November 29, 2021
One of the first things you must do upon becoming an entrepreneur is understand how to register a business. This process may be slightly different depending on where in the world you live and/or plan to operate your business, but the essentials are the same. Read on for the basic elements of how to register a business and then check out our more detailed guides for the United States, UK and Europe.
In most cases, if you plan to run your business as a sole proprietorship and operate it under your own legal name, you are not under any legal obligation to register the business with any authorities. However, as your business grows, you will be required to register with both local and federal bodies. Registering your business is beneficial because it separates you as an individual from the business, meaning your personal assets are protected in the event of a lawsuit against the company. Registered businesses may also be eligible for certain tax benefits.
Once you’ve taken the plunge and decided to start your own business, you have a few major decisions to make. The very first one is the type of legal structure it will have. There are a few different options of structures and it’s important to choose the one that suits your business goals and current reality. Each structure may have different rules and regulations when it comes to registering a business of that type.
Here’s a quick rundown of the most common types:
This step is also the most fun! Once you know what type of business you will register as, you need a name. The possibilities are endless, but there are a few key things to keep in mind:
You’ll need to search the local databases in your area to ensure that the name you choose hasn’t been taken already as you will not be able to register a business with the same name as an already existing one.
This one may be a very simple decision depending on where you live, and if your local laws state that you must register your business in that location. In the United States, for example, you are not required to register your business in the state you live in and many people choose to register in a different state that has better (i.e. cheaper) tax laws.
If your business will operate in multiple locations, you may need to register in each (don’t panic - it means more paperwork, but most can be done online and shouldn’t be too much of a hassle!).
Here’s a very brief overview of business registration in different countries:
Once you’ve determined exactly where to register your business, the next step is to actually fill out the forms and deal with the logistical steps of completing your registration. This process will be specific to the local authority in which you are registering your business. In most cases, the process involves getting a tax-ID number and making sure that you are all set up to pay taxes, benefit from any deductibles, hire employees when ready, etc.
The final step in registering a business involves acquiring any relevant licenses and permits that you may need to have. This is very specific to the type of business you run as well as the local laws. It’s very important to research what the laws are in your industry and make sure that you complete the process to obtain all of the licenses and permits that you need for your business to be legal.
No matter what type of business you are registering as or where you are registering there is certain documentation you will always need, including:
Depending on the type of business you register, you may be required to file additional paperwork. Some examples include:
Starting a new business is exciting and we wish you luck on your journey! Start off on the right foot and save yourself a lot of unnecessary headaches later by understanding what you need to do in order to register your business. Don’t forget to check out our guides for registering a business in the United States, the United Kingdom and the European Union for more information about whichever one is relevant to you.
Registering your business name simply means taking all of the steps necessary to ensure that your business is legally recognized by any relevant government authorities. This includes obtaining tax-ID numbers, bank accounts, licenses, permits, and more. Once your business is registered, you are officially a company and are required to pay taxes and abide by all laws that govern your type of business. In addition, you are also eligible for any relevant tax breaks and you are personally protected (unless you are a sole proprietor or general partner) from the company’s liabilities.
Different localities may have specific rules when it comes to registering a business name, but in general it’s a fairly simple process that can likely be done by filling out a form online. You will also need to check and make sure that your business’ name is not already in use. You can do this by searching local business databases in your geographic location.
While you may not be legally required to register your business, especially if you are operating as a sole proprietorship, it is generally in your best interest to do so. Registering your business means protecting yourself against having to use your own personal assets to cover business losses in the case of litigation or other unforeseen circumstances.
It’s easy to register a business on your own. You can simply follow the steps described above, or read one of our more detailed articles if you are in the United States, United Kingdom or the European Union. In most places, the bulk of the registration process can be done online.
Yes, there is no requirement to first register a business and only then begin operations. There are, of course, benefits that you won’t be eligible for until you officially register the business, but you do not need to rush especially if you are unsure whether your business will take off and succeed.
To make your business name official, you must first make sure that it isn’t already trademarked or in use by another company, and then register it with the local authorities.