How to Register a Business in 6 Steps: A Guide for 2022
State registration is not required for many solopreneurs. There are many advantages if you register your company, but there is some homework involved. The process of registering your business is an exciting one. Additionally, if you know where to look, you’ll find lots of materials to make the procedure painless but perhaps not very enjoyable.
So, let’s get down to answering the query of “how do I register my business online?” once and for all.
#1. Give It a Name
To create online company sites, every e-commerce brand owner must first choose a name for their online store.
It’s critical that you come up with a catchy and memorable name for your internet store so that your customers remember it. Make sure that the name is relevant to your niche and that you can construct a marketing strategy around it before you choose it.
It can be difficult to come up with a company name that will last. Analyze the types of names used by some of your competitors. Make a list of e-commerce brand names that you like, and then think about how your own concept compares to them. Is there anything unique about your concept that makes it stand out? What can you do to differentiate it? Your organization could benefit from using a name generator.
#2. Claim the Name
One of the most difficult components of starting an e-commerce brand is coming up with a catchy name for your start-up. These simple actions can help you cope with the task:
- Check to see whether your name has already been trademarked in your jurisdiction. Any attempt to officialize a name that is already registered in their database will be automatically rejected. As a result, you’ll lose any fees you paid to process the application;
- To avoid any of these issues, conduct a thorough check of your local company directories to see if the name you want to use is already taken. Avoid naming your organization after a current fad or craze. While the name “Pineapple Pizza Central” may bring you immediate success, how well-known do you think your e-commerce venture will be in the coming years?
- You should think about the name’s staying power before registering your firm because it will be difficult to modify it later on.
Once you’ve established an online firm, changing your name can be a legal and logistical headache, and it can also cause confusion for your current consumers.
#3. Give Your Business a Structure
You can form a partnership, an LLC, or a corporation to run your firm. You can elect to be taxed as a corporation instead of as a sole proprietor, but this is a separate decision from registering your firm.
In both corporations and LLCs, there is the benefit of restricted liability. The ability to benefit from pass-through taxation, in which the organization’s revenues are passed on to the owners as personal income, is a key difference between LLCs and corporations. You can find many LLC formation services online.
As a result, you may be able to save money on your taxes. This status, however, allows corporations to be taxed as a pass-through company rather than as a separate organization.
Your organization’s unique tax situation will determine which organizational structure is best for you. Consult a tax professional to go over your choices.
#4. Choose Where You’ll Be Registered
Consider where you want to register online business details before making a final decision. Different states have different tax rates. However, you don’t have to officialize your small business in the state where you operate it.
You can save money in the long run by starting your new company in a state with low or no sales tax rates. As one of the world’s largest online retailers, Amazon utilizes this option.
Take a look at tax rates in each state and decide which state is best suited to your organization’s immediate and long-term objectives. As a result of the absence of sales tax in some states, there is no requirement to register.
#5. Get Your Tax Number
On the federal level, you’ll also need to file your organization. You’ll need a federal tax identification number for your eCommerce brand to do this. Your federal tax identification number (EIN) is sometimes known as a social security number for your organization, and it is essentially the same thing.
Having an EIN for your organization is vital since you will be filing tax returns and submitting reports on your business activity. In order to file your taxes with the federal or state government, you need this number.
Obtaining an EIN for your online venture is simple and may be done at any time of the day or night. On the same day that you submit your online application, you’ll receive your EIN.
#6. Take Care of Banking
To open a business bank account in the United States, you’ll need proof of your organization’s official registration with the state. To do this, you need to know how to officialize an internet business.
When you’re starting an online venture, you’ll want to keep your personal finances distinct from the ones you’ll use to fund it. The ability to invoice and deduct certain payments as company costs is another benefit of opening a business account.
You’ll be able to see exactly how much money your e-commerce brand is costing and how much money it is producing by opening a business account.
It will also help your e-commerce firm appear more professional. Orders will be paid for using your organization’s account rather than your personal one. Your customers will feel more secure working with you because of this differentiation.
After reading this article on how to file a business, you’re ready to begin operating a legal online company. We’ve outlined in this article how to register your organization as a legal entity once you’ve completed the process. As a result, you will be able to call yourself the proud proprietor of a legitimate organization.