If you are an entrepreneur with a viable business idea and a solid business plan, then you have to know how to register the company before starting a business. It is important to understand that your business must be properly registered and follow the tax rules to be legal.
Choosing a Business Structure
Consult an attorney
There are several options to start a business that will affect your tax and personal liability. Whenever possible, these options should be made with the help of a business lawyer. To find a qualified lawyer, ask your friends and family for a referral. If you do not find a referral from someone close to you, then visit your state’s bar website and use their attorney referral service or lawyer search function. For example, in California, you can talk to a free professional who will analyze your needs and keep you in touch with the lawyers who can help.
Before you appoint an attorney, make sure you pass through the initial consultation. During this consultation, ask the lawyer about the history of companies with their manufacturing and registration, their level of success and the history of their discipline.
When you find a lawyer, whom you like, make sure to have an acceptable fee system and get a compromise in writing.
The way you organize your business, it will affect the types of taxes you pay and how you will file your return. For example, the sole ownership and corporation filing income tax returns. On the contrary, the partnership information files the return, which is the reporting of income and expenditure.
If you make a corporation, then the unit itself is subject to corporate income tax at the state and federal level. In addition, all the dividends distributed by you are subject to individual tax rates on individual tax returns.
If you make a limited liability company (LLC), then the Internal Revenue Service (IRS) will treat it as a corporation, partnership or an neglected entity. Each of these decisions will affect the way you pay your taxes.
If you create a nonprofit, you can qualify for tax rebates at both federal and state levels.
Determine how much personal liability you want to face.
Some business structures provide protection from personal liability for business loans. However, these businesses are often more complex and require more paperwork and more reporting. On the other hand, if you choose a business structure that does not relieve you from personal liability, then you may have to pay the loan for your business from your pocket.
In general, LLCs and corporations provide personal liability protection, while the sole ownership and partnership is not usually done.
Decide how you want to raise funds.
Different business structures are required to raise the capital in different ways. Before you build and register a company, you will want to consider how effective you are to raise money using different means.
If you make a corporation, you have to raise money through debt and personal investment (i.e., purchase of stock or use of venture capitalist firms).
If you create a nonprofit, you will raise money through personal donations and grants.
Think about paperwork.
The type of business structure you choose will determine the types of recordkeeping and reporting that you need to do. In general, corporations will need the most record keeping and reporting, while the least need for partnership and sole proprietorship.
Corporations are often required to maintain contracts, leases and other agreements; License and permit; And payroll and personnel files Corporations are also required to create annual reports in many states.
Planning Your Business
Write out your business plan.
A business plan is an essential tool for creating a successful business. This is usually a three-five-year road map of your business projections. Each business plan should have the following elements:
An executive summary, which is a snapshot of your business as a whole.
Details of a company that provides information about you about what you do and how you are different from other companies.
A market analysis, which involves discussion of your industry, target market and competitors.
The description of your organization and management, which explains how you have structured your business (e.g., corporation, non-profit, partnership)
A marketing and sales plan that tells people how to market and sell your product.
Financial estimates that tell others what kind of financing you need and why.
Funding requests, which are a formal proposal for people to fund your business.
Choose a name.
When you register in the state you need a name for your business. If you are a corporation or an LLC, you may need to include some information in your business name. When you make a name, think about how your name will look online, billboards and in the newspapers. You should also think what the name will make people feel and if it loses people to do business with you.
If you are building a corporation, you will need to include words like “corporation”, “company” or “limited”.
You must register your name as soon as possible with your state. This process is often known as registering your “Doing Business Usa (DBA)” name. In California, for example, you must register a DBA if you are working under a name in a corporation, partnership, or sole proprietorship business that is not your own. You will register your name with the office of the city or county clerk. Once you have entered the name, you are required to publish it in the newspaper for a specified period.
Apply for trademarks.
Trademarks protect names, symbols and logos that separate objects and services. Because your name is one of the most important and valuable pieces of your business, so you should protect it whenever possible. To apply for a trademark, you will use the online service provided by the United States Patent and Trademark Office.
Find an office address.
When you register with your state, you will need to include an office address list in your article to include. This address does not have to be a major place for your business, but it should be an address in the state where you are registering. This address is important because it is where all your official correspondence will be sent from the state.
For example, in Oregon, you must provide an Oregon road address similar to that of the registered office of registered agent.
