If you’re forming a business, you may have heard that you need to register it with your city or state. You may also be a little embarrassed to admit that you don’t really know what that means. Why do you need to register a business, and with whom?
“Registering” a business is a general term that could mean a lot of things, so it’s no wonder you’re confused. For example, business registration could mean registering a fictitious business name, registering with state and local taxing and licensing authorities, or registering a trademark.
Here are some of the ways that small business owners register their businesses.
Register Business Name
There are two ways of registering a business name. The first is to form a business entity such as a corporation or limited liability company. The name you choose for your company will automatically be registered with your state, and that means that no other business can be formed there with the same name.
The other method is to register a fictitious business name. Suppose your name is Joe Smith and you operate a sole proprietorship called “Joe’s Lawn Care.” Or suppose you have formed a limited liability company called “Lawns and Things, LLC,” but you still operate your business as “Joe’s Lawn Care.” In these cases, “Joe’s Lawn Care” isn’t the business’s legal name – it’s known as a fictitious business name, a “doing business as” name, or a “DBA.”
In some states, you must file a DBA registration with the state agency responsible for business filings, usually the secretary of state. You will submit a form and a fee, and in some states you may have to publish notice in a newspaper. In states that do not have statewide DBA registration, you may need to register your DBA with your city or county instead. And some states don’t require DBA registration at all.
Registering With Taxing and Licensing Agencies
Depending on the type of business you have and the place it’s located, you may have to register for licenses or permits from local licensing agencies. In some localities, all businesses must have a business license or business permit. You may also be required to get permits for things like parking and building occupancy. And certain types of businesses, such as restaurants, have special licensing and permitting requirements. The U.S. Small Business Administration has a webpage with links to various state and local requirements.
Although you don’t have to “register” with the Internal Revenue Service, you do need a federal tax ID number (unless you are a sole proprietor with no employees). You will use the tax ID number to report and deposit employment taxes and file your federal tax return. You can obtain a tax ID number online.
If you sell goods or services that are subject to sales tax, you must register with your state taxing agency, and you may need to obtain a seller’s permit. In general, you must pay sales tax on any transactions that occur in a state where your business has a physical presence.
However, exact requirements vary from state to state. To understand your obligations, contact your state’s taxation department. You may also need to register with your county so your business can pay personal property taxes and real estate taxes.
A trademark is a design, symbol, word, or phrase that identifies the source of your goods or services and distinguishes them from your competitors’ goods and services. Trademark protection arises from using your trademark in business, but for nationwide protection, you can register your trademarks with the U.S. Patent and Trademark Office.
You can trademark a business name, a logo, a label, product packaging, and other materials that you use to identify your business.
To register a trademark you must file an application with the Trademark Office identifying the trademark and the class of goods and services you are using it for. You can do this online.
“Registering” a business can mean different things in different situations. Depending on the type of business you have and the city and state where you’re located, you may need to register a business name, register for licenses or permits, or register to pay taxes. You may also want to register trademarks.
Completing the proper registrations will help get your business off on the right foot and will ensure that your business name is protected and your business is in compliance with local, state, and federal laws.