and expenses more clearly and improve your credibility with customers and lenders.

Keep Records and Stay Compliant

Maintaining accurate records is important for legal and tax purposes. Keep copies of your registration, licenses, tax filings, and any correspondence with government agencies. Staying organized can help you avoid penalties and ensure you’re compliant with evolving regulations.

Review the Financial and Legal Checklist

To make sure you’re covering all the necessary legal and financial aspects, review the sell small business checklist. This resource helps you stay on top of everything from insurance to accounting and is particularly helpful if you plan to scale or eventually sell your business.

Consider Consulting a Professional

While many steps can be done yourself, you may want to consult a legal or financial advisor to ensure everything is filed correctly. This is especially true for more complex structures like corporations or if your business operates in multiple states.

Final Thoughts

Registering your business legally isn’t just about paperwork—it’s about laying the foundation for a trustworthy and professional operation. With the right steps and guidance, you can confidently move forward and focus on growing your venture.

Use this guide as your starting point, and don’t forget to check out the complete sell small business checklist to stay legally and financially secure as you build your business.