How To Register A Business In USA: A Detailed Guide To Get Started

When I saw my dad running his own business, being a successful CEO, I dreamed of being a boss lady. Until I actually became one.

Then, I became aware of the many responsibilities one has to take.

Among all the responsibilities I had to take up as the owner of my business, one of the most important yet most nerve-racking ones was registering my business.

I’ve registered a few businesses over the years and, like many, I’ve learned from my fair share of mistakes.

Now I’ve got a solid understanding of the process. In addition, I’m eager to share what I’ve learned to help you register your business correctly.

I’ve put together a simple guide that outlines everything you need to know about how to register a business in USA. In fact, I have put it into a few straightforward steps.

So, you can use this guide as a reference to make sure you get it right on your first try.

What Does Registering A Business Actually Mean?

Registering a business means you are creating a legal entity that is distinct from your personal identity.

This helps protect your personal assets from any debts or liabilities your business may incur.

Additionally, it builds credibility with customers, vendors, and lenders, and can provide access to benefits like tax breaks and legal protections.

The process typically involves selecting a business structure.

Then, you have to choose a name and file the necessary paperwork with your state government.

How To Register A Business In USA: The Three Basic Steps To Start With

Here are the few steps you MUST follow if you are wondering how to register a business in USA.

Trust me, guys, I have learnt these the hard way. Don’t be like me! Learn about these steps well for an efficient business registration in the USA.

1. Have A Good Business Plan? Write It Down!

To get started on the right foot, it’s essential to have a solid business plan. This plan should clearly define who your target market is.

Additionally, outline where your funding will come from, make financial projections, and detail your marketing and business strategies.

As Wade puts it, “I often refer to it as the magical roadmap for small businesses—it’s crucial for any business owner.”

So, if you want to create a business plan this way, it helps you decide on the best legal structure for your business.

It’s also important for business owners to revisit and update their business plan at least once a year.

Additionally, regularly reviewing it allows you to stay on track.

2. What’s A Plan Without A Structure?

Okay, now that you have a plan, what is the most natural next step for you? You need to decide on your business structure.

By a structure, I mean what type of business framework or type will you have. There are a few types of business structures.

You must get to know all about it before you make a decision. So here we go!

· Sole Proprietorship

In this kind of unregistered business, you and your business are essentially the same entity.

That means you get to keep all the profits, but you’ll also need to pay income tax on those earnings.

Just keep in mind that your personal assets could be at risk if your business faces debts or if something goes wrong, like if a customer gets hurt while using your product or service.

· General Partnership

A general partnership is a type of business owned and run by two or more individuals.

Like a sole proprietorship, the partners in a general partnership are fully responsible for the business’s activities.

This means they are personally liable for any debts and taxes, as well as for any legal obligations that may come up.

· Limited Partnership

In a limited partnership, you have at least one general partner who takes charge of running the business.

This person is responsible for all managerial decisions and carries full liability for any debts or losses the business may incur.

Think of them as the driving force behind the company, ensuring everything operates smoothly.

On the flip side, there are the limited partners. Their primary role is to invest money into the business, and they don’t get involved in daily operations or decision-making.

This means they can enjoy the benefits of the partnership without the risks that come with managing it.

One key aspect of being a limited partner is that their liability is restricted to the amount they’ve invested.

So, if the business goes belly up, they’re not on the hook for more than their original investment.

This structure allows for a mix of active management and passive investment.

So, this makes it a popular choice for those looking to invest in a business. In fact, now they can keep their risk levels in check.

Overall, a limited partnership can be a strategic way to balance responsibility and investment.

· Limited Liability Partnership

I generally call this an LLP in short, like most of the business people. Even though it has a long name, the concept of it is really simple to understand.

So basically, in this business structure, all the partners are joint owners of the particular company. In fact, you can think of it as an incorporated business, because it is.

What does this mean in a broader sense? Let’s say the business comes across any sort of liability or debts.

In that case, all the actions related to it, as well as the consequences for the same, will be shared equally among all the partners.

Additionally, this has to be limited and proportional to the investment they made initially.

To put this in simpler words. If you are one of the partners in such a business structure, you will lose as much as you have invested.

Okay, now some important information. You need to check your local regulations properly before you decide to build an LLP.

This is because the law restricts it to some specific industries and professions in some particular regions in the US.

· Limited Liability Company

This is also known as LLC. This sort of company framework allows you to separate the business owners from the business itself.

Additionally, you can go for this framework if you are a small business owner. There is a damn good reason behind this.

Understand this: nobody can ask you to use your personal assets to satisfy your business liabilities.

Additionally, you will get some tax benefits as well. Also, you will be able to register in a much simpler way compared to a full-fledged corporation.

· C Corporation

C Corporations tend to be large companies with many investors and shareholders.

Like other types of incorporated businesses, a C Corporation separates the owners’ personal assets and liabilities from those of the business.

Starting a C Corporation comes with several responsibilities. For instance, you need to hold annual meetings and have a board of directors that is elected by the shareholders.

