Starting a business is more than just an idea—it also means building something real, one that can grow and thrive. But before you start selling products or offering services, your business must be legally registered.
Skipping this step can lead to serious issues: fines, lawsuits, and even the inability to open a business bank account. You wouldn’t build a house without a foundation, and the same logic applies to your business.
So what’s the way to go? Well, this guide breaks down exactly how to register a business in the US, helping you move forward with confidence. Whether you’re starting an online store, a consulting agency, or a tech startup, this process ensures you’re legally protected and set up for success.
Key Takeaways
- Business registration is essential for legal protection, credibility, and access to funding.
- Choosing the right business structure (LLC, sole proprietorship, corporation, or partnership) impacts taxes and liability.
- A unique and legally available business name should be registered to avoid conflicts.
- An EIN is required for hiring employees, filing taxes, and opening a business bank account.
- Licenses and permits vary by industry and location—failing to obtain them can lead to fines.
- Financial compliance is critical—separate business finances, track taxes, and file required reports.
- Registering a business online is quick and easy—most states process applications within days.
- Failure to register can result in legal trouble, tax penalties, and personal financial risk.
Action Step: Don’t delay! Register your business today to establish a solid legal foundation and unlock growth opportunities.
Why Registering Your Business Matters
Many new entrepreneurs overlook the importance of business registration. They assume that since they’re just starting, they can wait. Big mistake. You might get away with it for a while, but eventually, legal, financial, and operational challenges will catch up.
Here’s why registering your business is essential from day one:
- Legal Protection: If your business isn’t registered, you’re personally responsible for any debts or lawsuits. A customer could sue you, and your personal assets (house, car, savings) could be at risk.
- Tax Benefits: The government offers tax deductions for registered businesses, including write-offs for equipment, travel, and marketing expenses.
- Credibility & Trust: Clients, investors, and banks take you more seriously when your business is legally recognized. A registered business is more likely to attract customers than an unregistered one.
- Easier Growth & Funding: If you ever need a business loan, grant, or investment, registration is a must. No bank or investor will fund an unregistered business.
Skipping this step can mean trouble later. Imagine landing a huge contract, only to realize you can’t legally sign it because your business isn’t registered.
Now that you understand the importance of registering your business, the next step is selecting the right business structure. Each structure—LLC, sole proprietorship, corporation, or partnership—affects taxes, liability, and management. Let’s explore which one suits your needs best.
Steps on How to Register a Business in the US
Step#1. Choosing the Right Business Structure
Your business structure determines how much you’ll pay in taxes, how much paperwork is involved, and whether your personal assets are protected. Picking the right one is crucial.
Common Business Structures in the US
- Sole Proprietorship – The easiest to start but offers zero personal liability protection. If your business gets sued, you’re personally responsible.
- LLC (Limited Liability Company) – A popular choice for startups because it protects your personal assets while keeping paperwork and taxes simple.
- Corporation (C-Corp & S-Corp) – Best for businesses planning to raise capital or go public. Offers strong liability protection but comes with complex tax requirements.
- Partnership – Ideal for businesses with multiple owners. Profits and liabilities are shared.
Which One Is Right for You?
- If you want simplicity and protection, choose an LLC.
- If you plan to seek investors, a corporation is better.
- If you’re testing an idea solo, a sole proprietorship works but isn’t ideal for long-term growth.
- Non-residents can register a Limited Liability Company (LLC) or a Corporation (C-Corp).
| Business Type | Best For | Liability Protection | Taxation | Ease of Setup |
|---|---|---|---|---|
| Sole Proprietorship | Freelancers, solo entrepreneurs | No | Personal | Easiest |
| Partnership | Small businesses with multiple owners | No (GP), Yes (LP) | Personal | Easy |
| LLC | Small to medium businesses | Yes | Flexible | Moderate |
| C Corporation | Startups seeking investment | Yes | Double Taxation | Complex |
| S Corporation | Small businesses wanting tax benefits | Yes | Pass-through | Moderate |
S-Corp is not an option for non-residents because it requires shareholders to be US citizens or residents.
Choosing the wrong structure can lead to higher taxes, unnecessary paperwork, or even personal financial risk. If you are a resident of the US, you can skip step 2&3.
