If you plan to start a small business or a company in the United States, there are legal processes that you must know. First, you must register your business. You can register a business as a resident or a non-resident. If you are a non-resident, you must first obtain a US work visa to open a bank account. The business must comply with US tax laws, legal and economic frameworks.
Here is what you need to register a business in the United States.
Determine the Structure of the Business
Before registering a business, you need to know what structure of a business you want to start. Your business plan should state your business structure. For instance, you need to determine if your business is a sole proprietorship, a partnership, a non-profit making origination, or a limited liability company.
If your business is a sole proprietorship, you must register it under your name, or you can choose to register it as Doing Business As (DBA) name. You can change the structure of your business even after registering it. For instance, you can start as a sole proprietorship and expand to a limited liability company.
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Register Your Business Name
If your business is a partnership, you must register its legal name in the partnership agreement. However, if it is a sole proprietorship, the legal name is that of the proprietor. For limited liability companies, the legal names are those registered with the authorities.
You must ensure that the business name you select is not in use by another entity. Therefore, before registering a business name, research and determine if it is in use by another business entity. Ensure that the name you choose is impressive, easy to remember, and reflects the niche of your business.
Get a Federal Tax ID
Your business must get an Employer Identification Number (EIN). You can apply for it online, or you can check with your respective state authorities. Your employees must also register to pay taxes. You will need the EIN when opening a bank account for your business.
Register the Business within the State of Operation
In addition to EIN, you must also register your business with the state revenue agency. You will need to get a vendor's license, which you can get from the state government. It will help you when paying local taxes. Some of the taxes that your business needs to pay are:
- Income taxes. For limited liabilities companies, the owners and the businesses pay taxes independently. However, for sole proprietorship, owners pay personal and business taxes.
- Employment taxes. Businesses that have employees must remit taxes from employees' salaries to the tax agencies. In some states, companies need to pay temporary disability insurance for their employees.
Get Licenses and Permits
Every business needs a permit to operate in any state within the US. Small businesses need to get a business license specific to their operations in the state they are operating in. Some companies may require permits from various levels of government, like the state and the federal governments.
Therefore, make sure that you are aware of the permit rules within the areas you are operating in. Failure to comply with the licensing requirements will lead to fines and penalties for your business.
Opening a Bank Account
Once you have registered your business with the necessary agencies, you need to open a bank account for your business. It is important to separate personal finances from business finances. It is also the best way of paying business taxes. You will also get to know how much your business is making every year.
To open a business account in the US, you will need the following documents:
- Federal Employer Identification Number (EIN)
- Proof of business address
- Registration documents of the business like license and permits
- Proof of address of the owners