Steps to Opening A Business

open-a-businessFor about a third of Americans, the idea of starting their own company is more frightening than skydiving — even as they dream of quitting their jobs and pursuing their passions. At least that’s according to a surveys exploring the many factors that keep people from pursuing their entrepreneurial dreams.

Web-hosting service Weebly sponsored a survey of 1,001 U.S. adults chosen to be a representative sample; Wakefield Research conducted the interviews March 26 to April 1 via e-mail invitation and an online form. The margin of error was ±3.1 percentage points.

By understanding what potential entrepreneurs perceive as obstacles, you could find it easier to pursue your own dreams of owning a small business.

“Americans think about quitting their jobs twice a week,” said David Rusenko, Weebly’s 28-year-old chief executive and co-founder. “A lot of people have business ideas. … They don’t recognize that many of the barriers are no longer there.”

Starting a business involves planning, making key financial decisions and completing a series of legal activities. These 10 easy steps can help you plan, prepare and manage your business. Click on the links to learn more.

Follow These Steps Provided by the SBA to Starting a Business

Step 1: Templates for Writing a Business Plan

Use these tools and resources to create a business plan. This written guide will help you map out how you will start and run your business successfully.

Step 2: Get Business Assistance and Training

Take advantage of free training and counseling services, from preparing a business plan and securing financing, to expanding or relocating a business.

Step 3: Choose a Business Location

Get advice on how to select a customer-friendly location and comply with zoning laws.

Step 4: Finance Your Business

Find government backed loans, venture capital and research grants to help you get started.

Step 5: Determine the Legal Structure of Your Business

Decide which form of ownership is best for you: sole proprietorship, partnership, Limited Liability Company (LLC), corporation, S corporation, nonprofit or cooperative.

Step 6: Register a Business Name (“Doing Business As”)

Register your business name with your state government.

Step 7: Get a Tax Identification Number

Learn which tax identification number you’ll need to obtain from the IRS and your state revenue agency.

Step 8: Register for State and Local Taxes

Register with your state to obtain a tax identification number, workers’ compensation, unemployment and disability insurance.

Step 9: Obtain Business Licenses and Permits

Get a list of federal, state and local licenses and permits required for your business.

Step 10: Understand Employer Responsibilities

Learn the legal steps you need to take to hire employees.

5 Steps to Registering Your Business

Whether you are starting a new business or expanding an existing business, you will need to follow some basic steps to ensure you have all the necessary licenses, permits and registrations needed to legally operate.

1. Determine the Legal Structure of Your Business

You must organize your business as a legal entity. There are several options to consider, and all have different legal, financial and tax considerations. The right legal structure for your business depends on a number of factors, including the level of control you want to have, your business’ vulnerability to lawsuits and financing needs.

The legal structure you choose will determine further registration requirements. Once you choose a legal structure, you may have to file registration forms with your state and/or local government. The requirements vary from state to state.

Visit the Incorporating Your Business page to learn about choosing a legal structure and where you’ll need to go to file the appropriate paperwork.

2. Register Your Business Name

“Doing Business As,” “DBA,” “Assumed Name,” and “Fictitious Name” are terms that are used to describe the process of registering a legal name for your business.

By default, the legal name of a business is the name of the person or entity that owns a business. If you are the sole owner of your business, its legal name is your full name. If your business is a partnership, the legal name is the name given in your partnership agreement or the last names of the partners. For limited liability corporations (LLCs) and corporations, the business’ legal name is the one that was registered with the state government.

Your business’ legal name is required on all government forms and applications, including your application for employer tax identifications, licenses and permits. However, if you want to open a shop or sell your products under a different name, then you may have to file an “assumed name” registration form with your state and local government.

Visit the Registering Your Doing Business As Name guide to learn about the requirements in your state.

