Do I Need to Register My Company to Do Business?

Posted on | August 1, 2009 | No Comments

Yes, no, sometimes and maybe.

The answer as to what registration is required for a business depends on two things: (1) the legal entity you create to operate your business and (2) the nature of your business.

Small business owners often make the mistake of creating a corporation or LLC without completing basic steps.  Use this short checklist to review whether you formed or registered your business properly.

1. Pick the right legal structure for your business. Your options include the limited liability company (LLC), general or limited partnership, limited liability partnership or corporation. Your business lawyer and your accountant should be consulted.  You should consider such factors as the number of owners, the business plan, the capitalization plan, taxes and other factors.

2. File a Certificate of Business Name. Most businesses use a shorten name, called a trade name, for marketing purposes.  ACME Medical Products, Incorporated will be marketed as “ACME” or “ACME Medical Products.”  One of the cheapest and most important things you can do keep your limited liability “shield” in place is to file a Certificate of Assumed Business Name in order safely to use trade names.

3. Register for your business’ Federal Tax ID. All partnerships, multi-member LLC’s and corporations must have an Employer Identification Number, which can be obtained from the Internal Revenue Service.

4. Register with the State Revenue Agency and Obtain Permits/Licenses.  Depending on the nature of your business, you may be required to register with your state, especially if you sell a product and are required to collect sales tax.  In some parts of the country, you might even be required to obtain local permits or licenses.

Of course, this is the short list, and your business may be required to obtain other permits or licenses, or you may be required to register with other governmental agencies.  See your legal advisor for help.

Matthew A. Griffith is an attorney, business performance coach,mentor and entrepreneur.  He coaches, advises and guides business owners, entrepreneurs, inventors, property managers, investors and real estate professionals.  Matt has nearly two decades of experience helping businesses grow.