Now that you have decided on your business’s structure and selected your business’s name, what follows is registering your business with the respective authorities. Business registration is the process of making your business formally part of the business register of a country. Any business in any structure doing business using a name different from its own legal name will need to register the name of the business.
Registering a business typically involves filing paperwork with a state agency, such as the secretary of state’s office, to create a legal entity. Depending on the type of business, you may need to pay fees, obtain licenses, and obtain other permits. Additionally, you may need to complete paperwork to create a business name and open a business bank account.
Business registration may take the form of registering an assumed name or forming a business entity.
Registering an Assumed Name
An assumed name means a name other than the legal name of an individual. We call assumed business DBA meaning “doing business as” name. Using and registering an assumed name is the same as telling the public that you are doing business in a name other than your legal name.
Why do we use assumed names?
An assumed name means a name other than the legal name of an individual. Using and registering an assumed name is the same as telling the public that you are doing business in a name other than your legal name.
We use assumed names due to the following reasons:-
- The legal name is difficult to pronounce.
- Want a name that does not restrict growth? You may wish to sell more than one product and the current name does not reflect a catchy meaning to the business
The use of assumed names can be beneficial for individuals and businesses, but it can also create potential disadvantages as follows:-
- It can be difficult to prove your identity if you use an assumed name.
- It can make it difficult to open bank accounts, obtain credit, and obtain certain government benefits.
- Using an assumed name may limit your ability to build a professional reputation, since you may not be able to receive credit for your work.
- Using an assumed name may be illegal in certain jurisdictions, depending on the purpose.
- Finally, using an assumed name may lead to confusion and can even result in legal or financial problems if you are not careful.
Registering a Business Entity
Registering a business entity means creating a legal business entity such as a corporation, LLC, or partnership. Doing so establishes a distinct legal entity that carries its own rights, privileges, and liabilities separate from its owners. It also provides legal protection to the owners of the business, helping to protect them from personal liability if the business is sued or fails. It is important to register a business entity to ensure that all of the necessary steps are taken to make the business legally compliant.
The Process of Registration
The process of registering your business touches the taxation issues, registration with legal authorities, and the Lega; system. follows the following steps.
1. Choose a business structure:
Before registering a business, it is important to determine what type of business entity is most suitable for your needs. Common business structures include sole proprietorships, partnerships, limited liability companies (LLCs), and corporations.
2. Name your business:
You will need to choose a name for your business that is not already in use by another business entity.
3. Register with the state:
Depending on the type of business structure you have chosen, you will need to register with the state in which you plan to operate. This may involve filing paperwork with the Secretary of State’s office, as well as paying a filing fee.
4. Obtain a business license:
Depending on the type of business you are operating, you may need to obtain a business license or permit from the city or county in which you plan to operate.
5. Register with your Tax Authority
Once you have obtained an EIN, you will need to register with the IRS to obtain a tax identification number. This is used for filing taxes and other financial reporting purposes.
6. Open a business bank account:
To keep your business finances separate from your personal finances, you will need to open a business bank account.
7. Comply with tax requirements:
Depending on the type of business you are operating, you may need to file quarterly and/or annual tax returns according to the rules and regulations applicable to your country.
Advantages and Disadvantages of Registering a Business
Registering your business name is an important step in establishing a business. It legally recognizes your business and provides protection for your brand. However, it can also be a costly and time-consuming process. In this section, we will discuss the advantages and disadvantages of registering your business with the state.
Advantages of Registering Your Business Name
1. Legally Recognized:
When you register your business name, you are legally recognized as a business entity. This means that you can obtain business licenses, open bank accounts, and enter into contracts in the name of your business.
2. Brand Protection:
By legally registering your business name, you are protecting your brand from being used by another business. This also helps to prevent confusion between your business and a similar business name.
3. Access to Business Resources:
Many business resources are only available to businesses that are legally registered. This includes access to grants and other types of funding, as well as specific kinds of business services.
Disadvantages of Registering Your Business Name
1. Cost:
Registering a business name can be costly. Depending upon the location and the type of registration, you may need to pay filing fees, as well as legal fees.
2. Time:
You will need to spend time researching the registration process and filing the appropriate paperwork. This can take away from the time you could be spending running your business.
3. Renewal:
You may need to periodically renew your business name registration, depending upon the location. This will require additional time and money.