Establishing a business requires that you do many things — all at the same time. From finding a company name to hiring employees and finding funding — there’s just so much to do. E.g. check for defective products in a workplace.
Add to all of this the pressure of legally establishing your company and the various steps that are involved in the process.
To simplify this for you, we’ve outlined all the steps that you need to follow to legally set up your business.
Steps to Establish a Business
Let’s look at how you can establish a business without a lot of effort.
1. Register Your Business Name
The first thing that you need to do when starting your business is that of giving it an identity in the form of a legal name. For this, you should start ideating and coming up with a few names for it. From there, you should choose one and get it registered.
And that’s not all…
It’s also recommended that you get a trademark for it along with a domain name.
2. Complete State and Federal Filings
The next step is to find a legal entity for your business and complete the state and federal filings for it. You should choose your business entity after due consideration of all the pros and cons of each.
Here are the most popular legal entities you can choose from along with their respective filings:
- Sole Proprietorship: Fictitious Business Name (FBN) or Doing Business As (DBA)
- Partnership: Fictitious Business Name (FBN) or Doing Business As (DBA)
- Limited Liability Company (LLC): Articles of Organization
- Corporation (S-Corp and C-Corp): Articles of Incorporation
- Non-Profit: Depends on your state.
3. Get a Tax ID
Just like an individual needs a social security number (SSN), a company requires a tax ID or employer identification number (EIN) to do even the most basic business transactions.
These include opening a business bank account, hiring employees, and even signing contracts.
4. Create Contracts or Agreements
You must also draft and create contracts or agreements when starting a business. These can help you avoid loads of legal fees when any disagreements arise at a later stage. Some important contracts you should consider creating are:
- Corporate Bylaws
- Operating Agreements
- Confidentiality Agreements
- Independent Contractor Agreements
- Employment Agreements
- Non-Disclosure Agreements
5. Open a Bank Account
Finally, to be able to receive or send money, you should have a bank account for your business. For this, you need to provide your EIN, company formation documents, business income, etc.
To learn more about what you need to do to start a business legally in the United States, check out this infographic designed by GovDocFiling.
Image Courtesy: GovDocFiling
Brett Shapiro is a co-owner of GovDocFiling. He had an entrepreneurial spirit since he was young. He started GovDocFiling, a simple resource center that takes care of the mundane, yet critical, formation documentation for any new business entity.