Whether or not you need to register your business will depend on your location and structure. However, registering will give your company credibility and establish it as a legitimate contender in the marketplace.
Depending on your industry and state regulations, registration may grant you access to several benefits and perks, such as supplier discounts.
Establishes a Legal Business Bank Account
Business registrations can help you establish a legal business bank account, which is essential for accepting customer payments and paying vendors. It also lets you keep your personal and business finances separate, which is beneficial for tax purposes.
Many banks will require you to provide proof that your business is registered before opening an account. This could include articles of organization, an EIN verification letter, or other documentation, depending on your state and business structure. A business bank account can also make your company look more professional to potential clients and customers.
Establishes Your Business as a Legal Entity
The business name registration process and requirements vary by location. However, most states require some registration for a new company. This includes articles of incorporation and forms and, in some cases, obtaining state, county, or city licenses and permits.
Once registered, your company becomes legally recognized as an independent business entity. This may be important when applying for a business bank account or requesting loans. It also helps protect personal assets from lawsuits. You should consult a qualified lawyer to ensure you comply with all local and state laws.
Establishes a Legal Business Address
Business registration legitimizes your business and ensures compliance with various laws and regulations. It also opens doors for future expansion, provides tax benefits and incentives, and enhances your credibility.
Depending on your chosen business structure, several business registrations exist. Consult a qualified lawyer or registered agent to determine the best option for your business. New York’s official business name reservation page is an excellent place to start. It can help you avoid potential infringement and copyright issues.
Establishes a Legal Business Name
Anyone can decide to start operating as a business one day, but it takes more to make a company legitimate. Registering your company gives potential customers confidence and establishes you as a legal entity.
If you already have a legal name in mind for your business, register it as soon as possible. This will prevent others from registering the same name before you do and protect your intellectual property. Also, writing a legal representation may be required to open a business bank account or obtain a loan.
Establishes a Legal Business Tax Identification Number
A federal tax identification number, commonly known as an EIN or employer ID number, is necessary for nearly all businesses. This nine-digit number is unique to your company and must be included on all official IRS documents.
The responsible party must gather information to obtain an EIN, including the entity’s legal name, mailing address, its formation, and the reason for getting one (such as hiring employees or opening bank accounts). The IRS typically provides the number over the phone once it verifies that the requester is authorized to receive it.
Establishes a Legal Business Credit History
Most businesses of any size, other than a small one-person sole proprietorship, need to register for business. This may include writing for an EIN to avoid double taxation (simultaneously filing personal and business taxes).
Registering your business will also provide a Dun & Bradstreet DUNS number that lenders can reference when evaluating credit applications. This is especially important if you are seeking a loan for your business. It adds credibility and makes you look like a legitimate business to lenders.
Establishes a Legal Business Tax Exempt Status
Registering your business at the state level establishes your business as a legal entity. It also shows a tax ID number, which protects your personal Social Security Number and allows you to build business credit.
Updating your business registration as necessary is essential to ensure compliance with changing laws and regulations. A professional business registration service can help you stay in compliance and avoid legal disputes or penalties.
Establishes a Legal Business Trademark
A business must register its trademark in some states to use it legally. Registering a trademark establishes it as a legal entity that can own assets, sue or be sued in its name, and build a credit history.
Federal registration provides additional protections and allows the owner to add the (r) symbol next to the mark to inform competitors that the trademark is registered. It also shows that the business is committed to compliance and professionalism.
