You’ve made the decision to launch a business. It must therefore be registered. Depending on the kind of organization you’re planning on establishing, how big it will be, and the state you live in, the registration process will vary.
There are several ways to start a business, and each has advantages and requirements of its own. Corporations, partnerships, cooperatives, limited liability companies (LLC), and sole proprietorships are examples of common business structure types. The local or state government will require new business owners to register their enterprise.
Entrepreneurs may need to complete a Doing Business As (DBA) name form, also known as a “Trading As” name form, depending on the business structure. This form enables a business owner to register a company under a name other than their own. Use a state’s business entity search to find out if a company has been registered with the same or a similar name before. When paying taxes, businesses typically also require an Employer ID Number (EIN), which is available for free online through the IRS website.
- Choose business structure:
Kathryn McDavid, the owner of Editor’s Pick, believes that selecting a business structure comes first. “Your choice of a business structure, also known as an entity, will have an impact on how you file your taxes, how your firm is run on a day-to-day basis, and how much of your personal assets are at risk if your company fails. It’s crucial to finish this first since the business structure you select has a significant impact.
- Find a location:
Sam Willis, founder of Rain Catcher believes that “after deciding on the organizational structure for your business, you must pick a location. That doesn’t imply that your company needs to have a physical location. When it comes to registering your business, it refers to the address you use to open a business bank account, file your taxes, and receive vital documents from the government.”
It makes a lot of sense to register a new company in a state with low or no sales tax rates because you’ll end up saving money in the long run. One of the largest online shops in the world, Amazon, makes use of this possibility.
- Naming Your Business:
Sam Underwood, owner of Bingo Card Creator stated that It’s crucial to think of a catchy name for your online store—something that will draw customers in and leave them with a positive impression. “Make sure the name fits your expertise and may serve as the foundation for a successful marketing campaign.”
It can be challenging to come up with a company name that will last. Analyze the names that some of your competitors are using by looking at them. Make a list of the eCommerce company names you prefer, and then consider how your idea stacks up against them. Does your concept stand out among the others? What can you do to make it stand out even more?
- Register with the IRS:
Next, to obtain your Employer Identification number, you must register your business with the IRS (EIN). Your EIN is required for filing taxes and functions as your company’s equivalent of a Social Security number. However, there are several situations where you might not require one. The IRS provides a brief survey that you may complete to check if you do.
- Obtaining Your Business’ Federal Tax Number:
Caitlyn Parish, CEO, and Co-Founder of Cicinia stated that you must register your company with the federal government. To do this, you’ll need to get your e-commerce company a federal tax ID number. Your employer identification number (EIN), sometimes referred to as your federal tax identification number is the equivalent of your company’s social security number.
It’s imperative that you obtain an EIN number for your business because you’ll be submitting tax returns and reporting on your business activity. You cannot file your tax returns with the federal or state governments without this number.
- Opening a Business Bank Account:
Before you may open a business bank account, US banks require small business registration documentation. If they want to open a company bank account, online business owners must understand how to register their website.
Opening a business account is a terrific approach for you as an entrepreneur to keep your personal finances distinct from the ones you’ll be utilizing to fuel your e-commerce firm. Having a business account is also wise from a tax perspective because you can invoice certain payments and deduct them from your income.
Opening a business account can help you understand exactly how much money your company spends each month as well as how much money it makes from its online sales. Additionally, it will increase the professional credibility of your online store. Instead of using your name, customers will make payments for orders to your business account. Your customer will feel more secure dealing with you because of this differentiation.