3. Register The Name Of Your Business

When it comes to naming your business, you have three main options. You can either register a legal entity name, a trademark, or you can officially register a legal name while operating under a different one.

Keep in mind that the rules about naming your business can vary from state to state, so it’s important to check what’s required where you plan to register.

Just like when you incorporate your business, the best naming route for you depends on your specific needs and situation.

You might decide to follow all three paths to protect your name, or you can choose just one.

While it’s not mandatory, using the same name for each registration option can be a good idea.

Let’s dive deeper into each of these naming choices:

· Entity Name

Most states require businesses to register a unique legal name, which helps the state identify your company.

This uniqueness protects you from having another business use the same name.

However, the rules for naming can vary from state to state. Some states have specific guidelines for the suffixes you can use, like “Incorporated” or “Limited,” while others might require that the name indicate what type of business you’re running.

· Trademark

A trademark is all about protecting your business name on a national scale. Once you get your name trademarked, it’s yours—no one else can use it when they register a business in the U.S.

If you’ve got a name idea in mind, it’s smart to check the official U.S. trademark database to ensure it’s not already taken.

This step is really important because using someone else’s trademark can lead to legal troubles, and no one wants that!

· DBA- Doing Business As

You can register your business under one official name and use a different name to operate.

This is called a Doing Business As (DBA) name. While DBA names must follow federal trademark laws, they do not have to be unique within your state.

How To Register A Business In USA: Evaluating The Region-wise Taxes And Other Costs

Every state has its own rules for starting a business and handling taxes. This means that if you register your business in a certain state, you might enjoy some tax breaks or lower costs.

If you’re looking to operate in several states, you need to make sure your business can legally function in each one.

To help you out, I’ve gathered some information on taxes and other business expenses for a few states.

Keep in mind that this isn’t a comprehensive list. It’s a good idea to consult with a business or corporate lawyer to fully understand what you need to know about running a business in a specific state.

1.    Alaska

2. California

If you have your business registered in California, you must remember that this state is famous for high taxes on business.

Additionally, it will require you to pay a hefty amount of fees.

3.   New York

In New York State, corporations must pay a corporate franchise tax based on their revenue. Other types of businesses also have to pay filing fees.

4. Ohio

In Ohio, businesses do not pay a flat corporate tax. Instead, they pay a commercial activity tax based on their gross income.

If a company earns less than $150,000, it does not owe any taxes. This rule applies to all businesses.

5. New Jersey

In New Jersey, corporations pay corporate income tax based on their revenues.

Other types of businesses are not taxed; instead, the owners pay taxes on their income.

How Can You Get Important US Permits And Licenses?

Most tech startups don’t typically need general federal business licenses, but there are some exceptions depending on the nature of your business.

If you’re working in fintech, cryptocurrency, or handling sensitive data, you might need to get specific registrations or licenses.

• For instance, if your startup involves money transmission, digital wallets, or cryptocurrency, you could be required to register as a Money Services Business with FinCEN and obtain state money transmitter licenses.
• If you offer investment advice or financial products, you might need to register with organizations like the SEC or FINRA.
• Startups involved in broadcasting or telecommunications often need licenses from the FCC.
• With the increase in privacy and data security concerns, compliance has become vital.
• You should be aware of federal laws like the Gramm-Leach-Bliley Act as well as state privacy regulations.
• It’s a good idea to check the local websites of relevant federal agencies for guidance and application procedures tailored to your industry.

If your tech startup plans to use unique brand names, logos, inventions, or designs, think about applying for trademarks or patents with the US Patent and Trademark Office as you grow.

How To Open A US Bank Account For Your Business?

Opening a company bank account is an essential step for running a business in the US. Here’s how you can get it done:

• First, it’s important to keep your personal and business finances separate. This not only helps with better accounting but also simplifies tax management.
• Next, make sure you have the necessary documents ready:

• Articles of Incorporation or Organization,
• an Employer Identification Number (EIN),
• a government-issued photo ID, and

proof of your US business address.

• It’s a good idea to check with your bank, as the requirements may vary if you’re a non-resident.
• If you plan to accept card and online payments, consider setting up merchant services.
• Additionally, using digital banking tools like Wise or Revolut can make managing international transactions much easier.
• Having a business account helps you keep your finances organized, gives your company a professional image, and prepares you for growth while keeping you compliant with regulations.

Note: Even if you’re a non-resident, you can still open a US business bank account as long as your company is registered in the US and you have an EIN.

How To Register A Business In USA Explained

Registering your business in the USA can really boost your credibility and simplify collaboration with US partners and customers.

To get started, you’ll need to decide on your business structure. Additionally, and this is quite important, you must choose a state.

Then you will have to pick a business name. Finally, you will need to submit the necessary formation documents.

Don’t forget to obtain your EIN. In addition, you must open a bank account and check if you need any specific licenses or permits for your industry.

Are you ready to take the first step?