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10 Steps to Form a Business

Forming a business in the United States can be a confusing and stressful process, unless you’re prepared and you’ve got a good idea of what you need to do. Incorporate.com presents this guide to forming a business to help you along the way.

STEP ONE Do you have a
company name?
YES
NO
A good first step is choosing the
right name. Try to think of something memorable
STEP TWO Is your chosen
name available?
YES
NOT SURE
Use a name reservation service
to check what is available for you
STEP THREE Is the URL
available?
YES
NO/NOT SURE
Is your company name available
as a URL?
There are services that can help
STEP FOUR Time to
register your URL
DONE!
HOW?
Once you find
an available name you’re happy with, be sure to
register it.
STEP FIVE Choose the State you
want to register in
 
HOW?
You don’t need to form your business in the same state as you are physically located
STEP SIX Choose your legal
business structure
DONE!
READ MORE
LLC, C-Corp, S-Corp and Non-Profit are all examples.
Learn about the differences
STEP SEVEN Appoint a
registered agent
DONE!
NO
State law requires a business has an ‘agent’, responsible
for legal and tax documents
STEP EIGHT Obtain an
EIN
DONE!
WHAT IS IT?
The corporate
equivalent to a Social Security
Number
STEP NINE Open a bank
account
DONE!
READ MORE
Keep personal and
business accounts
separate
STEP TEN What licenses do
you require?
 
READ MORE
A complicated,
but essential
business requirement

Company Name

The name of your company has many implications in today’s
global market, where Internet searches and social media play a key
role to the success of your business. There are a number of things
to consider about your company name, which is why we
recommend individuals put a lot of thought into it first before
they begin their formation.

Name Reservation

Even if you are not ready to form a corporation, there
are services that allow you to search to see if your intended
business name is available. The most comprehensive search is
done on the state level through municipal website. A more
general search can be done here. Only use this site as a general
guide. The most accurate search should be done on a state
level (state which you are intending to form your business) or
through a service such as The Company Corporation. Consider
alternative names before embarking on your search to help save time.

Website Name

Once you have established a unique and memorable business
name, your website name should be no different. Although it is
NOT necessary to have a URL, or website, in order to form a
company, it is highly recommended in today’s world of digital
commerce and is best addressed in the early stages of a formation.
There are many services that allow you to search URL name
availabilities for free, such as www.whois.com. If you cannot
replicate your same business name in a URL, try to come as close
as possible. Also, consider social media variations for your
company name for sites such as Facebook, LinkedIn and Twitter
to name a few.

Registering your Domain Name

Many of the sites that allow for free name searches will also
offer registration for a fee, such as Go Daddy. The .com extension
is the most desired, but consider also purchasing a few other
extensions such as .net, .org and .biz. As mentioned before, it is
NOT necessary to have a registered URL to form a company
but it is highly recommended by formation specialty companies
such as The Company Corporation and best established
early in the process.

Choosing a Business Structure

Limited Liability (LLC) and Incorporation (Inc) are the most
popular structures that small businesses form. They both offer
protection from personal liability, but there are significant differences.

  1. Learn more about LLCs - Limited Liability Company
  2. Learn more about Corporations - C-Corps
  3. Compare all types of formations at once - Comparison Chart
  4. Which formation is right for you - Formation Wizard

Appointing an Agent

There are companies that specialize as registered agents for
any type of service or business. Their primary responsibility is to
keep accurate and complete records of all your entity transactions,
litigation and service of process. This provides reliability and
convenience so you can focus on your true business goals.
Companies that specialize as registered agents include:

  1. The Company Corporation
  2. CSC Global
  3. Registered Agent Comparison Chart

EIN Number

Much like a social security number, an Employer Identification
Number or EIN (also known as Federal Employer Identification Number
or FEIN) is a nine-digit number that identifies a business entity. It is
required on all tax filings for the entire life of the business.
Corporations, most LLCs and all businesses with employees must
have one of these. Although EIN’s are officially issued by the IRS,
formations specialty companies, such as The Company Corporation,
can help obtain an EIN from the IRS on your businesses behalf to
help make it fast, easy and convenient for you.

Business Accounts

To protect your corporate or LLC veil, your businesses must maintain
separate personal and business accounts and records. Establish a
separate business bank account so that your personal assets are not
mixed with business funds. Banks may also require an Employer
Identification Number (EIN) in order to open a business checking account.

Business Licenses

Most state, county and local governments require companies to have the right
licenses and permits in place before they open their doors. There are over
150,000 filing jurisdictions across the country, all with specific requirements.
Depending on your particular industry and where you are, any number of
licences may apply to your business. Failure to obtain the correct business
licenses or permits can end in fines, notices and forced closure of your business.

  1. State License: state licenses are usually required for personal or professional
    services like accounting, contracting, or cosmetology that have specific
    industry standards.
  2. Federal License: federal licenses are required for businesses that are highly
    regulated by the federal government, such as ground transportation, preparing
    meat products, manufacturing alcohol or tobacco or providing investment
    advice.

For more comprehensive information, download this free business license guide

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