How to Register a Business: a Step-by-Step Guide for Small Businesses

Registering a business sounds simple enough—until you actually get started. Juggling legal structures, state tax forms, licenses and permits, and the dreaded IRS paperwork can leave you wondering if you’re missing steps along the way.

This guide will walk you through how to register a business in the U.S., including business name registration, choosing your small business structure, key state and federal requirements, and how to register online and with the IRS.

TL;DR: Small business registration

Want to make sure you’ve got a basic idea of how to register a business? Here’s a quick rundown of the steps and costs to keep in mind.

How to register a small business in the United States:

1. Determine your business structure: sole proprietorship, partnership, corporation, or Limited Liability Company (LLC)
2. Register a business name
3. Register with your Secretary of State
4. Register your business with the IRS and secure an EIN if needed
5. Apply for local licenses and permits

Costs of small business registration:

• One-time costs like initial filing fees: $40 to $500, depending on the structure and location of your business.
• Business license costs vary widely by city, county, and industry.
• Ongoing costs like LLC annual fees can range from $15-$800+ annually. Name registrations for DBAs can cost $10-$100 with renewals every few years.
• “Free” registration usually refers to no-cost items like getting an EIN from the IRS.

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What does it mean to register a business?

Registering a business means completing the administrative tasks that turn your business into a legal entity that’s recognized by the state and federal government. Once registered, your business can open a bank account, hire your first employee, and pay taxes.

Business registration can also create a legal separation between you and the business, depending on the structure you choose. This keeps your personal assets protected if the business ends up facing lawsuits or financial struggles. 

Some people confuse business name registration and getting a business legally established. Think of it this way: you need a name to put on a baby’s birth certificate, but that’s not the same as applying for a social security number!

How to register a business in the US (step by step)

It’s true that there’s a to-do list that comes with registering a business, but it isn’t infinite. Here’s a step-by-step guide for how to register a small business without getting lost in the admin.

Step 1 — Choose your business structure

Before registering with your state, you need to choose your business structure. Learning how to incorporate a business is different from registering a sole proprietorship, so it’s helpful to know how much you actually need to do.

This structure determines how your business is taxed, how much paperwork you’ll handle, and whether your personal assets are protected. 

Your options include:

• Sole proprietorship: A great option for small, simple businesses that are just getting started. This structure keeps you personally responsible for all debts and liabilities, and everything is reported on your personal income taxes.
• Partnership: Similar to sole proprietorship, this structure keeps business owners personally liable, but splits profits and losses between both owners.
• Corporation: A separate legal entity owned by shareholders where profits are taxed separately from personal income. Limited liability protects owners’ personal assets, which is valuable if your business is on track for serious growth.
• Limited Liability Company (LLC): If you want to set up a company with limited liability protection without working with a whole new tax structure, LLCs give you that flexibility. This is a common choice for many small business owners—you get your protection, but still report profits and losses on your personal returns. 

Step 2 — Register your business name

Before you get too attached to a business name, make sure that no other businesses are already using it. Do a quick Google search and also check that it’s available through your state’s business name database.

“Business name” can refer to a few different things:

• Entity name is the legal name of your business as registered with the state when you form an LLC or corporation. It’s the name used on official documents, tax filings, and contracts.
• Trademark protects your business name or brand identity, often at the national level. It helps prevent other businesses in your industry from using a similar name.
• “Doing Business As” (DBA) name is the name your business uses publicly when it’s different from the legal entity name. This is common for branding or operating multiple brands under one entity.
• Domain name is your website address and online identity. It supports visibility and branding, but owning a domain alone doesn’t give you legal rights to a business name

If you’re wondering how to register a business name for free with your state, the answer is that you really can’t. Official entity names usually involve filing a fee with the Secretary of State that can be in the tens to hundreds of dollars, depending on the state and business structure.

Step 3 — Register with your state

To set up a company like an LLC or corporation, you need to file formation documents with the state, usually through the Secretary of State’s office. 

Requirements vary, but most filings include:

• Paying a fee
• Providing business address and registered agent information
• Filing articles of organization (LLC) or incorporation (corporations)
• Waiting for confirmation once the state approves your filing

For sole proprietors, you only need to register with the state if you’re using a Doing Business As (DBA) name.

Step 4 — Register your business with the IRS

To register business with the IRS, you need to apply for an Employer Identification Number (EIN). Even if you don’t plan to hire employees right away, this number is necessary for filing taxes, opening a bank account, and running payroll.

For sole proprietors with no employees, it’s sometimes possible to register using only your Social Security Number.

Step 5 — Apply for licenses and permits

Depending on your industry and location, your business may need additional licenses or permits to operate legally. If you’re planning on opening up a physical space, zoning and health permits are something else to keep in mind. Check in with your local city or county clerk for any specifics you might have missed along the way.

How to register a business online

You can handle most parts of business registration online through your Secretary of State’s portal. There, you can file formation documents, register a business name, and pay necessary fees. The IRS also allows you to apply for an EIN online.

How to register a business on Google

Registering your business on Google is different from legal registration, but it is important for helping customers find you online.

All you need to do is:

• Create or sign in to a Google account
• Claim your business through Google Business Profile
• Verify your business and add accurate details

Make sure your account and Business Profile all have the same name. This keeps your branding consistent, and makes it easier for customers to trust they’re in the right place.

