- Federal employment identification, payroll tax registration, registration for online payments
- State business entity registration and sales tax permits
- City and county business licenses, zoning permits
Almost every business needs to register with the IRS and have an employer ID number (EIN). Even if you are a sole proprietor with no employees, your bank will most likely require you to have an EIN.
If your business has even one employee, you must have an Employer ID. It's easy to get; you can apply online or by phone and receive your EIN immediately
The IRS has made it easy for businesses to file and pay federal taxes - income taxes and payroll taxes - online, using the Electronic Filing and Tax Payment System. You can sign up and receive a password within a few weeks, and you're on your way to easy payments.
This system is used to pay all employment taxes (FICA taxes for Social Security/Medicare and federal income tax), and unemployment taxes.
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. 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 (LLCs, partnerships, and corporations) must register.
If you do business in more than one state, you will need to register in each state.
If you are selling products or services that are subject to sales tax, you must apply for a tax 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.
State registration is necessary if you are "doing business" in a state. The definition of "doing business" is different for income tax and for sales taxes; this article describes the requirements for each.
- If you need to register in another state for income tax purposes, you will need to register as a "foreign" entity (a foreign LLC, for example). See item #3 to learn how to register for income taxes in a state.
- If you need to register in another state for sales tax purposes, see item #4.
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.
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
How to Register Your Business With the Proper 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: