Starting a business involves careful planning, thorough work, and meticulous preparation. Registering your business is a crucial part of this process.

According to the Small Business Administration (SBA), there are nearly 33 million small businesses and over 20,000 large businesses operating in the US as of 2023, with new business registrations growing each year.

If you’re starting a new business, registering your business can seem daunting.

This article is your step-by-step guide to registering your business in the US. We’ll outline all the steps, requirements, and considerations for registering a US business.

Choosing a Business Structure

Selecting the right business structure is the initial step in registering a business in the US. The structure you choose will influence your business’s legal liability, tax obligations, and management framework. 

Several types of business structures each have their own benefits and drawbacks.

Here are the most common business structures to consider:

Sole proprietorship

A sole proprietorship is the simplest business structure, owned and managed by a single person. The owner is personally responsible for all business debts and liabilities and reports business profits on their personal income tax return.

Partnership

A partnership is owned by two or more individuals who share profits and losses. Each partner is personally responsible for the partnership’s debts and liabilities and reports profits and losses on their personal tax return.

Corporation

A corporation — such as an S corp or a C corp — is a separate legal entity owned by shareholders. It’s responsible for its own debts and liabilities, and profits are taxed separately from the owners’ personal income. Corporations also offer limited liability protection to their owners.

Limited liability company (LLC)

An LLC combines elements of a corporation and a partnership. It offers the same limited liability protection as a corporation but with more flexibility in management and tax structure. Owners report profits and losses on their personal tax returns.

Sometimes, the best structure for your business is obvious. However, in other cases, the decision is less clear. If you have trusted advisors, co-founders, or hired counsel, seek their input. 

Once you have chosen your business structure, you can move on to the next step of choosing a name for your business.

Picking a Name for Your Business

The business name you choose will impact your brand identity and create the first impression with customers and competitors. Pick a name that accurately reflects your business and is easy to remember.

Here are some practical tips to help you get started:

👉 Brainstorm a list of potential names that align with your business’s values and mission. Consider using words that evoke positive feelings or are relevant to your industry.

👉 Verify if the names you have chosen are available and do not conflict with existing trademarks. You can use the US Patent and Trademark Office’s (USPTO) search tool to check for existing trademarks that might conflict with your name. 

👉 Check whether the relevant website domain names and social media handles associated with your desired business name are available. This can be the deciding factor between two otherwise strong options for names.

You might opt to protect your business name by trademarking it. Trademarking your business name gives you exclusive rights to use it and prevents others from using a similar name. It also protects your brand identity and helps you stand out in a competitive market.

Applying for an EIN

After choosing a business structure and name, the next step to register your business in the US is to apply for an Employer Identification Number (EIN). 

An EIN is a unique nine-digit number assigned by the IRS. It helps businesses establish their legal identity. It’s like a social security number for your business. An EIN is often required for tax and banking purposes, and it can also help protect your personal assets from business debts and liabilities.

doola can assist you in obtaining an EIN, whether or not you have a US Social Security Number (SSN).

Once you have completed the application, you will receive your EIN immediately. Keep your EIN safe and use it whenever you need to identify your business, such as opening a bank account or filing tax returns.

Applying for Business Licenses

Depending on your industry and location, you may need to obtain various permits and licenses to legally operate your business. The process of identifying and applying for business licenses might look slightly different based on location, but it’s mostly similar throughout the US:

1. Identify the Necessary Licenses

Before applying for licenses, research and identify which ones are required for your business, based on your industry and location. Common examples include professional licenses, industry-specific licenses, and business activity permits.

2. Check the Issuing Agency

After identifying the required licenses, check with the issuing agency to confirm the specific requirements and process for applying. This may vary by state or even by county or city.

3. Gather the Necessary Documentation

Depending on the license, you may need to provide various types of documentation, such as proof of insurance, zoning approval, or educational credentials.

4. Complete the Application

Once you have gathered all the necessary documentation, you can complete the license application. This can often be done online or by mail, depending on the issuing agency.