Registering different types of businesses

Different businesses come with different registration considerations. While the core steps are similar, the details can vary based on how and where you operate.

For example:

• Ecommerce businesses may need sales tax registration in multiple states.
• LLCs and corporations require formal state filings, including articles of organization or incorporation. Ongoing compliance measures also factor into these buildings.
• Local brick-and-mortar businesses often need city or county permits included with state and federal requirements. This is less important if you register online businesses.

How to register a small business

The process of registering a small business looks a little different depending on the model you’re working with. How and where you’re planning to operate, as well as the scope of your business, will impact some of the steps you take.

Here are some things to keep in mind for common small business setups:

Solo founders

Solo founders often begin as sole proprietors or single-member LLCs to keep costs low and paperwork manageable. When you’re kicking off a single-person operation, there’s no reason to add unnecessary complexity.

Solo founders:

• Sometimes wait to form a legal entity until they’ve given their business a test drive. 
• Often don’t need an EIN unless hiring or opening certain bank accounts
• Only need a DBA filing for business name registration

Local service businesses

Local service businesses like hair salons typically have more location-based requirements. Cities and counties often want visibility into who’s operating within their jurisdiction. Even for small operations, it’s best to complete state registration early.

Local service businesses usually require local licenses or permits, and might also require zoning or home-occupation approval.

Online and ecommerce businesses

Online businesses can look simple on the surface, but they often involve additional tax considerations. Often, online business owners will get EINs early in the process for the sake of using payment processors and other platforms.

Compared to local service or brick-and-mortar businesses, ecommerce registration:

• Focuses heavily on small business tax compliance
• May require multistate sales tax registration
• Can often skip physical location permits

Business registration costs: what to expect

Registering a business usually involves a mix of one-time fees and ongoing costs. The exact total depends on your state, structure, and location.

As you prepare to register a business, keep in mind:

• One-time costs like filing fees for LLC applications and corporations typically range from about $40 to $500, depending on the state where you register. 
• Business license costs vary widely by city and county. For example, Alabama requires local business licenses and an annual business privilege tax.
• Ongoing costs may like LLC annual fees can range from $15-$800+ per year depending on the state. Name registrations for DBAs can cost $10-$100, and may require renewals every few years.
• “Free” registration usually refers to no-cost items like getting an EIN from the IRS. However, registering a business with the state always has a fee association.

What to do after you register your business

Once your business is officially registered, there are a few practical admin tasks that set you up for operational success early:

• Open a business bank account to officially separate your personal and business finances. You can do this by bringing your formation documents and EIN to a bank.
• Organize your accounting with the help of software or a professional so your income and expenses are tracked from day one. You’ll be happy you did come tax season.
• Hire your employees only after registering with the appropriate state agencies and confirming your employer requirements. If you’re waiting for confirmation but want to get ahead, you can draft some job descriptions.
• Handle payroll and compliance by setting up payroll software that automatically handles deductions, compliance, and reporting. No need for spreadsheet headaches.
• Get business insurance to protect against common risks like liability, property damage, or employee-related claims. Coverage requirements vary by industry and location.

FAQs about registering a business

What is the best way to register a small business?

The best way to register a small business is to determine your business structure and then follow your state’s requirements for legal recognition. Once that is completed, you can sort out federal tax requirements and then handle local licenses and permits.

Is registering a business the same as an LLC?

Registering a business is not the same as forming an LLC, although the two are often connected. Registering a business is a broad term for getting legal recognition when you set up a company, whereas an LLC is a specific type of legal entity created through a state filing.

How much does it cost to register a business?

The cost of registering a business depends on your state, structure, and location. For example, formation fees for LLCs and corporations can fall between $50 and $500, but local licenses may add additional costs. However, some steps, like getting an EIN from the IRS, are free.

Do I need to register my business with the IRS?

Yes, you need to register your business with the IRS if your business requires an EIN. This typically applies to LLCs, corporations, and businesses with employees. Sole proprietors without employees may use a Social Security number instead.

How to register a business in Texas

To register a business in Texas, first you determine a business structure, choose and register a business name, and file formation documents with the Texas Secretary of State. Texas doesn’t have a general state business license to apply for, but you may still need local permits and must account for the Texas franchise tax, which applies to many entities.

If you’re creating an LLC or corporation, you will also need to file a certificate of formation.

How to register a business in California

To register a business in California, start by choosing a business structure, selecting and registering a business name, and filing formation documents with the California Secretary of State. You’ll also need to check for local licenses and any required professional licenses, such as those for barbers or cosmetologists.

In California, LLCs and corporations have more requirements than sole proprietorships. This includes filing articles of organization or articles of incorporation, and submitting an initial Statement of Information within 90 days of approval.

Once you’ve registered, keep in mind that California is known for higher fees and ongoing compliance costs, including an annual franchise tax for LLCs and corporations.

Taking the first steps for launching your small business

Figuring out how to register a business might feel like a lot of red tape, but it’s a huge marker of progress. When you get that early paperwork in order, you’re giving your small business the structure and credibility it needs to finally start operating.

Looking to get ahead on making your vision a reality? Homebase has the tools to help you hire, schedule, manage timesheets, and automatically run payroll from our all-in-one app. Get your EIN sorted, and we’ll take care of the rest.

Let’s build you solid systems from the start. Drop us a line to learn more.

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