A Small Guide to Registering Your Business
With over 600 million new jobs required by 2030, the global job market needs several openings to cater to the increase in the world’s working-age population.
With over 600 million new jobs required by 2030, the global job market needs several openings to cater to the increase in the world’s working-age population. In such circumstances, the general public’s focus has shifted toward entrepreneurship rather than employment. However, many individuals are unaware of the challenges of starting a business.
Laws are often stringent when it comes to businesses, and a poor understanding of legal considerations can hurt your business and lead you to violate legal statutes. You must fulfill all the federal, state, and legal licensing requirements. One highly beneficial step you can take here is registering your business.
Why Should You Register Your Business?
When starting your business, your immediate priority is its establishment and stability. The next step is to expand, and for that, you should register your business to give yourself a better reach. Registration makes your business visible in your respective state’s official records, such as the secretary of state business search. A registered company holds more credibility, as seeing LLC or © after your company’s name tells potential customers that you’re a legal, trustworthy entity. Many suppliers and stock investors prefer registered companies when making a business deal too. It also limits your liability and reduces the taxes you would otherwise pay as a sole proprietor.
How to Register Your Business
Here is a simple guide to incorporating your business or company:
1 – Determine Your Business Structure
The foremost thing you must determine is the structure you want for your business. Some relevant considerations include:
● A limited liability company (LLC) protects the owner’s personal assets from business liabilities. The owner doesn’t have to pay corporate tax either. One should opt for this structure if they’re willing to own a medium-to-high-risk business.
● In a C corporation, the owner’s assets are separated from the business, making the company a legal entity with its taxation. This structure is suitable for enterprises that are looking to raise capital.
● An S corporation does not have to pay corporate tax. Instead, its owners pay taxes on their earnings from the business. This structure is usually suitable for companies with fewer employees, less than 100.
2 – Choose the State to Register
It’s a common misconception that you must register your business in your home state – it all depends on where you’re planning to base your business and which state you choose to be your state of domicile. However, you need to consider a few factors before you make that choice:
● Research the states’ tax systems and go for the ones whose tax code favors your business. Some states don’t charge additional corporate taxes on your business transactions, while others do. For instance, New Jersey has a corporate tax rate of 11.5%, so businesses perceive it as unfavorable.
● If you intend on attracting investors and going public, you need to go for a state reputable for being pro-business. For instance, Oregon, Delaware, and Texas provide a good business climate.
Once you’ve finalized the state, you need to file your business with that state’s secretary. You can either hire a lawyer for the paperwork or go online, where you can find ready-made templates that you can use for documentation.
3 – Register Your Business Name
Before you incorporate your business, you need to have a unique registered name that isn’t already taken. Each state has its online tools where you can search whether the name you chose already exists as an LLC or not. Once you’ve finalized a novel name, you need to decide how you’re going to register it, for which you have the following options:
● Trademark: Registering as a trademark protects your business name and services nationally.
● Entity name: Registering your business as an entity name provides protection and identification to your business on a state level according to local laws.
● Domain name: Registering as a domain name restricts other people from purchasing your URL.
Starting your business from scratch can be daunting and stressful, and your immediate priority is to build a solid foundation in the business market to show your competitors and other business owners that you’re here to stay. One way to do so is by registering your business as a legal entity. Doing so provides many benefits, including increased credibility and open access to stakeholders. If you’re looking to register your business with your secretary of state, go through these simple guidelines, and you should be able to do it easily.