Under certain conditions, it is also possible to operate as a sole trader without registering your business. However, choosing to incorporate and register your business increases customer trust and provides protections that sole proprietorships lack.
If you're still in the planning stages of your business, check out our How to Start a Business guide to help you get off the ground.
When you're ready, read how to register your business with state and local agencies.
How to register your business
- Please select a business name
- Select the business structure you want to register
- Register your Employer Identification Number (EIN)
- Check the requirements for each office
- Register for taxes
- Apply for a trademark
Whether you're registering your business as a sole proprietorship or as a separate business structure, the process of registering a new business is very simple. Still, it's important to register your business properly to avoid complications in the future.
1. Choose your business name
It probably goes without saying that your online store needs a name, but choosing an available, brand-based official name for your business can be difficult. When brainstorming a business name, it's best to cast a wide net first and then narrow it down to the most important ideas. (Need help coming up with ideas? Contact Shopify's business name generator.)
Once you've found a few favorites, you'll need to check to see if they're available. Search your local jurisdiction's business database to see if other businesses have registered with a similar name.
Other important considerations when choosing a business name include:
- Social media. Are relevant social media handles available, or is the name you choose already used by someone else?
- Domain name. Perform a simple domain name search to see if your brand URL is available.
2. Select the business structure you want to register
Before registering your business, you must choose a business structure and incorporate it as such. Common business structures include limited liability companies (LLCs), corporations (including C corps and S corps), partnerships, and limited liability partnerships (LLPs).
For more information on the most common business structures, check out our guide: The 4 Most Popular Business Types and How to Choose Them.
Each business structure requires a different process for registration. For example, sole proprietorships do not need to do anything. On the other hand, businesses must file articles of incorporation or similar corporate documents. Choose an LLC? Check out our state-by-state guides to California LLCs, Texas LLCs, and Florida LLCs.
3. Register your Employer Identification Number (EIN).
Regardless of your business structure, your employer identification number (also known as your tax identification number) is important. This protects your Social Security Number (SSN) and establishes your business as a separate legal entity. This means your business can build credibility and hire employees.
You can apply for an EIN on the IRS website.
4. Check the requirements for each office
Just as each business structure has its own registration process and requirements, so too does each location have its own parameters. It is important to check with your federal, state, and local agencies to find out what is required to legally register your business.
Additional steps may include permit requirements, licenses, articles of incorporation, forms, fees, etc.
5. Tax registration
In most locations, businesses must pay sales tax and possibly other applicable taxes and fees. Sales tax varies by state, so you must register in each state where you plan to sell.
Some states do not collect sales tax, so store owners are not required to register their business for tax purposes. These conditions include:
- alaska
- Delaware
- montana
- new hampshire
- Oregon
For the remaining states, please contact them directly to find out what the process entails.
let's start: Shopify uses default tax settings for your online store, but you can customize your sales tax settings in your admin dashboard.
learn more: Basics of small business accounting: 12 steps to get your company back on track
6. Apply for a trademark
If you launch a brand or product with a unique name, logo, feature, or slogan, you may be eligible for trademark protection. A trademark is a “source identifier” that helps consumers recognize a brand or product.
Although it is possible to establish a trademark “informally” by doing business and establishing a reputation, a safer method is to register it on your own or with the help of a trademark attorney with the corresponding trademark office. It is to do. This ensures that your trademark is protected from other companies who may try to use your idea for their own benefit. At a minimum, trademark your business name with both the state and federal governments.
Tips for registering your business
There are a few things to keep in mind as you go through the process of registering your business.
organize
Before you start filling out your application, make a list of what you need. This includes basic personal and business information, EINs, forms, licenses, permits, fees, etc. Please have this information on hand to expedite the application process.
hire help
For more complex business registrations (e.g. in highly regulated industries), we recommend seeking professional help. A qualified tax professional or business attorney can guide you through the process, answer any questions you may have along the way, and even take over some steps for you. Shopify Partners provides a directory of tax professionals who can help you with U.S. state sales taxes and legal obligations.
keep up to date
For the most up-to-date information on business registration requirements, it's always best to check directly with official sources specific to your location and industry. Make it a habit to check your licenses, permits, and registrations every year. It's a good idea to check this at tax time to ensure you are accountable and don't forget. Set calendar reminders for expiration dates and renewals as well.
Start your business with Shopify
Now that you know how to register your business, you can start thinking about how to run your business. Shopify provides tools and integrations that make it easy to manage every aspect of your business. Build your virtual business command center with thousands of third-party apps and integrations to choose from.
Disclaimer: These guides are for informational purposes only and do not constitute professional legal or tax advice. Please consult independent legal and tax advisors for information specific to your country or situation. Shopify is not responsible in any way for your use of or reliance on these guides..
Frequently asked questions about how to register your business
Can I do business without registering?
If you are a sole proprietor, you can operate your business without registering. There is no formal process required before making your first sale. As time passes and your business grows, you will want to register and incorporate.
Is it important to register a small business?
Although small business registration is not always required, registration helps consumers know that your store is a legitimate operation and may be required for financial tasks such as qualifying for a loan. There is also.
Do I need to register my small business with the IRS?
Although you probably don't need to register your business with the federal government to form a corporation, registering with the IRS gives you a federal tax identification number, which protects your identity and allows you to open business credit or bank accounts. Helpful.
How much does it cost to register a business?
The cost of registering a business (usually an application fee) varies by state. Depending on what business structure you have, costs can be higher or lower.
