Important Requirements Business Entrepreneurs Must Know Before Starting a Business

Starting a business can be challenging. Here are all the important legal requirements of establishing a business in the US so that you start one smoothly.

Starting a business can be an overwhelming task. You need to plan out your business model, get funding, find a place to set it up, and so much more.

In such a situation, the legal requirements can often seem confusing and difficult to figure out. However, every business owner needs to fulfill these requirements to start and operate a business successfully.

To make your process easier, we’ve put together this list of legal requirements you should complete to establish your business.

Legal Requirements You Should Know

Here are the legal requirements you must know and fulfill.

1. Register the Business Name

When you start a business, you need to name it too. This name needs to be formalized as well. For that reason, you need to register your company name.

A good idea is to come up with a few business names and check if they’re available in your state by checking the Secretary of State’s website.

Along with the registration, you should also consider getting a trademark and a domain name.

2. Finalize Your Legal Entity

Your company has to have a legal entity. Depending on the type of business, industry, business size, and goals, you must decide on a business entity type.

The various legal entities that you can choose from are:

  • Sole proprietorships
  • Partnerships
  • Limited Liability Companies (LLCs)
  • Non-Profit Organizations (NPOs)
  • Corporations

3. Do Your State Filings

After you’ve finalized your legal entity type, you need to do the state filings for it. Each legal entity requires different filings.

Here are the filings you should do for each entity:

  • Sole proprietorships: Federal EIN, and Doing Business As (DBA)
  • Partnerships: Federal EIN and Doing Business As (DBA)
  • Limited Liability Companies (LLCs): Articles of Organization
  • Non-Profit Organizations (NPOs): Check with your state for filing requirements
  • Corporations: Articles of Incorporation

4. Get Your EIN (Employer Identification Number)

It’s compulsory for businesses to apply for a Tax ID (EIN) when starting out. Without it, you won’t be able to do business operations such as hiring employees, opening bank accounts, earning income, and even signing vendor contracts.

So, make sure that you get that done while establishing your business.

5. Create Contracts and Agreements

While starting your company, you must also consider creating different legal agreements and contracts. These can help you avoid difficult situations in the future if they arise.

Some of the contracts you can create are:

  • Operating Agreements
  • Corporate Bylaws
  • Independent Contractor Agreements
  • Confidentiality Agreements
  • Employment Agreements
  • Non-Disclosure Agreements

6. Open a Bank Account for Your Business

Finally, you must open a separate bank account for your business. This will help you keep your personal finances separate from those of your business. This is where legal documents like your EIN, formation documents, ownership agreements, etc. can come in handy.

If you want to learn more about how you can establish a business in the US, check out this detailed infographic created by GovDocFiling.

Govdoc infographic The 6 Legal Requirements of Setting Up a Business infographic 1 Copy min

About the author

Brett Shapiro 1 min e1606754721605Brett Shapiro is a co-owner of GovDocFiling. He had an entrepreneurial spirit since he was young. He started GovDocFiling, a simple resource center that takes care of the mundane, yet critical, formation documentation for any new business entity.

Latest

NFTs (non-fungible tokens) in luxury marketing!

BusinessEditorialApril 14, 2021NFTs (non-fungible tokens) in luxury marketing!

Many luxury fashion houses are interested in NFTs. Big players like Gucci and Nike have already jumped into the game, while smaller luxury brands are even more aggressive.
What can luxury brands learn from Gucci’s digital strategy?

EditorialBusinessApril 12, 2021What can luxury brands learn from Gucci’s digital strategy?

In order to attract Generation Z, Gucci is reinventing itself by actively adopting emerging technologies and digital marketing tools to create digital content, as well as by collaborating with partners to deliver digital products.
Cosmetics industry trends and marketing techniques

BusinessEditorialMarch 29, 2021Cosmetics industry trends and marketing techniques

This industry has enjoyed strong growth in the past years prior to the pandemic. According to Allied Market Research, the global market size was assessed at $380.2 billion in 2019, and it was expected to continue developing at a 5.3% CAGR, reaching $463.5 billion by 2027.
Artificial Intelligence in marketing: History, definition, types and examples

BusinessEditorialMarch 24, 2021Artificial Intelligence in marketing: History, definition, types and examples

Artificial intelligence refers to the simulation of human intelligence in machines, which are designed and programmed to think like humans and mimic their actions, focusing on elements like speech recognition, problem-solving, learning and planning.
How to start a lifestyle blog, promote and monetize? Everything about lifestyle blogging.

EditorialBusinessMarch 3, 2021How to start a lifestyle blog, promote and monetize? Everything about lifestyle blogging.

Lifestyle blogging is a complex process that may prove extremely rewarding, when done right. To help you get the most of your efforts and guide you through this, I have created this go-to guide that offers tips to first-time bloggers.
Why and how to make user-generated content a strong pillar of your luxury marketing strategy?

EditorialBusinessMarch 1, 2021Why and how to make user-generated content a strong pillar of your luxury marketing strategy?

User-generated content (UGC), also known as user-created content (UCC), is any form of content that is posted by netizens on digital platforms, such as social media and collective databases and websites.