- HoneyHat

What do I need to register my business?

While you can operate a business without having to register it, it is a smart idea to incorporate it when your business grows. Businesses are made official by the government. It also ensures that both your personal assets and business assets remain legally secure.

Steps to Register Your Business

Although it is not difficult to register your business, you will need to follow the correct steps. You will need to follow these steps in order to register your business as a legal entity.

1. Name Your Business

Every ecommerce entrepreneur must take the first step to register their business by and choose a name.

You must choose a name that is memorable for your online shop. It should be something that will grab the attention of your customers and make a lasting impression. You should ensure that your name is relevant to your niche and you can build a marketing strategy around it.

It can be difficult to choose a name for your business that will last. Take a look at your competition and compare the names they are using. Take a look at the names of ecommerce businesses you like, and compare your idea with them. Is your idea unique? What can you do to make your idea stand out from the rest? To get some ideas for your business name, you can use the business name generator.

2. Registering a business name

You’ve just created a name for your ecommerce company. This is the easiest part of registering an ecommerce company. It is crucial to ensure that your business name has not been registered with the United States Patent and Trademark Office. Any registration of a business name already registered in the USPTO’s system will be rejected by the USPTO. The application will be rejected and you’ll lose all processing fees.

You can avoid these problems by checking your local business directories to see if the name you want is available. To check if your business name exists, you can use USPTO’s free tool.

Future-Proofing Your Company Name

Once you have chosen a memorable name for your business, think about the long-term goals. Is your business name future-proof? Is it able to withstand the test of time?

Avoid choosing a business name that is influenced by a current trend. You may be successful initially with your ecommerce company if you name it “Selfie Stick Corporation”, but what popularity will you have over the years?

Before you register your company, it is important to think about the name’s durability. It will be difficult to change your name later. It is difficult to change your name after you have established an ecommerce company. This can also cause confusion for existing customers.

3. How to Choose Your Business Entity

Once you have chosen a name for your ecommerce store, you will need to decide on the type of business entity that best suits your online business. You have two options: incorporation or registering your company as an LLC. We have broken down the key points so that you can make an informed decision about which option is best for you.

LLC

Creating an LLC for your business will take less paperwork than if you were to incorporate. This means you can spend more time on your store’s launch.

You won’t be held responsible for any company debts once your LLC is registered. If anything happens to your company, your personal assets such as your savings, car and house, will be fully protected.

An additional benefit to registering as an LLC is the ability to rent out your personal assets. You can claim the cost of a home office for your ecommerce business as a business expense. This will allow you to save money that you can use for other business aspects.

Corporation

Most people think of corporations as multi-million dollar businesses with hundreds of employees. However, incorporation is simply the process of transforming a sole proprietorship to a legally recognized entity.

Businesses have two options when incorporating: registering as an “S” corporation or a “C” corporation. You don’t need to register as either of these entities. It is up to you to decide which option is best for your ecommerce company.

You can register your ecommerce company as an “S” corporation to get the option of ‘pass-through taxation“, which means your business won’t be subject to tax at a business level. Instead, income tax will be paid on the revenue generated by your ecommerce company, but not the actual business.

However, C corporations are treated as separate entities when it comes to taxation. This means that your ecommerce company will be subject to the double taxation. You’ll be taxed both on your profits and your personal income.

No matter what structure you choose, it’s not a fixed one. You can change your business structure as your business grows.

4. Select the state where you’ll register

Consider carefully where you will register your ecommerce company. Tax rates can vary from one state to the next. You don’t have to register in every state where your small business is located.

It’s a smart move to register a new company in a state with low or non-existent sales taxes. This will save you money later. This is a great option for Amazon, the largest online retailer in the world.

Take a look at the tax rates in each state and determine which one is the best for you. There are some states that don’t charge sales tax and have no registration process. Examples include:

Delaware
Montana
Oregon
Alaska
New Hampshire

To register in other states, contact your local office.

5. Obtaining Your Business’ Federal Tax Number

Also, you will need to register your company on a federal level. You will need a federal tax ID for your ecommerce company. The federal tax number, also known as an employer ID number (EIN), is the equivalent to a social security number for your company.

It is essential to get an EIN number for your company as you will be filing tax returns and reporting on business activity. You won’t have the ability to submit tax forms to the federal or state governments without this number.

Apply online to get your EIN number for your ecommerce company. This is a very simple form that can be submitted online. You will receive your EIN number the same day as you submit it.

6. Opening a Business Bank account

The documents required by banks in the USA to open a bank account for a small business are part of small business registration. If ecommerce entrepreneurs want to open a bank account, they must know how to register an internet business.

You’ll find opening a business bank account is a great way for entrepreneurs to keep your personal finances separate from the funds you use to fund their ecommerce ventures. A business account can also be useful for tax purposes. You’ll be able invoice payments and claim them to your business expense.

A business account can give you an accurate picture of how much your business costs each month. You’ll also know exactly how much your ecommerce business makes.

This will also increase your ecommerce company’s professional credibility. Customers will pay for orders through your business account and not your name. This distinction gives your customer confidence that you are legitimate.

What is the cost to register a business?

Unofficially registering a small business is free. However, depending on where you are incorporated in, you might have to pay sales taxes.

Summary: How to Register a Company in 2023

You now know how to register a company and can start a legitimate ecommerce store. After you have completed the registration process described in this article, your company will be treated as a legal entity. You will be officially the owner of a professional company.

Here are the 6 steps needed to register a company:

Select your business name
Register with USPTO
Choose your business entity
Choose the state that you will register in
Get your Employer Identification Number (EIN).
Open a bank account for your business

We are happy to answer any questions you may have about the legalities involved in registering a company in the USA. All questions are valid questions.

Shopify allows you to start selling online right away

Get a free trial

Want To Learn More?

Are there any other topics you would like to learn more about or wish were included in this article. Comment below to let us know!

Author: Andrew Roach

Need Help Finding B2B Service Provider?

Table of Contents