How To Register a Business in 6 Simple Steps (2024)

Under certain circumstances, it’s possible to conduct business as a sole proprietor without registering your business. However, choosing to incorporate and register your business inspires more confidence in your customers and offers protections that a sole proprietorship doesn’t.

If you’re still in the planning stage with your business checkout our how to start a business guide to help you get off the ground.

If you’re ready to go, read on to learn how to register a business with state and local agencies.

How to register your business

Whether you’re registering your business as a sole proprietorship or a different business structure, registering your new business is a fairly straightforward process. Nevertheless, it’s important to register your business properly in order to avoid complications down the road.

1. Pick your business name

It probably goes without saying that your online store needs a name, and choosing a legal name for your business that’s both available and on brand can be challenging. When brainstorming your business name, it’s best to cast a wide net at first, then hone in on your top ideas. (Need some help coming up with ideas? Consult Shopify’s business name generator).

Once you’ve nailed down a few favorites, you’ll need to check if they’re available. Conduct a search in your local jurisdiction’s business database to see if any other businesses have registered under a similar name.

Other important considerations when choosing your business name include:

Social media. Are relevant social media handles available, or is someone else already using your chosen name?
Domain name. Conduct a quick domain name search to see if your branded URL is available.

2. Choose a business structure to register

A woman at a computer registering a business — Photo courtesy of: Unsplash

Before you can register your business, you need to choosing your business structure and incorporate as such. Popular business structures include limited liability company (LLC), corporation (including C corp and S corp), general partnership, and limited liability partnership (LLP).

For more on the most common business structures, read our guide, The 4 Most Popular Types of Businesses and How To Choose One.

Each business structure requires a different process for registration. Sole proprietors, for example, don’t need to do anything. Corporations, on the other hand, need to file articles of incorporation or similar corporate documents. Opting for an LLC? See our state specific guides for California LLC, Texas LLC, and Florida LLC.

3. Register for an employer identification number (EIN)

Regardless of business structure, an employer identification number (also known as a tax ID number) is critical. It protects your Social Security number (SSN) and establishes your business as a separate legal entity. This means your business can build credit and hire employees.

You can apply for an EIN on the IRS website.

4. Check requirements for each business location

A city hall in America showing where to register a business — Photo courtesy of: Unsplash

Just as each business structure has its own registration process and requirements, each location has its own parameters as well. It’s important to check with federal, state, and local government agencies to find out what you need to legally register your business.

Additional steps may include permitting requirements, licenses, articles of incorporation, forms, and fees, among other things.

5. Register for taxes

hands counting coins to represent registering for taxes — Photo courtesy of: Unsplash

In most places, businesses have to pay sales tax and potentially other applicable taxes or fees. Because sales tax varies by state, you’ll need to register in each state where you plan to sell.

Some states don’t collect sales tax, which means store owners do not have to register a business for tax purposes. These states include:

Alaska
Delaware
Montana
New Hampshire
Oregon

For the remaining states, check with them directly to find out what the process entails.

Get started: Shopify uses default tax settings for your online store, but you can customize your sales tax settings in your admin dashboard.

Learn more: Basics of Small Business Accounting: 12 Steps to Get Your Company on Track

Take the stress out of sales tax with Shopify Tax

With Shopify Tax, you can oversee your current sales tax obligations from Shopify admin, collect the right amount at checkout with product and location-specific accuracy, and let Shopify automatically apply rate and regulatory changes whenever they happen.

Explore Shopify Tax

6. File for any trademarks

A hand holding a button with a heart representing a business trademark to be registered — Photo courtesy of: Unsplash

If you’re launching a brand or product with a unique name, logo, feature, or slogan, you may qualify for trademark protection. A trademark is “anything that’s considered a source identifier,” helping consumers recognize your brand or products.

While you can establish a trademark “unofficially” by doing business and establishing a reputation, the safer approach is to register with the corresponding trademark office, either on your own or with the help of a trademark attorney. This ensures that your trademark is protected from any other businesses that might seek to use your idea for their own benefit. At minimum, be sure to trademark your business name with both the state and federal government.

Tips for registering your business

As you proceed through the process to register a business, here a few things to keep in mind.

Get organized

Before you start filling out any application, create a list of what you need. This will include things like your basic personal and business information, EIN, forms, licenses, permits, fees, etc. Have this information handy so you can fly through the application process.

Hire help

For more complex business registration (e.g., for heavily regulated industries), you may want to enlist the help of an expert. Qualified tax professionals and business attorneys can guide you through the process, answering questions along the way and even taking care of some of the steps for you. Shopify Partners offers a directory of tax professionals who can provide assistance with US state sales tax and liability.

Stay up to date

It’s always best to check directly with official location- and industry-specific sources for the latest information regarding business registration requirements. Make it a habit to check on your licenses, permits, and registrations each year—for accountability and to help you remember, you might do it at tax time. Set up calendar reminders for any expirations or renewals as well.

Kickstart your business with Shopify

Now that you know how to register a business, you can begin thinking about how to run it. Shopify offers tools and integrations that make it easy to manage every aspect of your business. With thousands of third-party apps and integrations to choose from, you can build a virtual business command center.

DISCLAIMER: These guides are for informational purposes only and do not constitute professional legal or tax advice. Please consult independent legal advice and your own tax adviser for information specific to your country and circumstances. Shopify is not liable to you in any way for your use or reliance on these guides.

How to register a business FAQ

Can you run a business without registering it?

If you operate as a sole proprietorship, you can run a business without registering it. There is no formal process required before you make your first sale. Over time and as your business grows, you’ll want to register and incorporate.

Is it important to register a small business?

While it isn’t always necessary to register a small business, registration helps consumers identify your store as a legitimate operation, and may be required for financial tasks such as loan qualification.

Do I need to register my small business with the IRS?

While you likely don’t need to register your business federally to form a legal entity, registering with the IRS will give you a federal tax ID, which protects your personal identity and can help you establish business credit and bank accounts.

How much does it cost to register a business?

The cost to register your business, which typically involves filing fees, differs from state to state. Your cost may also be higher or lower depending on which business structure you’re adopting.

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