How to Register Your Business With Government Entities
Federal, State, and Local Registrations
When you are starting a business, you need to make sure your business is registered with the proper federal, state, and local agencies. Find out where and how to register, including:
- Federal identification for business income taxes, payroll taxes, and registration for online payments
- State business entity registration and sales tax permits
- City and county business identification, licenses, and zoning permits
If your business has even one employee, you must have an Employer ID. You can register online and receive your number
If your business has employees, you will also need to register with the IRS Electronic Filing and Tax Payment System. (EFTPS). This system is required for payroll tax payments and optional for income tax payments. You can sign up and receive a password within a few weeks, and you're on your way to easy payments.
State Filing for Business Entity
If you are starting a sole proprietorship, you don't need to register as a business entity with your state, but all other types of businesses must register.
You register your business as the type of legal entity you want: corporation, partnership, or LLC. There are also sub-categories of partnerships and LLCs. (You don't register an S corporation with your state; you select this option after your corporation is in place.)
To file your business type with your state, you will need to go to your state's Secretary of State website and look for the business division. The process is different for each state.
If you do business in more than one state, you will need to go through this registration process in each state. For the additional states, you would register as a "foreign" business entity, after registering with your first state as a "domestic" entity.
If your company does business in a state, it is considered to have a tax presence or tax nexus in that state. Doing business in a state triggers state income tax, sales tax, excise taxes, and state employment taxes (if you have employees).
Income tax. Register with your state's taxing authority (sometimes called the revenue department) to pay state income taxes for your business and also to collect, report, and pay income taxes for your employees.
Seven U.S. States have no income tax: Washington, South Dakota, Nevada, Wyoming, Alaska, Texas, and Florida.
Sales Tax. If you are selling products or services that are subject to sales tax, you must apply for a tax seller's permit with your state, from your state's department of revenue. Most states have put this process online, so it is relatively easy to do.
After you register, you'll need to set up the process for collecting, reporting, and paying state income taxes.
Five U.S. states have no statewide sales tax: New Hampshire, Delaware, Alaska, Oregon, and Montana.
State employment taxes. If you have a tax nexus in a state and you have employees, you will need to register with your state's employment bureau, for several reasons:
If you are doing business in several states, you need to register with each one. You register in the first state as a domestic entity, then as a foreign entity in additional states.
For example, if you register an LLC in Ohio and then you register as an LLC in Michigan, the Ohio registration is as a domestic entity and the Michigan registration is as a foreign LLC.
If your business is operating under a different name from the official name of your business, you must file a D/B/A (Fictitious Name or Trade Name) registration with your county. For example, if your business is Extreme Enterprises LLC and you have stores called Credit Mart, you must let the public know who owns those stores.
Your state may also require you to register your business name with the state business division. Check the requirements for your state. If you have a sole proprietor business and your business isn't registered with your state, it's a good idea to register your business name with your state so someone else doesn't use it and cause confusion.
Although every locality has slightly different regulations, almost all have the same types of rules you must follow. For example:
- If you are building a new building, you will have to apply for building permits
- You need to be aware of zoning, and you may need to apply for a zoning variance
- If your business is involved in handling food, you will need to get a health permit
- It's a good idea to have a fire inspection before you move into your new location
Another way to register your business is to trademark it. Registering your unique business name with your state isn't enough to protect it from being stolen both in the U.S. and internationally.