3. Obtain Your Federal Tax ID

Employers with employees, business partnerships and corporations, and other types of organizations, must obtain an Employer Identification Number (EIN) from the U.S. Internal Revenue Service. The EIN is also known as an Employer Tax ID and Form SS-4:

U.S. Internal Revenue Service
Phone: 1-800-829-4933

4. Register with Your State Revenue Agency

Just as you must have a Federal Tax ID, you will also need to obtain Tax IDs and permits from your state’s revenue agency.

If you plan to sell products and you are required to collect sales taxes, you will likely need to obtain a Sales Tax Permit or Vendor’s License from your state or local government (or both).

The State and Local Tax page is a starting point for learning about your state and local tax registration requirements. If you are looking for a specific state or local tax permit or license, use our search engine to find specific state and local tax forms and requirements.

5. Obtain Licenses and Permits

Most businesses are required to obtain some type of business license or permit to legally operate. The vast majority of small businesses will need to obtain a general business license or industry-specific operating permits from state and local government agencies.

Visit the Obtaining Business Licenses and Permits guide to find tools and information to help you obtain all the licenses, permits and registrations you’ll need to get started or expand your business.

Register Your Fictitious or “Doing Business As” (DBA) Name

The legal name of a business is the name of the person or entity that owns a business. For example:

  • If you are the sole owner of your business, its legal name is your full name
  • If your business is a partnership, the legal name is the name given in your partnership agreement or the last names of the partners
  • For limited liability corporations (LLCs) and corporations, the business’ legal name is the one that was registered with the state government

The legal name of your business is required on all government forms and applications, including your application for employer tax IDs, licenses and permits. However, if you want to open shop or sell your products under a different name, then you may have to file a “fictitious name” registration form with your government agency.

A fictitious name (or assumed name, trade name or DBA name, which is short for “doing business as”) is a business name that is different from your personal name, the names of your partners or the officially registered name of your LLC or corporation.

For example, let’s say Mary Smith is the sole proprietor of a catering company she runs out of her home. Mary wants to name her business Seaside Catering instead of using her business’ legal name, which is Mary Smith. In order to use Seaside Catering, Mary will need to register that name as a fictitious business name with a government agency. The appropriate government agency depends on where she lives. In some states, you have to register fictitious names with the state government or with the county clerk’s office; however, there are a few states that do not require the registering of fictitious business names.

Use the following chart to find out the requirements for fictitious name filing in your state and to access more information on the process.