Step#2. Select a State for Registration (Non-residents)
The best states for non-resident businesses include:
- Delaware – Popular for business-friendly laws and privacy.
- Wyoming – No state income tax and low fees.
- Nevada – No corporate tax and strong asset protection.
- Florida & Texas – No state income tax and business-friendly policies.
Consider tax regulations, fees, and reporting requirements when choosing.
Step#3. Appoint a Registered Agent (Non-residents)
A registered agent is required in the state of incorporation. This agent:
- Receives official documents and legal notices on behalf of the business.
- Must have a physical address in the state where the business is registered.
- Can be a professional service provider (e.g., Northwest Registered Agent, Incfile).
Now that you’ve chosen the best structure for your business, the next step is picking and registering a business name. Your name should be unique, legally available, and brand-friendly. Let’s explore how to find and register the perfect name for your business.
Step#4. Naming Your Business and Registering It Legally
Your business name is your brand identity, and it’s the first thing people notice. But before you get attached to a name, make sure it’s legally available. Choosing the right name ensures you stand out, comply with legal requirements, and avoid costly rebranding down the road.
Steps to Secure Your Business Name
- Check Name Availability: Each state has a Secretary of State website where you can check if your business name is already registered. Search your state’s business registry and the USPTO to ensure no one else is using it.
- Register a DBA (Doing Business As): If your business operates under a different name than its legal name, you must file a DBA. For example, if John Smith runs “Smith Marketing” but wants to brand as “BrightEdge Marketing,” he’d file a DBA for “BrightEdge Marketing.”
- Trademark Your Name: If you want exclusive nationwide rights to your business name, registering a trademark protects it from being used by competitors. The process takes 6-12 months and costs between $250-$350 per class of goods/services.
- Check Social Media Availability: To maintain consistent branding, secure your business name on major platforms such as Facebook, Instagram, Twitter, LinkedIn, YouTube, TikTok, and Pinterest if relevant
A common mistake? Skipping the name check. You don’t want to invest in branding only to receive a cease-and-desist letter later.
Step#5. Federal and State Business Registration Requirements
Business registration requirements vary depending on your state and industry.
Key Steps to Register Your Business
- File LLC or Corporation Documents: Submit the required forms to your state’s Secretary of State office.
- Pay the Filing Fee: The cost varies by state—typically between $50 and $500.
- Obtain a Business License: Some industries require state-specific licenses (e.g., food services, healthcare, construction).
Wondering, Do I need an LLC for my startup? If you want personal asset protection and tax flexibility, the answer is yes.
Once you are able to get your business name legally registered, the next step is obtaining an Employer Identification Number (EIN). This unique number is essential for taxes, opening a business bank account, and hiring employees. Let’s break down how to get one for free.
Step#6. Applying for an Employer Identification Number (EIN)
An EIN (Employer Identification Number) is required for most businesses. It’s like a Social Security number for your business, and you’ll need it to:
- Open a business bank account
- Hire employees
- File business taxes
Non-residents can apply for an EIN:
- By mail or fax (Form SS-4 to the IRS).
- By phone (only for international applicants).
- Online is not available for non-residents.
Tip: The online method is highly recommended because it’s fast, secure, and free of charge.
Best Practices and Tips
- Keep Your Information Handy:
Before you begin, have all necessary details about your business structure and ownership ready. This includes your legal business name, address, and details about the responsible party. - Avoid Third-Party Fees:
The IRS offers EIN applications for free. Be cautious of services that charge a fee to file on your behalf. - Secure Your EIN Documentation:
Once received, store your EIN confirmation in a secure location. You’ll need it for opening bank accounts, filing taxes, and other official business activities. - Double-Check Your Application:
Mistakes in your application can delay the process. Take your time and review all details before submitting.
Applying for an EIN is free and takes only a few minutes on the IRS website. Avoid companies that charge for EIN applications—this is a common scam. With your EIN in hand, you’re one step closer to fully establishing your business.
Step#7. Obtaining Necessary Business Licenses and Permits
Some businesses need additional licenses beyond basic registration. Once your business is legally registered and equipped with an EIN, it’s time to focus on obtaining the necessary licenses and permits. These approvals ensure your business complies with federal, state, and local laws and operates without interruption.
