When To Register Your Business
Registering your company is obligatory for nearly all business entities. If your business is of a substantial size, you are obliged to register it. Exceptions are largely relegated to where a person conducts business in their own name, in which case, that person is allowed to carry on a number of business activities without being formally registered. In some cases, small partnerships may be exempt from registration requirements.
Nevertheless, there are instances where, regardless of how small your business is, you will need to register.
If you are operating under a fictitious name, rather than your own name, your state will likely expect you to make a doing-business-as (DBA) registration.
Registration is a fairly straightforward process, so, you need not fear getting lost in the process. Small businesses usually need only register their business name with state and local governments.
Some businesses, however, may be required to register in more involved ways.
As enticing as the prospect of not registering may seem, registering allows you to limit your liability, and get certain legal and tax benefits.
Indeed, if you want to use a corporation, limited liability company, or a limited liability partnership, as your business’ legal structure, you will have to register.
It is possible to register in multiple states. Indeed, many businesses register in states such as Delaware, which have favourable business laws, even if they do not have any business there. In tandem with filing in states such as Delaware, they also make an auxiliary registration where they operate from.
Register with federal agencies
In many instances, registration is simply a matter of registering a business name and filing for a federal tax ID. In some cases, small businesses register with the federal government in order to obtain trademark protection or to get tax exemption status.
If you plan on getting a trademark for your brand, business, or product name, especially if it includes widely recognized terms like Moissanite, you need to apply for trademark protection with the United States Patent and Trademark Office after you have registered your business.
If your business is a not-for-profit, you will have to register with the Internal Revenue Service (IRS) for tax exemption.
S-Corps can be created by filing a 2553 form with the IRS.
Register with state agencies
If you choose a corporation, LLC, nonprofit, or partnership, as your legal business structure, you will have to register in the state where your business has its corporate domicile.
State and federal law considers you to be in business if:
- You have a physical presence in a state
- You have frequent in-person meetings with your clients in a state
- A sizable portion of the business’ revenue is derived from the state
- Some of your employees work in the state.
In many states, business registration can be done online, whereas some demand some kind of in-person registration or registration by mail.
The majority of states require you to register with the Secretary of State’s, a Business Bureau, or Business Agency.
In some instances, you may be required to register with the local government, even if you have completed registration with your state.