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Home»Tips»Information on Business Registration That You Should Know
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Information on Business Registration That You Should Know

By Junaid BashirThursday, August 24th, 20235 Mins Read
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Many businesses are required to register to comply with taxation and licensing laws. The exact requirements vary by state and industry. This process can involve preparing and filing paperwork, obtaining a business permit or license, and creating an operating agreement. It’s also crucial for protecting intellectual property, avoiding legal disputes and accessing government benefits and services.

Legal Name

The legal name of your business entity is the official, state-approved name you use on all government forms and documents. It’s also the name that protects you from others operating a similar business in your state. Your legal name will vary depending on your business type and the state’s rules about using certain suffixes. If you’re a sole proprietor, your legal name will be your name; if you’re a corporation or LLC, it’ll be the company name registered with the state. If you want to trade under a name that differs from your legal name, consider registering a fictitious name or DBA. Vendors and banks often require it, and can provide a sense of legitimacy for your business. Our DBA guide will walk you through New York’s requirements, but be sure to check out your state’s specific naming guidelines, as they may vary by state and business structure.

But what is a business registration? Registering your business to help establish consumer trust and protect yourself from liability is important. While some companies aren’t required to do so, it’s generally recommended for all types of businesses, particularly those with employees or who plan to expand into other states. Once your business is registered, it will need its unique Employer Identification Number (EIN) to distinguish it from different companies for tax purposes.

Business Entity

The type of business entity you form determines your tax liability and legal rights. It’s one of the most important decisions you can make, and a lawyer should advise you on what structure best suits your goals. The Small Business Administration has local offices that can provide advice and partner with vetted organizations offering free or low-cost counseling. Most businesses also need a tax identification number, an EIN or Federal Employer ID Number. It is a unique number that identifies your business and distinguishes it from its owners. The EIN is required when filing taxes, opening a bank account or credit card, and applying for certain state registrations and permissions. You should keep the EIN secure, just like a Social Security number and only share it with a small group of trusted individuals.

The most common business structures are sole proprietorships, general partnerships and corporations. Sole proprietorships are ideal for self-employed professionals, such as freelancers and consultants, who need a simple design that’s easy to set up and run. However, this entity makes you responsible for all the business’s debts and liabilities. In addition, if you get sued, the courts can seize your assets, such as your car or home. For these reasons, most people choose to form a partnership or corporation instead.

Tax Identification Number

Depending on your state’s rules, you may be required to register your business’ trade name—the front-facing name that customers see. This process differs between states, but New York, for example, requires that companies that want to use a trade name register that name with the Department of State, along with the registered agent’s address and a statement saying that the person is willing to accept service of process on behalf of the company. You, a company representative, or an employee can be the registered agent. The person must nevertheless be accessible to accept documents during regular business hours, 52 weeks out of the year. You can also use a registered agent service, a stand-alone company that pays annual fees to act as your agent and is registered with the secretary of state. This service ensures that important legal documents sent to your business will be received and scanned for you and can be easily accessed online. To find out if you need a federal tax ID number, use an online tool made available by the IRS. If you do, you can get one immediately through the tool, and it will provide you with a nine-digit number that acts as your business’s social security number. You’ll need this to pay taxes, file employment reports and apply for certain permits or licenses.

Registered Agent

Whether your business is an LLC, partnership or corporation, you must designate a registered agent. For your firm, service of process and vital papers like annual reports from state filing agencies, legal actions, or official notices will be sent to the registered agent, who may be an individual or corporation. Corporations and LLCs, both domestic and international, are required by state law to designate and retain a registered agent. In addition, some governmental agencies require special registration for specific types of businesses. For example, some financial investment advisors must register with the federal government to be licensed to practice in their profession. And local governments in cities and sizable counties often require businesses to register before conducting business there.

If a business fails to maintain a current registered agent, penalties and fees may be assessed against the entity and, in some cases, the owners. Additionally, the failure to keep a presently registered agent may prevent the entity from losing its business license or being closed administratively by the state. Some business owners use a private individual as their registered agent, while others prefer a professional registered agent service. Registered agent services specialize in serving as the registered agent for LLCs, corporations and other business entities. They charge an annual fee and guarantee that important papers sent to your business will be delivered. Many also scan and make documents available online for convenient access.

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Junaid Bashir
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Hey there, I'm Junaid Bashir, a fervent explorer of ideas and a passionate contributor to the intellectual tapestry of WikiCatch. With an insatiable curiosity for the world's mysteries, I dive into the depths of knowledge to bring you articles that enlighten, engage, and inspire

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