Business names are key to helping brands grow. Taking time to register your small business is an important step.
When you register a business name, you can enjoy the following benefits:
- Help you realize tax benefits
- Help you establish credibility and identity
- Help you get approved for business loans
Is it Necessary To Register The Business Name?
Not always. Business structure and organization are factors that determine whether or not you must register the business name.
Sole proprietorships, with the business in the owner’s name, typically don’t have to be registered. But if you form a Limited liability corporation, a limited partnership or a corporation as a business structure, you’ll have to register your business.
Registering a Business Name: A Step By Step Guide
It’s actually fairly easy to register your business, no matter what business structure you have. The process can be accomplished online, as long as you can upload any required legal documents and paperwork.
There are some “pre-registration” steps you should take. You should start a business bank account (and business credit card). You should also establish your business structure.
Once you’ve done those things, here are your next steps:
Choose Your Legal Business Name
Take your time with creating the legal name for your business. You have to choose a name that will be easily identified with your business, and also choose a legal name that hasn’t already been taken by another existing business.
Also, choose a name that hints at the service or product the business provides. For example, balloon business names could include Air Soar or Up, Away and Back Tours, while esthetician business names (skincare) could include Smoothly Yours.
How can you find out if your desired name has been taken? See Small Business Trends article How to See If a Business Name Is Taken. Once you know your name is clear, make a business name reservation (see below). Name reservations are important so that another new business doesn’t try to use the same name as you complete the filing process.
The state’s secretary most often will not accept your proposed name for the business if a similar name already exists for an existing business.
Register with State Agencies
You’ll go to your state’s office, usually called the Secretary of State, to file your business name reservation and register your business. States require registration documents for an LLC, partnership, limited partnership, limited liability partnership, corporation or nonprofit organization. The Secretary of State website in most states should have a step-by-step process with a significant portion of filing you can do using an online form.
Along with your business registration, you’ll also need to designate a registered agent for the business. The registered agent is usually not the business owner. The agent is a person who can accept legal documents and other paperwork on behalf of the owner.
If you conduct business activities in another state, state laws may require you to register your business in that state (see below).
Register with Federal Agencies
You’ll need to register a Federal Tax ID number, which is also called an Employer Identification Number or EIN. You need that number to file taxes.
If you’re a sole proprietor, you can use you social security number as your individual taxpayer identification number for filing taxes.
Register with Local and County Agencies
The requirement for this may vary depending on your business location. Even if registration is not required, you will need to find out if you need to file certain licenses or permits.
Register a DBA
DBA stands for Doing Business As. In other words, it’s an assumed name or fictitious name for a business. If you use an assumed name for your business, that will most likely have to be registered by the local and county agencies.
Register a Trademark
If you want to trademark your business name, product name, trade name or brand, you’ll need to file that with the US Patent and Trademark Office. You can use the United States Patent and Trademark Office website to find your local trademark office. You will not be able to choose a trade name that is already in use.
Register with the IRS
If your business is an S Corporation or a tax-exempt non-profit organization, you’ll need to register with the IRS.
Why The Business Structure Matters
Limited Liability Company – Requires registered agent. Must be registered with Federal and State agencies.
Corporation – Requires registered agent. Must be registered with Federal and State agencies. You’ll have to file articles of incorporation.
Sole Proprietor – Does not require Federal or State registration. However, a sole proprietorship may elect to form an LLC, to protect private assets. Most businesses choose to form an LLC, despite the extra filing requirements.
Partnership – Requires registered agent. Must be registered with Federal and State agencies. This also applies to general partnerships.
Remember that in addition to requirements with the state agency, any business entity may require additional licenses and permits at the county and local levels. Also, a fictitious name must be registered for businesses.
What Business Formation Documents are Needed?
For filing, you’ll need official papers which detail your business name and location, as well as its ownership, structure, and management structure (including principal officer and board of directors if it’s a corporation).
You’ll need the name of the registered agent, the person’s address and contact information.
If the business structure is a corporation or S Corp, you’ll need to provide the number of shares and the value of each share.
You’ll need documents regarding your business name registration.
What Happens When You Conduct Business in More Than One State?
If the physical presence of your business is in one state, and you’re conducting business activities in another state, you may need to register your business in both states to remain in good standing.
Here are the criteria that determine if you need to register your business in another state:
- Your business has a physical location in the other state
- You often meet with clients in another state
- Lots of your company’s revenue comes from another state
- Your employees perform work in that state
Check with a business attorney for advice.
The Bottom Line
Registering a business is a step-by-step process when you’re a new company. Most of the work can be accomplished online and it’s not expensive.
Register a Business Name: FAQs
Should Limited Liability Companies also File a DBA?
Yes, if they are running the company under a fictitious name.
What Does Business Entity Mean?
The entity is the type of business structure of the company (such as LLC, general partnership, etc.)
How Much Does it Cost to Register a Business Name? Some examples for LLCs:
California $70; Maine $175, Delaware $75; Maryland $100; Ohio $99.
What Business Structure do You Need to Get a Trademark?
Any business structure can register a trademark with the USPTO.
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