So, you’ve got your small business idea — whether that takes on the form of a startup, franchise or Amazon seller — with a business plan drafted up. You’re ready to begin with the registration process, but if you’ve never done this any of this before, you might feel at a loss on where to start first.
Here’s our quick and easy checklist for what every type of small business can expect to do next in order to legitimize their offerings and services.
Determine if registration as a corporation or LLC is for you
For some businesses, especially those run from home like an Amazon seller, registering as a sole proprietorship may be considered the ideal entity of choice due to its affordability and ease in formation. However, sole proprietors are also liable for everything that happens with the business since the entity is not separate.
By registering as either an LLC or corporation, you are ensuring that your personal assets are kept separate from those of the business and providing your business with established credibility and the ability to save on taxes. These entities vary a bit when it comes to their management structure (with corporations leaning on the more formal side and LLCs embracing simplicity), so do a little research to figure out which is the best fit for your business.
If you are a licensed professional, such as a lawyer, physician, or engineer, or work out of a state where a license is required to provide services, you may need to opt for registering as a professional corporation (PC) or professional limited liability company (PLLC).
Related: What You Need to Know About Taxes Before Starting a Business
File to register your trademarks
Far too often, entrepreneurs make the mistake of thinking that their ideas are the most original ones ever. There is simply no way they could be copied by someone else, right? It’s always a better idea to be safe rather than sorry when it comes to your intellectual property.
Perform a cursory search to verify that your business’ name, logo, designs and any assorted symbols or phrases are unique and then file a trademark application to the USPTO to claim your name. Doing this gives you the exclusive rights to your original works of authorship and ensures that nobody else can plagiarize or copy those unique assets.
Focus on getting necessary documents
Here’s a look at a few you’ll definitely need no matter what size your business is.
- EIN (Employer Identification Number): If you plan on hiring employees, opening a bank account for your business or establishing a credit profile, this is a must-have to be issued by the IRS
- Business licenses: Each jurisdiction has their own set of required licenses and permits and it’s important to determine which ones you’ll need, such as general business licenses and health department permits. Keep in mind that without these licenses, your company can face fines and may even be forced to shutter if they fail to stay within compliance
- Registered agent: This is a person (or company) that will accept legal documents on your behalf, adding a layer of privacy between your business and the public (especially if the documents are legal notices like a court summons)
- SUI (State Unemployment Insurance): If you have employees hired, you’ll need to pay unemployment taxes on their wages in the state. Remember that these payments have deadlines, with tax reports and tax/wage reports due on a quarterly basis
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File the documents with the Secretary of State
In order to operate your business, you will need to get your operating agreement and bylaws in order. Bylaws cover topics like the organization of meetings, how directors are elected, and officer roster and summary of duties. An operating agreement contains information about the business of the LLC and the duties of its members including membership withdrawal, activities, membership provisions and tax and financial provisions, among other areas. Make sure you review and confirm that the bylaws and operating agreement match the way you are doing business before you file these documents!
