Small Business Registration
Summary: If you want to own and/or operate a business, you’ll need to address business registrations. In addition to the anticipated IRS or CRA registration, you’ll need to know about state/province, local and other registrations.
So, you want to own and operate your business. It doesn’t matter if you want to operate as a sole proprietorship, partnership or any of certain corporation types. One of the first things you’ll need to do is register your business. This applies to both U.S. and Canadian businesses.
There are several aspects to registering your business. First, you may want to obtain a U.S. federal Employer Identification Number (EIN) or a Canadian Business Number (BN). This lets the national government (U.S. Internal Revenue Service or Canada Revenue Agency) know that you exist. It is not required for sole proprietorship's, but is for any form of corporate entity. And depending upon your home-based state (or province), it may be a requirement.
You may also need to register your business with your state/province, county and/or city/town. Such registration is used for collecting sales and use taxes, assessing annual registration business registration fees and other purposes.
Note that these registrations do not protect your corporate name, any doing business as (DBA) names, any trademarks or service marks and any other aspect of your business. You will need to register each of these, as required. For corporate names, you can just register these with your state/province or you can undertake a nationwide search to ensure that your use is not in violation of another business’ use.
The easiest way to begin the process is to log onto your state’s/province’s web site and search for “registering a business.” If you have any difficulty navigating the web, you can usually find a contact phone number and/or e-mail link.
At the local level (county, city/town), there is usually an office that you can visit or call. Be prepared for a spate of questions including topics such as type of business you are running, where you are working from (home or business office), when you formed the business, and how many employees are working for you. In some communities, home-based business offices are not allowed.
If you want to open a physical site for your business, you will likely have to do more than sign a lease agreement. In some places, you can count on having to get a fire inspection, meet zoning requirements and satisfy signage guidelines.
Once your business is registered and you are ready to begin work, you still have to ponder other registrations. Whatever the type of business you operate, the minute you bring a salaried employee online (as opposed to an independent contractor), you’ll be liable for payroll, Social Security and similar taxes and fees. And you will need to be sure you register for these quickly so that you don’t incur any penalties.
Regardless of the general framework presented here, anticipate that you will have to do additional research to meet any specific requirements for your geographical location and/or business type. In fact, the more homework you do initially, the fewer difficulties you will encounter as you go through the registration processes.
Here are few web links to get you started:
Small Business Registration 101
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