Starting a Business: How to Register

You’ve decided to take the leap and start your own business - congratulations! Now, there are some things you’ll want to consider when it comes to legally registering your business.

Selecting A Business Structure

How you choose to operate your business dictates your personal liability and your tax bill.

Sole Proprietorship: This is the simplest business structure to establish. However, it offers no legal separation between you and the business, meaning your personal assets are at risk if the business is sued. To operate under a name other than your legal name, you can file a DBA (“Doing Business As”). Filing a DBA adds credibility and professionalism, and allows you to open a bank account under this business name so customer payments can go directly to the business rather than to you personally.
LLC (Limited Liability Company): Designed to provide the liability protection of a corporation with the tax simplicity of a partnership, this tends to be the "sweet spot" for many small businesses.
Corporation: As a completely independent legal entity, this option offers the strongest separation from its owners, but requires much more complex record-keeping and tax preparations. It is important to note that there are a few types of corporations—C corporations (C corp) and S corporations (S corp) tend to be the most commonly known. One of the biggest differentiators is how your corporation gets taxed.
- A C corp may be subject to double taxation on the corporate level (taxed on the company’s profits, as well as on their personal tax returns for any shareholder dividends paid out). If you plan to raise venture capital or go public down the line, you’ll want to consider registering as a C Corp.
- While businesses must meet certain criteria to elect S Corp status with the IRS, this option allows an LLC or C Corp's profits to get taxed directly through the business owner’s personal income, avoiding double taxation.

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Is the Business Structure I Select Set in Stone?

It’s not uncommon for a business to begin as a Sole Proprietorship, grow into an LLC, and eventually convert to a C-Corp to prepare for an IPO or major investment. This can be done fairly simply by incorporating a new entity with the State and transferring all business assets (bank accounts, equipment, contracts) from your name to the new company's name—though you will usually need to get a new EIN from the IRS. Alternatively, many states offer a streamlined process called a Statutory Conversion. Instead of closing one business and opening another, you file a "Certificate of Conversion", allowing you to maintain your existing business assets.

Where to Register

Registration usually happens at three levels: Federal, State, and Local. While this is a process you can do on your own, there are services that help streamline it for you. Learn more about our Business Registration partnership.

Step 1: Federal Registration (The IRS)

If you form an LLC, a Corporation, or hire employees, you will need an EIN (Employer Identification Number). Think of this as a Social Security Number for your business. Sole proprietors can use their SSN, but an EIN is highly recommended for privacy.

Where: IRS.gov
Cost: Free. (Beware of third-party sites that try to charge you for this).

Step 2: State Registration (Secretary of State)

State registration is mandatory for LLCs and Corporations. During registration, you must appoint a Registered Agent—a designated person or service that is legally authorized to accept official mail for your business.

Where: Your state’s Secretary of State website (e.g., "California Secretary of State" or "NY Division of Corporations").
What you'll file: "Articles of Organization" (for LLCs) or "Articles of Incorporation" (for Corps).
Cost: Varies by state (typically $50–$300).

Step 3: Local Licenses and Permits

Your city or county may require a general business license or specific permits (especially for food, home-based businesses, or professional services).

Where: Your local City Hall or County Clerk’s office.

Pro Tip: Before you register anything, search the U.S. Patent and Trademark Office (USPTO) database to make sure your business name isn't already trademarked. It’s much cheaper to change your name now than after a "Cease and Desist" letter arrives.

Simplifying the Process

We've partnered with MyCorporation, to help you jump start your business. They offer a variety of services such as searching for name availability, filing Articles of Incorporation, helping register a DBA, obtaining an EIN Tax ID and more.

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_{1 This content is provided for informational purposes and does not constitute professional advice.}

_{2 ConnectOne Bank is not affiliated with MyCorporation.}

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