Here’s everything you need to know to navigate this crucial step.
- General Business License – Required in most states and issued at the city or county level.
- Industry-Specific Licenses – Restaurants, salons, real estate agencies, and healthcare providers require special permits.
- Home-Based Business Permits – If running a business from home, check local zoning laws.
- Environmental Permits: Businesses with an environmental impact might need additional permits related to waste disposal, emissions, or resource use.
How to Apply for Business Licenses and Permits
- Research Local Requirements: Visit your city or county’s official website to understand local licensing requirements. Many local governments provide checklists or guides to help business owners.
- Gather Required Documentation: Typical documentation might include your EIN, business registration certificate, proof of insurance, and any specialized certifications relevant to your industry.
- Complete the Application: Applications are often available online. Fill in all required fields accurately to avoid delays. Some permits may require an in-person visit or additional interviews.
- Pay the Fees: Licensing fees vary by location and business type. Keep in mind that while some fees are nominal, others can be a significant upfront cost.
- Wait for Approval: Approval times can vary from a few days to several weeks. Ensure you apply well in advance of your business launch to avoid operational delays.
Failing to get the right licenses can lead to fines or forced closure.
Maintaining Compliance and Renewals
Once you’ve secured your licenses and permits, it’s essential to keep them up-to-date:
- Renewal Schedules:
Most licenses require annual or biannual renewals. Mark your calendar with renewal dates to avoid lapses. - Stay Informed:
Regulations change. Regularly check with local authorities or subscribe to updates from relevant government agencies to ensure you remain compliant. - Record-Keeping:
Keep digital and physical copies of all licenses, permits, and renewal receipts. These documents are essential during inspections or audits.
Also, have it in mind that:
- LLCs with foreign owners are taxed as pass-through entities, meaning income is taxed in the owner’s country.
- C-Corps must pay corporate income tax (21%) on profits.
- Foreign-owned businesses must file Form 5472 with the IRS annually.
Hiring a US-based accountant can help with compliance.
Leveraging Resources for Assistance
Navigating the labyrinth of licenses and permits can be daunting. Here are some resources to help you:
- Local Small Business Development Centers (SBDCs):
Often offer free or low-cost advice on licensing and permits. - Chambers of Commerce:
Provide localized information and networking opportunities with other business owners who have navigated similar processes. - Professional Licensing Consultants:
For complex or highly regulated industries, consider hiring a consultant to ensure you’re fully compliant.
With all your licenses and permits in place, you’re now ready to focus on setting up your business finances. This next step will cover how to open a business bank account, manage your bookkeeping, and ensure ongoing compliance with tax regulations. Proper financial management is essential for long-term success and peace of mind.
Step#8. Setting Up Business Finances and Compliance
Proper financial setup is critical to keeping your business going. Not only does it help you manage day-to-day operations effectively, but it also ensures that you stay legally compliant with federal, state, and local regulations.
Steps to Keep Finances in Order
- Open a Business Bank Account – Keeps your personal and business finances separate.
- Understand Tax Obligations – Depending on your structure, you may owe federal, state, and local taxes.
- Stay on Top of Annual Reports – Many states require yearly filings to keep your business active.
Skipping these steps can lead to tax penalties and legal trouble.
Open a US Business Bank Account (Tips for Non-resident)
- A US business bank account is essential for transactions and credibility.
- Some banks allow remote account opening, while others require an in-person visit.
- Alternative options: Mercury, Wise, Payoneer, and Brex offer online business banking for international entrepreneurs.
Requirements:
- Passport or government-issued ID.
- EIN confirmation letter from the IRS.
- Business formation documents.
- Proof of US address (a registered agent address can work).
Action Tip: Choose a bank that offers business-specific features such as low fees, online banking, and robust customer support.
Implementing an Effective Accounting System
Choose the Right Tools:
Investing in accounting software—like QuickBooks, Xero, or FreshBooks—can save you time and reduce errors. These tools help you:
- Track Income and Expenses: Keep a real-time record of every financial transaction.
- Generate Financial Reports: Understand your cash flow, profit margins, and overall financial health.
