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
- Limited Liability Companies (LLCs)
- Non-Profit Organizations (NPOs)
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.
About the author
Brett 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.