State

DBA Filing Requirements

Alabama Alabama does not require businesses to register a fictitious name. Businesses may elect to register a trade name with the Secretary of State.
Alaska Register a Business Name in Alaska
Arizona The registration of trade names is not required in Arizona but is an accepted business practice that can help you avoid another business from using your business name. Trade names are registered with the Secretary of State.Application for Trade Name Registration
Trade Name Registration Information
Arkansas Any sole proprietorship or general partnership operating under a name other than the owners must file a Doing Business Under an Assumed Name Certificate.Domestic and foreign corporations must file an Application for Fictitious Name with the Secretary of State. Domestic corporations must also register with the county clerk of the county in which the corporation’s registered office is located (unless it is located in Pulaski County). Fees vary depending on the entity.
California Individuals or entities doing business for profit under a name different from the owner(s) full legal name(s) must file a Fictitious Name Statement with the registrar-recorder/county clerk office in the county where the business resides.
Colorado Register a Trade Name Online
Connecticut Any person doing business in Connecticut under any name other than their own, must either register a trade name in the town where their business is conducted or register with the Connecticut Secretary of State as a corporation.
Delaware For sole proprietorships and general partnerships, Fictitious Name Certificates are registered in the Superior Court Prothonotary’s office in the county where you are doing business.New Castle County Fictitious Name Certificate
Kent County – call for form (302) 739-3184
Sussex County – call for form (302) 856-5742
District of Columbia Individuals, corporations or partnerships may register a business name (trade name) different from the entity’s true name. However, you do not need to register the name used for your corporation, partnership, or LLC as your trade name, since it is considered your true name.
Florida All Florida businesses operating under a fictitious name must register with the Division Corporations, Online Fictitious Name Registration.
Georgia Individuals or entities doing business under a name different from the owner(s) full legal name(s) must complete a Trade Name Filing with the Clerk of Superior Court in the county where the business is principally located.If you incorporate your business with the Secretary of State, registering a corporate name does not control the use of fictitious or trade names, and issuance of a corporate name does not affect the commercial availability of the name.
Guam Rules for the Use of Fictitious Names in Guam
Certificate of Transacting Business Under a Fictitious Name
Hawaii Application for Registration of Trade Name
Trade Name Registration Information
Idaho Assumed Business Name Registration Forms
Illinois When a business name is different from the owner(s) full legal name(s), the Illinois Assumed Name Act requires sole proprietorships and general partnerships to register with their local county clerk’s office. Corporations, LLCs, LLPs, and limited partnerships register an assumed name as part of their required business filings with the Illinois Secretary of State.
Indiana If a business is using a name other than its official name, it must file a Certificate of Assumed Business Name with the county recorder of each county in which it has a place of business, and with the Secretary of State. Sole proprietorships and general partnerships need only file with the County Recorder’s office.
Iowa Sole proprietorships and general partnerships doing business under an assumed name must file a Trade Name Report with the local county recorder’s office. This rule does not apply to corporations, LLCs, LLPs, and limited partnerships registered with the Iowa Secretary of State.
Kansas The State of Kansas does not require a business to register an assumed business name.
Kentucky Corporations, nonprofits, LLCs and partnerships (general, limited, and limited liability) must file a Certificate of Assumed Name with the Kentucky Secretary of State.Sole proprietorships should file an assumed name certificate with the county clerk’s office where the business is located.
Louisiana Sole proprietorships and general partnerships operating under an assumed name must register with the Parish Clerk of Court office where the business is located.You may download the Application to Register a Trade Name, get it notarized, and submit it to your Parish Clerk of Court office.Corporations, nonprofits, LLCs, LLPs, and limited partnerships must submit the application to the Louisiana Secretary of State.
Maine Sole proprietorships and general partnerships doing business under an assumed name are required to file a certificate with the municipal or town clerk where the business is located.Corporations, LLCs, LLPs, and limited partnerships register a Statement of Intention to do Business under an Assumed or Fictitious Name with the Maine Secretary of State.
Maryland Addresses and phone numbers for help applying for a trade name in Maryland can be found on the Trade Name Registration Info page.Trade Name Application
Massachusetts Massachusetts requires anyone who is conducting business under an alias (i.e., any name other than their own), including corporations, to file a business certificate (“doing business as”) in the city or town where the business is principally headquartered.
Michigan Sole proprietorships and general partnerships using a business name other than the legal names of the owner(s) must file an Assumed Name Certificate with the county clerk under which the person(s) will do business. Corporations, LLCs, LLPs, and limited partnerships register an assumed name as part of their required business filings with the Department of Licensing and Regulatory Affairs (LARA).