- Automate Routine Tasks: From invoicing to payroll, automation minimizes manual errors.
Hire Professional Help:
For many businesses, especially those expecting rapid growth, consulting a professional accountant or bookkeeper is invaluable. They can:
- Provide insights into cost-saving measures and tax deductions.
- Ensure compliance with evolving tax laws.
- Help with financial planning and strategy.
Understanding Tax Obligations and Compliance
Federal, State, and Local Taxes:
Every business must adhere to specific tax requirements. Your obligations might include:
- Income Tax: Based on your business’s structure, you could report profits on personal returns (sole proprietorship/LLC) or file separate corporate tax returns.
- Payroll Tax: If you have employees, you’re responsible for withholding and remitting taxes such as Social Security and Medicare.
- Sales Tax: Applicable if your business sells taxable goods or services.
- Other Industry-Specific Taxes: Certain sectors, like hospitality or transportation, may have additional tax requirements.
Staying Current:
Tax laws change frequently. Subscribe to updates from the IRS, or work closely with an accountant to ensure that you’re always in compliance.
Maintaining Accurate Record-Keeping
Why It Matters:
Accurate records are not only crucial for making informed financial decisions—they’re also required by law. Good record-keeping helps you:
- Prepare for Audits: Organized financial records make it easier to comply with tax audits and regulatory reviews.
- Monitor Business Performance: Regularly reviewing your financial data can help you identify trends, manage cash flow, and adjust strategies.
- Secure Financing: Lenders and investors often request detailed financial statements before approving loans or investments.
Best Practices:
- Keep both digital and physical copies of receipts, invoices, and bank statements.
- Update your records regularly—daily or weekly, depending on your transaction volume.
- Use cloud-based solutions for backup and accessibility.
Meeting Ongoing Compliance Requirements
Annual Reports and Renewals:
Most states require businesses to file annual or biennial reports to keep their registration active. These reports might include:
- Updated contact information.
- Changes in ownership or management.
- Financial statements or proof of compliance with state taxes.
Regulatory Filings:
Ensure that you are aware of any additional regulatory filings specific to your industry. This proactive approach will help you avoid fines, penalties, or disruptions to your operations.
Pro Tip: Set calendar reminders for all recurring compliance deadlines, and consider using compliance management software to stay organized.
Cost of registering a Brand in the US
The cost to register a company in the United States varies significantly by state and the chosen business structure, such as a Limited Liability Company (LLC) or a Corporation. Below is a table summarizing the initial filing fees for forming an LLC and a Corporation in each state:
| State | LLC Filing Fee | Corporation Filing Fee |
|---|---|---|
| Alabama | $236 | $236 |
| Alaska | $250 | $250 |
| Arizona | $85 | $95 |
| Arkansas | $45 | $45 |
| California | $440 | $450 |
| Colorado | $50 | $50 |
| Connecticut | $170 | $450 |
| Delaware | $160 | $159 |
| District of Columbia | $149 | $149 |
| Florida | $125 | $70 |
| Georgia | $225 | $280 |
| Hawaii | $76 | $76 |
| Idaho | $145 | $145 |
| Illinois | $256 | $256 |
| Indiana | $98 | $98 |
| Iowa | $50 | $50 |
| Kansas | $166 | $89 |
| Kentucky | $40 | $50 |
| Louisiana | $105 | $80 |
| Maine | $228 | $198 |
| Maryland | $438 | $458 |
| Massachusetts | $520 | $275 |
| Michigan | $100 | $110 |
| Minnesota | $155 | $155 |
| Mississippi | $54 | $54 |
| Missouri | $52 | $83 |
| Montana | $35 | $70 |
| Nebraska | $100 | $100 |
| Nevada | $75 | $75 |
| New Hampshire | $100 | $100 |
| New Jersey | $125 | $125 |
| New Mexico | $50 | $100 |
| New York | $200 | $125 |
| North Carolina | $125 | $125 |
| North Dakota | $135 | $100 |
| Ohio | $99 | $99 |
| Oklahoma | $100 | $50 |
| Oregon | $100 | $100 |
| Pennsylvania | $125 | $125 |
| Rhode Island | $150 | $230 |
| South Carolina | $110 | $135 |
| South Dakota | $150 | $150 |
| Tennessee | $300 | $100 |
| Texas | $300 | $300 |
| Utah | $59 | $59 |
| Vermont | $125 | $125 |
| Virginia | $100 | $100 |
| Washington | $200 | $200 |
| West Virginia | $100 | $50 |
| Wisconsin | $130 | $100 |
| Wyoming | $100 | $100 |
*Note: The above fees are based on data from Incorporate Fast.
