Before you start with the process of registering a company in USA, determine what type of company you want to own. There are primarily four types of companies you can form in the US. They are:
Partnerships with Limited Liability
These structures dictate the level of ownership you have in your company. For example Sole Proprietorship is a form of business that is owned and operated by a single individual, while a partnership means it is owed by two or more people with each having certain percentage of the share. Depending on the structure, there may be additional state and federal requirements that you may need to fulfill. A good example would be, in many states, sole proprietors are required to register their business in their names. Therefore, first do your due diligence and determine the type of business you want to open.
Once you’ve determined the business structure, it is time to register a business name. Firstly you will need a legal name. If you are a sole proprietor then it is your name, if it is a partnership then legal name of your company is the name in your partnership or the last names of your partners. The legal name is the most important identification and is required in every government document pertaining to your business. Therefore as a second step, register a unique business name.
Now once you have a name, you’ll need federal tax ID. All the company structures stated above are required by law to obtain an Employer Identification Number (EIN) from the Internal Revenue Services or IRS. The EIN serves as the unique identifier of your business. You can apply for this on IRS’s website at https://sa2.www4.irs.gov/modiein/individual/index.jsp In addition some states require a separate state number. You’ll need to check with your state on this. Further, you’ll need a state tax ID. Depending on your business, you’ll need a sales tax permit and/or vendor permit from your state/local government. In addition, you’ll have to pay state income and employment taxes such as workers compensation insurance and unemployment insurance tax in most states.
Finally, almost all businesses are required to acquire industry specific/general business licence or permits to operate in their respective states. It is imperative that you understand the licensing regulations; otherwise you can incur substantial penalties, including the loss of your business. Therefore, do your due diligence and follow the steps outlined here to build successfully build your company.
This is not a legal document. If you require legal advice on registering a business, please contact your attorney.
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