Minnesota Minnesota Secretary of StateAssumed Name Registration
Mississippi The State of Mississippi does not require a business to register an assumed business name.
Missouri Missouri law requires any person or business entity which transacts business in the state under a name other than their own “true name” to register that business name with the Missouri Secretary of State as a Fictitious Name Registration.Online Registration of Fictitious Name
Montana Montana Secretary of StateApplication for Reservation of Name
Application for Registration of Assumed Business Name
Nebraska Nebraska Secretary of StateApplication for Registration of Trade Name
Nevada All persons and entities doing business in the state of Nevada under an assumed or fictitious name that is different from the legal name must file a Fictitious Firm Name Certificate with the county clerk of each county where the business is being conducted.
New Hampshire New Hampshire Secretary of StateTrade Name Registration Forms
New Jersey Sole proprietorships and general partnerships doing business under an assumed name should register with the county clerk office where business will be conducted. Contact information for each county can be found on the New Jersey Division of Elections page.For-profit and nonprofit corporations, limited liability companies and limited partnerships may legally do business under an alternate name by registering with the New Jersey Division of Revenue.
New Mexico The State of New Mexico does not require a business to register an assumed business name.
New York Sole proprietorships using a name other than the owner’s name should file a Business Certificate with the county clerk’s office in the county where the business is located.General partnerships operating a business under an assumed name should file a Business Certificate for Partners with the county clerk’s office in the county where the business is located.Corporations, LLCs, LLPs, and limited partnerships register an assumed name as part of their required business filings with the New York Department of State.
North Carolina Requires forms to be filed at the County Register of Deeds Office in the county in which your business is conducted.Certificate of Assumed Name Forms
North Dakota North Dakota Secretary of StateTrade Name Registration
Ohio Ohio Secretary of StateTrade Name Registration Forms
Oklahoma Oklahoma Secretary of StateTrade Name Registration
Oregon Oregon Secretary of StateAssumed Name Registration
Pennsylvania Pennsylvania Department of StateFictitious Name Registration Requirements
Application for Registration of Fictitious Name
Puerto Rico Businesses in Puerto Rico can register both their trademark and trade name (i.e. fictitious name) through the Department of State’s Registry of Marks and Commercial Names.Registro de marcas y nombres comerciales (registry of marks and commercial names)
Rhode Island Businesses operating under an assumed name may be required to file an assumed name certificate with the city or town clerk where business is located. In addition, all corporations, LLCs, LLPs and limited partnerships conducting business in Rhode Island must register a Fictitious Business Name Statement with the Rhode Island Secretary of State.
South Carolina Businesses operating under an fictitious or assumed name are not are required to register with a government agency.Only foreign businesses may adopt a fictitious name. A fictitious name can be obtained for a foreign (out of state) business that is authorized to transact business in the state if its legal entity name is already registered in South Carolina. Visit the South Carolina Secretary of State for more information.
South Dakota South Dakota Secretary of StateFictitious Business Name Registration
Tennessee Tennessee does not require registration or filing of DBAs or fictitious names for sole proprietorships and general partnerships. Corporations, LLCs, LLPs and limited partnerships register an assumed name as part of their required business filings with the Tennessee Secretary of State.
Texas All businesses in Texas operating under an assumed name must file an Assumed Name Certificate with the county clerk’s office in the county where the business is primarily located.Corporations, LLCs, LLPs and limited partnerships must file an Assumed Name Certificate with the Texas Secretary of State in addition to a separate Assumed Name Certificate with the county where the main office of the registered business is located.
U.S. Virgin Islands Lieutenant Governor of the Virgin IslandsCertificate for Registration of Trade Name
Utah All Utah businesses operating under an assumed name must file a Business Name Registration/DBA Application. Visit these resources for more information.Information for Corporations
Information for Sole Proprietorships and General Partnerships
Vermont Vermont Secretary of StateTrade Name Registration Form
Trade Name Registration Information
Virginia If business is conducted in Virginia under a name other than the legal business name, an assumed or fictitious name certificate must be filed in each county or city where business is to be conducted. In addition, if the entity is a limited partnership, a limited liability company or a corporation, it must obtain a copy of each fictitious name certificate, attested by the Clerk of the Circuit Court where the original was filed, and file it with the Clerk of the State Corporation Commission.Read the Virginia Business Registration Guide for more information on business registration requirements for all types of legal entities.
Washington Washington State Department of LicensingTrade Name Registration
West Virginia West Virginia Secretary of StateTrade Name Registration
Wisconsin State of WisconsinRegistration of Firm Name (aka “Doing Business As”)
Wyoming All businesses may reserve or register a trade name with the Wyoming Department of State.Trade Name Reservation Form