It’s important to recognize that these are initial filing fees and do not include additional costs such as annual report fees, franchise taxes, or other state-specific requirements. For the most accurate and up-to-date information, it’s advisable to consult the official website of the Secretary of State for the specific state in which you plan to register your business.
Frequently Asked Questions (FAQs)
Do I need to register my business with the state?
Yes, if you are forming an LLC, corporation, or partnership, you must register with your state’s Secretary of State office. Sole proprietorships usually do not require state registration but may need local business licenses.
How long does it take to register a business in the US?
Processing times vary by state and business structure. Online filings for LLCs and corporations in many states can be completed within a few days, while mail-in applications may take several weeks. Expedited processing is available in some states for an additional fee.
What is the cheapest state to register an LLC or corporation?
Montana ($35), Kentucky ($40), and Mississippi ($54) offer some of the lowest LLC registration fees. For corporations, Arkansas ($45) and Mississippi ($54) are among the cheapest. However, ongoing costs like franchise taxes should also be considered.
Do I need an EIN to start a business?
If you plan to hire employees, open a business bank account, or file certain tax returns, an Employer Identification Number (EIN) from the IRS is required. Sole proprietors without employees can use their Social Security Number instead.
Can I register a business in one state and operate in another?
Yes, but if your business has a significant presence (employees, physical location, or ongoing transactions) in another state, you may need to register as a foreign entity in that state and comply with its tax laws.
What business structure should I choose?
- Sole Proprietorship: Easy to start but offers no liability protection.
- LLC: Provides liability protection with simpler management and tax flexibility.
- Corporation: Best for raising investment and growth but requires more paperwork.
- Partnership: Ideal for businesses with multiple owners sharing profits and responsibilities.
What are the tax implications of business registration?
- Sole proprietors and LLCs typically report business income on personal tax returns.
- Corporations face double taxation—corporate tax and personal tax on dividends.
- States may impose additional franchise taxes, sales taxes, or industry-specific taxes.
What happens if I don’t register my business?
Operating an unregistered business can result in penalties, tax issues, and personal liability for debts and lawsuits. You may also struggle to open a business bank account or secure financing.
Do I need a business license in addition to registration?
Most businesses require state or local licenses, depending on the industry. Restaurants, contractors, healthcare providers, and financial services often need additional permits.
Can a non-US resident register a business in the US?
Yes, non-residents can form an LLC or corporation in any state. However, they may need a registered agent with a US address and might face additional tax and banking requirements.
How much does it cost to register a business in the US?
Filing fees vary by state, typically ranging from $35 to $520 for an LLC and $45 to $450 for a corporation. Additional costs include registered agent fees, annual report filings, and business licenses.
How do I check if my business name is available?
Most state Secretary of State websites offer an online name search tool. If the name is already taken, you must choose a unique variation or file a Doing Business As (DBA) name.
Can I register a business online?
Yes, many states allow online registration through their Secretary of State websites. Some states still require certain forms to be mailed.
What is a registered agent, and do I need one?
A registered agent is a person or company designated to receive legal documents on behalf of your business. Most states require businesses to appoint one, and it must have a physical address in the state of registration.
Do I need to renew my business registration every year?
Most states require an annual report or renewal fee to keep your business in good standing. The fees and requirements vary by state.
Conclusion
You now have a clear roadmap to registering your business in the US. The process isn’t as daunting as it seems—taking the right steps now will save you from future headaches. Avoid costly mistakes by registering early.
Start by choosing your business structure, securing your name, and filing with the state. Once you’re registered, you can focus on what really matters—building and growing your business. If you need assistance, consult your state’s Secretary of State website or a business attorney to ensure everything is done correctly.