Nowadays people try to build and operate a small business. Compared to big and complicated business, this small business has less risk but give a quick profit. Besides, starting a small business doesn’t require a large sum of capital. Even so, when you have a plan to build your small business, there’s still small business registration. This has to been done so your business will be legal.
When you hear of small business registration don’t think it will be such a complicated process. On the other hand, it is rather simple. You just need to fill some paper and document and follow the process. After that, your business is already considered as a legal business. If you want to know, here is the process.
1. Understand and Decide Your Business Structure
Before registering your business, look at the back and think carefully about the structure of your business. You must understand and decide it first because it gonna affect the small business registration. Because some of the business structure needs further requirements.
You need to register your business if it is a corporation, nonprofit and LLC or partnership. So when you want to establish these kinds of business you also have to submit certain documentation to state government.
But if the business you want to start is a sole proprietorship, you do not need to register it in the state. Nevertheless, if the name of your business is not yours, you will have to submit your trade name or “doing business as” (DBA) name to the state.
2. Register The Business Name
The part of small business registration is to register the business name. When you want to start your small business, it is essential to register your business name. More even if the business is not named after yours instead of the trade name or DBA. Because before you register it, you can’t run off your business under the chosen trade name.
After sign up, your business is already legal and you can start to operate it. But if you want to name your business as your own name then you don’t need to register it to the state.
3. Get Tax ID From Registering With IRS
The business structure will determine the type of federal tax you must pay. If you own a corporation, business partnership or employees then you must register with IRS. And then, you will own the Employer Identification Number (EIN). This EIN function is your tax id.
4. Register and Check-In With The State Tax or Revenue Office
As the process of registering the small business, you need to register your business to the revenue office. After that, you can go and check how the policies of the state. This has to been done so that you can understand how to initiate the taxation process.
5. Get Appropriate Licenses and Permit
Sometimes you will need licenses or permit from the state or federation. Not all of the business need a permit or license. But without it, you can’t operate your business legally. And to know and understand what kind of business requires a permit or license, you can use SBA’s permit and licensing tool.
Small business registration is an important step to make your business legal. By making it legal, you can operate it well without worries. Your business also is more convincing.