5. Pay the Application Fee

Most licenses require payment of a fee. The amount may vary depending on the type of license and issuing agency.

6. Wait for Approval

After submitting your application and fee, you will need to wait for the license to be approved. This may take several weeks, so it’s important to plan accordingly.

7. Display Your License

Once you have received your license, you may need to display it prominently at your business location if doing so is required by law.

We have detailed content on navigating business licenses, which you should check out to help you through this process.

Registering With State Agencies

After choosing a business structure, naming your business, and obtaining an EIN, the next step is to register with state agencies. The requirements may vary, depending on your state and the type of business you operate. 

However, at minimum, you will likely need to file paperwork with the state government and pay any necessary fees.

Here’s what registering your business with state agencies typically entails:

• Register your business entity: Register your business entity with your state. This involves filing paperwork such as Articles of Incorporation, Articles of Organization, or Partnership Agreements, depending on your business structure.

• File for taxes: Depending on your business structure and where your business operates, you may need to register for federal, state, or local taxes. This may include income tax, sales tax, and payroll tax.

• Obtain any necessary insurance: Depending on your industry and location, you may need to obtain certain types of insurance, such as liability insurance or workers’ compensation insurance.

• Comply with any other state requirements: Depending on your business type and location, there may be additional state requirements you need to comply with, such as registering for unemployment insurance or complying with environmental regulations.

Opening a Business Bank Account

A business bank account is a separate account that is used exclusively for business transactions. But why is it important to open a business bank account?

Keeping your personal and business finances separate is crucial. A dedicated business bank account allows you to do just that, making it much easier to track your business’s income and expenses. This clear separation translates to simpler tax reporting come tax season.

But the benefits go beyond bookkeeping. Having a separate account can provide legal protection. It establishes your business as a distinct entity from yourself. In the unfortunate event of a lawsuit or bankruptcy, this separation can help shield your personal assets from business liabilities.

Furthermore, a business bank account can boost your credibility and project professionalism.

It demonstrates to clients and vendors that you take your business seriously and are committed to maintaining accurate financial records. This can be especially important in establishing trust with potential partners.

Finally, a business bank account is essential for accepting payments, even if you utilize a merchant account. Whether you use doola or another service, funneling those customer funds into a dedicated business account is necessary.

doola partners with banks that allow you to open a bank account remotely from anywhere in the world, like Mercury. Shop around and compare different banks’ fees and services.

Look for a bank that offers the features you need, such as online banking, mobile banking, or overdraft protection.

You may also want to consider working with a bank that specializes in small business banking.

Understanding Your Compliance Requirements

Compliance requirements comprise a variety of rules and regulations that businesses must adhere to in order to operate legally. Failing to comply with these requirements can result in significant financial penalties and legal consequences.

A strong understanding of compliance requirements is essential for any business. It acts as a shield against legal troubles. By following the specific rules and regulations that apply to your industry, location, and structure, you can significantly reduce the risk of lawsuits and fines. 

Remember, compliance requirements aren’t one-size-fits-all, so a comprehensive grasp is crucial.

Compliance also plays a vital role in protecting your business reputation. Violations can leave a dark stain, making it difficult to attract customers and investors.

Conversely, a commitment to following the rules paints a picture of a responsible and trustworthy entity. This enhances your credibility and builds trust with potential stakeholders.

Furthermore, compliance requirements help to level the playing field within your industry. These rules are designed to promote fair competition and ensure customer protection.

By adhering to them — and even exceeding expectations by following generally accepted best practices — your business demonstrates a commitment to ethical and fair practices, giving you a competitive edge.

Finally, compliance is key to unlocking funding and partnership opportunities. Many lenders, investors, and potential collaborators require businesses to meet specific compliance standards before engaging.

A strong compliance record not only signifies professionalism and a good reputation, but it can also open doors to valuable financial resources and partnerships.

doola offers a Total Compliance package, including bookkeeping services, to help you stay on top of your compliance requirements. This ensures your business operates smoothly and adheres to all legal and regulatory standards.

