- Step 1: Clarify what you are registering
- Step 2: Choose a business structure (high level)
Registering a business turns an idea into a recognized legal operation. The exact steps depend on your entity type, state, and industry, but the workflow is almost always: choose a structure, file the right documents, obtain tax IDs, and complete local compliance (licenses, permits, and registrations).
Key Takeaways
- Choose your entity type first (sole prop, LLC, or corporation), then file formation documents with your state's secretary of state
- Apply for an EIN through the IRS website for free, which you need for bank accounts, hiring, and tax filings
- Complete local compliance by obtaining city or county business licenses, state tax registrations, and any industry-specific permits
This guide gives founders a practical roadmap—what to do first, what to outsource to a lawyer or CPA, and how your financial systems should evolve on day one.
Step 1: Clarify what you are registering
“Registration” means different things:
- Forming an entity (LLC, corporation) with the state
- Registering a trade name (“doing business as”)
- Obtaining an EIN from the IRS EIN application page for banking and taxes
- Registering for sales tax or payroll accounts when applicable
Sole proprietors may need fewer formation filings but still might register a DBA and obtain local licenses.
Step 2: Choose a business structure (high level)
Before you file, decide whether you will operate as:
- Sole proprietorship — simplest, but no liability shield
- LLC — flexible, popular for small businesses
- Corporation (C or S) — more formal governance; S-corp status is a tax election with eligibility rules
This choice affects liability, taxes, fundraising, and administrative cost. If you expect profits quickly, have partners, or operate in regulated industries, invest in a short consultation with an attorney and CPA before filing.
We cover structures in more depth in our resource hub startup section—pair this article with guides on LLCs, sole proprietorships, and business entities.
Step 3: File formation documents with the state
For an LLC, you typically file Articles of Organization (names vary by state) and pay a filing fee. For a corporation, you file Articles of Incorporation.
Tips:
- Use the legal name consistently across filings
- Designate a registered agent if required
- Confirm whether you need a foreign qualification if you are based in one state but operating heavily in another
After approval, keep digital copies of filed documents—you will need them for banks and vendors.
Step 4: Get an EIN
An Employer Identification Number is free from the IRS and commonly required to open a business bank account, hire employees, and establish business credit. Even solo founders often obtain an EIN to avoid sharing an SSN with every vendor.
See our taxes hub for a focused explanation of what an EIN is and how it differs from an SSN in daily operations.
Step 5: Open a business bank account
Separating business and personal finances is non-negotiable for clean books, easier tax filing, and professional client experience. Banks usually want:
- Formation documents
- EIN confirmation letter
- Operating agreement or corporate bylaws (often requested even for single-member LLCs)
Read our dedicated guide on opening a business bank account for a checklist tailored to founders.
Step 6: Licenses and permits
Depending on your city, county, and industry, you may need:
- General business license
- Professional license (healthcare, cosmetology, contracting, etc.)
- Health permits for food businesses
- Home occupation permits if you run a home-based business
Do not assume an LLC filing replaces local licensing—they are separate systems.
Step 7: Set up financial operations early
From your first paying customer, you should be able to answer:
- Who owes me money and for what deliverables?
- What did I spend and was it business or personal?
- What is my monthly burn if I have fixed costs?
Modern founders typically adopt:
- Invoice software for clean receivables
- Expenses and receipts tracking so deductions are defensible
- Timesheets and time tracking if you sell time
Compare capabilities and cost on pricing and explore calculators in tools.
Step 8: Plan taxes before they surprise you
If you earn profit as a sole proprietor or LLC owner, you may owe self-employment tax and quarterly estimated taxes. If you hire employees, you enter payroll tax compliance.
Registration is not only “legal”—it is the foundation of tax accounts you will use for years.
Common mistakes new owners make
- Using a personal Venmo for business without documentation
- Filing an LLC then never adopting an operating agreement (especially with partners)
- Ignoring sales tax nexus because “I only sell online”
- Mixing brand name and legal name on contracts and invoices
When to hire professionals
Hire help when you have co-founders, investors, employees, or multi-state operations. A modest legal and accounting spend early prevents expensive cleanup.
Takeaways
- Register the entity, obtain tax IDs, and complete local licensing.
- Separate finances on day one.
- Stack invoicing, expenses, and time tracking as you scale.
Educational content—not legal advice. Requirements vary by location and industry.
Start sending professional invoices today with Billed, free for small businesses.
Frequently Asked Questions
What is the first step to registering a new business?
The first step is choosing your business structure (sole proprietorship, LLC, or corporation) because this determines which registration documents you need to file. Once you have chosen a structure, check name availability with your state, file formation documents, and apply for an EIN from the IRS.
How much does it cost to register a business?
Costs vary by state and business type. LLC formation fees range from $50 to $500 depending on the state, with annual report fees of $0 to $300 thereafter. Sole proprietors may only need a city business license ($50-$200) and a DBA filing ($10-$100). Federal EIN applications are always free through the IRS website.
Do I need a lawyer to register my business?
Most simple business registrations like sole proprietorships and single-member LLCs do not require a lawyer and can be completed through your state's online filing system. However, if you are forming a multi-member LLC, any type of corporation, or a business in a heavily regulated industry, a brief consultation with a business attorney can prevent expensive mistakes.