Are you planning to start a business in the US? It’s essential that you know all the important legal procedures that you need to follow to establish your business formally in the country.
From selecting your legal entity to setting up your business bank account, there’s a lot to do. Let’s take a closer look at what you need to know to start your business.
Steps to Establish a Business in the US
Here is the process of starting your business in the US.
1. Register Business Name
To start a business, you have to give it a name. Think of a few business names and then decide on the one that’s the most suitable for your business and register it with the Secretary of State.
To formally establish your company’s name. Along with the name registration, consider getting a trademark and buying a domain name as well.
2. Zero in on a Legal Entity Type
The next step is to zero in on the legal entity type for your business. You can choose from:
- Sole Proprietorship
- Limited Liability Company (LLC)
- Non-Profit Organization
Depending on the type of your business’ legal entity, you need to file appropriate documents with the Secretary of State.
These filings are:
- Sole Proprietorship: Doing Business As (DBA) or Fictitious Business Name (FBN)
- Partnership: Doing Business As (DBA) or Fictitious Business Name (FBN)
- Limited Liability Company (LLC): Articles of Organization
- Corporation: Articles of Incorporation
- Non-Profit Organization: Check the requirements with your state
3. File for Your EIN
To be able to do even the most basic of business functions like earn and report income, you need to get an Employer Identification Number (EIN).
This EIN, also known as a Tax ID Number, enables you to hire employees, open bank accounts, etc.
4. Create Legal Agreements
One of the most important steps in establishing a business is that of creating legal agreements. These can help you avoid hassle and legal trouble at a later stage. Some of the essential agreements you should create are:
- Operating Agreement
- Confidentiality Agreements
- Corporate Bylaws
- Independent Contractor Agreements
- Employment Agreements
5. Open a Business Bank Account
Finally, to send and receive money, you should open a dedicated business bank account. This also helps you keep your personal and business finances separate.
Want to learn more about how you can start your business in the United States? This infographic designed by GovDocFiling explains it well.
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.Last modified: January 27, 2021