Starting a business requires a little more work than running outside during a family yard sale, and setting up a lemonade stand. While you may either mix your lemonade up from scratch or distribute a bottled product, the process is pretty simple. Maybe you’d organize a few snacks as well, and earn extra revenue along the way. However, a full-blown business needs a bigger commitment than half a day of work to get off the ground. True business owners and operators have to meet certain criteria to run a new entity. This includes registering a business name and deciding on a method that suits your needs best.
The good news is there are several options for starting your business and registering its name. You can file as a DBA, trademark your business name or register as a business structure and operate underneath that name. While any of these options may be used individually, they can also be used together for various reasons. Each option has different requirements, and we have info on the ins and outs of registering your business based on type, so please read on to determine which is right for yours.
Business Structure Registrations
You can easily begin by registering your business structure at the state level, which is the most straightforward method. This solidifies the business name as officially “yours”, so that you may legally and safely conduct business under that name.
To register your business name, you will start by registering your business structure as a nonprofit, corporation, LLC (limited liability company) or LP (limited partnership). While every business model features similar types of registration, they have small differences, which vary state by state.
Register a Nonprofit
Rules concerning the operation of nonprofits vary depending on location, which means you should be vigilant about understanding your local laws. To begin, look up further details on your secretary of state’s website, or search guides online for resources by state. To begin a nonprofit, you’d begin by filing articles of incorporation. This is info on your nonprofit, including your name, business location, what you do, and more. This is usually submitted on your secretary of state’s website.
Secondly, and this may take a few months to complete, you need to apply with the IRS for tax-exempt status. Make sure to complete this within a decent time frame, or you may be setting yourself up for failure. Search the IRS website for the appropriate application.
And finally, a nonprofit should be registered within the state it’ll be fundraising in. It can be tricky to register if you plan on doing any fundraising online, ensure you’ve taken this seriously – necessities depend on your nonprofit specifically.
Forming a corporation varies state by state, and involves multiple steps to be taken, along with a lot of paperwork. Something as important as choosing a name also has to consider state regulations. It can’t use the name of another business and includes “Corp.” and “Corporation within the title – check your local secretary of state’s website for more info.
Corporations may be required to operate with a board of directors, depending on your state. In most cases, owners can be directors, however, directors don’t have to be owners. Some states allow corporations to operate under one director, but your options will be governed by the secretary of state within the area your business operates.
You will also need to file articles of incorporation, as with nonprofits, etc. This requires a filing fee of $100 to $800 and includes basic information like its name, location it plans to operate, and more.
LLC or LP Registration
While the rules of registering an LP or LLC depend on location, just as with every other type of business, the steps are generally the same. You will need to pick your business name, ensuring it follows state rules. Businesses registering as a limited company must include terms such as “L.L.C.”, “limited company” and the like.
Once you have picked your name, you’ll go onto paying fees and filing paperwork. You will need to draft your “articles of organization”, describing your business purpose, operating agreement and more. This may not be required in every state, but it’s a smart move to have one prepared. This helps your business to protect itself by operating under its own rules rather than following state rules.
A notice of intent is required in some states, but not every location. Always be vigilant in educating yourself on state regulations when making business decisions. Then you can move onto ensuring you’ve acquired all licenses and permits – these are required for operating any kind of business.
In conclusion, beginning your very own business can feel extremely daunting, but it’s not as simple as a childhood lemonade stand. An easy way to get started is by beginning to register your business name, and following the next steps to get your operation off the ground. You need to ensure you’re within the laws set forth by your state, and you will be on your way to running a full-fledged business.