Designate a registered agent.
A registered agent is a person or entity that is specified for obtaining any process, information or demand in your company. Before registering your company, the registered agent should be nominated. You will be required to name them in their articles of incorporation.
Contact potential candidates and choose a person or entity that meets all the needs of your state.
In many states, if you are making a profit-making corporation, you must give the name of at least one director in your article of incorporation. A director should be an individual person and he does not have to be a resident of the state you are registering.
Contact potential candidates and select one or more candidates who think you will have a good fit.
Create bylaws or operating agreements.
Bylaws are written rules that explain how to handle the internal affairs of your business. They will generally define the purpose of your company, the requirements for membership, the title and responsibilities of officials, how the meetings will be held, and how the voting will be held in the meetings. You have to depend on which state you are registering and what kind of business unit you are making. Even if you do not need a biology, they are an incredibly important document to make and there is nothing on hand.
To make a biology, look at the laws of your state in relation to any requirement. Second, find examples of online bylaws and use them as a template.
Registering With the State
Prepare your articles of incorporation.
Making and registering your company is relatively easy and straightforward, as long as you have done all the busy work reaching this point. To register your company with the state, go to the website of the corporations of your state, which is usually found within the office of the Secretary of State. Once you have tracked the right website, you have to find the right form. For example, in Oregon and Texas, there are different forms for companies registering as for-profit or non-profits. In general, the articles of incorporation will require the following information:
The name of your unit;
Your registered agent and registered office;
The name of your directors (profit-benefit) or managers (non-profits);
Information about shares (if you are a profitable company);
The purpose of your company; And
Organizer name (the person making the company).
File your articles of incorporation.
Most states allow you to enter your articles of online incorporation. For example, in Texas, you can do your paperwork using SOSDirect, which is the secretary of the state’s online filing service. In Oregon, you can use the Oregon Business Registry.
If you do not file online, you will have to take your articles of incorporation to the secretary of state office or fax them in a specified number.
Pay the required fee.
There will be a fee related to the filing of your required documents. If you can not pay the fee, you may be eligible for fee waiver in some states. In Texas, the registration fee for the for-profit company is $ 300, while the nonprofit registration fee is $ 25. In Oregon, the profit is $ 100 for the profitable company and $ 50 for nonprofits.
Completing Additional Requirements
Apply for an Employee Identification Number (EIN).
An EIN is used to identify your company for federal tax purposes. In order to apply for EIN, you will have to go to the IRS website and complete an online application. If you answered “yes” to any of the following questions, then you need EIN:
Do you have employees
Is your business a corporation or partnership?
Do you file tax returns for employment, excise fees, or alcohol, tobacco and firearms?
Do you tax the income given to non-resident aliens?
Do you have a plan?
Are you involved with nonprofits, trusts or estates?
Register for state taxes.
As a company, you will most likely be able to pay some state taxes based on the kind of business you are operating. To ensure that you are registering for the appropriate state taxes, check with your state’s tax entity. You may need to file it for a few or all of the following types of taxes annually:
Do the job;
personal income tax; And
Use sales, assets, and taxes.
Register for tax exemption.
If you are a nonprofit, you can get federal income tax rebates. To file for tax exemption, you must fill out an IRS Form 1023. To do this, you will need your organizational documents, which will include your incorporation articles and your by-laws, you will need to determine the requirements of any state, and you will need your EIN.
The IRS Form 1023 can be found online and can be filed electronically with the IRS.
Obtain licenses and permits.
In most cities you will need a license and / or permit to do business. Check with the city you are working for more information. In addition, there will be fees related to obtaining licenses and permits, and fees can be a flat rate or can be calculated based on your gross sales.
Register your trademark and business mark.
If you have filed and received a trademark for your business name or logo, then you want to register that trademark. For example, in California, you can fill your trademark with state secretary and you can file a secretary of State Form LP / TM 100. The fee for this filing is $ 100.
File annual reports.
Whether you are running a nonprofit company or a profit-making company, you have to file an annual report with your state. Ensure that you know the requirements of your state, in which to find forms and how to enter them.
For example, in Texas, periodical reporting forms can be found online at the Secretary of State online and can be entered online using the SOSBirect system. They should be filed only when you are a certain type of company (e.g., a professional organization or non-profit).