Strictly speaking, there is no way to "register" a business. When people are looking for information on “how to register a business,” they generally are thinking of three separate processes: incorporating as a legal entity, registering a business name and registering a tax identity. These three steps are vital in forming any corporate identity—and having the legal protections afforded it as such. A Priori corporate lawyer can guide you through the process so you can accomplish all three efficiently and cost-effectively.
The most common process people are referring to when speaking about registering a business is incorporation. The following are the most common ways small businesses incorporate:
- C-Corporations. C-Corps are traditional corporations, taxed as separate entities.
- S-Corporations. S-Corps are structured much like C-Corps, but these corporations taxed as pass-through entities. In addition, S-Corps are more limited in terms of investors and stock options.
- Limited Liability Companies. LLCs are much more flexible corporate structures with no set requirements for their governance structure. These are typically taxed as pass-through entities and subject to fewer compliance requirements than corporations, but they cannot issue shares.
- Limited Liability Partnerships. LLPs are entities formed under state law, which often are for real estate holdings or groups of professionals.
If you are ready to incorporate your business, but are not sure how you want to structure it legally, it may be helpful to speak with a corporate lawyer to discuss the pros and cons of each option.
Registering Your Company’s Name through "Doing Business As"
Another common concern for people hoping to register a business is to register the name of their business. Most people simply do this when they incorporate: the name you give your company on incorporation documents is the name registered with the state. The less common way to register your business name is by filing a Doing Business As (DBA) or Fictitious Business Name with the state. This form allows you to apply for licenses, buy insurance, pay taxes, and sign contracts in the name of your business without the formal incorporation of your company. It’s important to note, however, that if you only have a DBA, all contracts in your business’s name are ultimately in your name without any limitations on liability.
Another common issue that people are concerned about when they are starting a business is getting a tax ID. To file the appropriate taxes, every qualifying new business needs to register for a Employer Identification Number (EIN) or Federal Tax Identification Number with the IRS. This EIN will be used every single time you file taxes, so it’s important to get yours as quickly as possible. You may also need to register with state tax services for a state tax ID as well. It may help to discuss tax issues with a corporate tax attorney before you incorporate your business.
The cost of forming a business can vary dramatically. When you hire a lawyer in the Priori network, forming a company plus drafting relevant governance documents typically costs anywhere from $300-$3500. In order to get a better sense of cost for your particular situation, put in a request to schedule a complimentary consultation and receive a free price quote from one of our lawyers.