Understanding Your Tax Obligations

Tax obligations are the monetary dues that businesses must pay to the government, including income tax, payroll tax, sales tax, and excise tax. Such obligations have a significant impact on a business’s financial stability and future success.

Comprehending tax obligations is important for several reasons. First, failure to pay taxes or filing taxes inaccurately can lead to penalties, interest, or legal action. Understanding your tax obligations can ensure that your business remains compliant with the tax laws and regulations in force, preventing any penalties or legal consequences.

Businesses must also plan and prepare for their tax obligations, as taxes can significantly impact cash flow and financial stability.

Accounting for tax obligations in your financial planning is important to ensure that your financial projections are sound and that you have the necessary funds to meet your tax obligations.

Staying up-to-date on tax obligations can help businesses remain compliant with tax laws and regulations that are subject to change.

This can also help businesses establish a reputation for financial responsibility and compliance, creating a foundation for future business opportunities and growth.

Meeting your tax obligations can provide access to funding and partnership opportunities. Lenders, investors, and business partners often look for businesses with a strong tax history and compliance record.

To understand your specific tax requirements, conduct comprehensive research on the specific tax laws and regulations that apply to your business, making sure to factor in variations based on every state where you have tax obligations.

It’s a good idea to consult with a tax professional or an accountant (or to hire these roles in-house) to make sure you’re not missing anything.

doola’s Total Compliance package can handle your tax filings for you, ensuring you remain compliant with federal, state, and local tax requirements.

How doola Can Assist

doola simplifies the incorporation and setup process for your company, ensuring you’re ready to charge customers, hire your team, and raise funds as quickly as possible.

Fill out your company details in the doola form in less than 10 minutes. Then, we’ll incorporate your company in any of the 50 US states, get your IRS tax ID (EIN) for you, and file your 83(b) tax election if needed. 

doola can also help you open a bank account and start accepting payments even before the IRS assigns your tax ID.

doola founders also gain access to exclusive discounts at leading software partners, one-click onboarding with select partners, and free CPA consultations.

The doola Application

It takes less than 10 minutes to fill out the details of your new company. You’ll choose your company structure (C corporation, limited liability company) and pick a company name. 

Our instant company name checker will let you know if it’s available before you submit your application. You’ll add an address and phone number and review and sign your EIN SS4 letter in one click.

Forming the Company

doola will review your application and file your formation documents in the state within one business day. doola charges $297 for our Starter Plan and your first year of registered agent services (a state compliance requirement), and $297 each year thereafter to maintain your registered agent. 

You can also opt for our Total Compliance plan.

Getting Your IRS Tax ID (EIN)

After your formation in the state is complete, doola will file for your company’s IRS tax ID. Founders who provide a US Social Security number, US address, and US phone are eligible for expedited processing. All other users will receive standard processing. 

For standard orders, doola will fax your form SS4 to the IRS and then call the IRS to retrieve the EIN for you to expedite the process if we can, using real-time IRS data to determine when your filing is likely to be available. 

Filing Your 83(b) Tax Election

Many startup founders choose to file an 83(b) tax election to potentially save on future personal taxes. doola can file and mail your 83(b) tax election in one click for both US and non-US founders — no trip to the post office required.

We’ll file it using USPS Certified Mail with tracking, and you’ll get a copy of your signed 83(b) election and proof of filing in your Dashboard.

Partner Perks and Discounts

doola partners with a range of third-party tools to offer special pricing or access to founders. We offer discounts on engineering, tax and finance, compliance, and operations tools, including Amazon Web Services. 

doola also partners with Mercury to provide faster, automatic onboarding using your doola company information so you can get ready to bank and fundraise even faster.

Founders may also access discounts on other doola products, including up to one year of free credits toward payment processing.

Read our guides for startup founders, or learn more about doola and how we can help you set up your new business quickly and easily.

Turn your entrepreneurship dream into reality today!