Starting a business in 2021 will be different than starting a business in 2018. With the rise of Artificial Intelligence and automation, you’ll need to change your approach to branding, marketing, customer service, and more. There are also some essential steps that you need to take during the registration process. These days, businesses have to register with many different authorities, and it can be unclear for people who don’t know what they’re doing.
This article will guide you through registering your business in 2021 to succeed from the get-go.
Is Business Registration Important?
Business registration is essential because it gives you credibility, legitimacy and makes your business official. Registering with the government shows that you are serious about running your own company and complying with the law. It is essential to recognize that there are different types of business registration. You can register as a sole trader or a limited company; both have benefits and drawbacks.
Steps To Register Your Business
1. Name Your Business
The first thing that you need to do is come up with a name for your business. You can’t go wrong in choosing something unique or catchy, but make sure it’s easy to remember, so customers are more likely to return if they have had an enjoyable experience with your company. Once you’ve decided on the perfect name, submit it to the Secretary of State website and pay the fee online as well. It will be ready for use when all of your legal documentation has been completed.
2. Registering a Business Name
The first thing you need to do when registering your business is to come up with a name. The best way to figure out what you want to call it is by brainstorming different options and seeing how they sound together. Once you think of the perfect title for your business, make sure there aren’t any other businesses in existence that may have similar names or titles before filing registration papers for your company.
Also, make sure your business name is unique and that it distinguishes you from other companies.
3. Future-Proofing Your Business Name
The first thing you want to do is start brainstorming a list of names. There are many different types of companies that can be formed, and some businesses will require more thought than others when it comes to naming your company. It’s important to remember that whatever name you choose for your business needs to meet specific criteria and solve the problem at hand.
4. Picking Your Business Entity
After you’ve chosen the name of your e-commerce site, you’ll have to decide on the sort of business organization that best suits your online store. There are two significant options: forming an LLC or incorporating your company. Because there are significant variations between these two solutions, we’ve outlined the most important factors to consider so you can make the proper selection for your e-commerce store.
As an LLC, you’ll have little paperwork to deal with than if you had been to incorporate, which implies you’ll have much more time to concentrate on getting your store up and running.
You will not be personally responsible for any debts your firm incurs if you establish your firm as an LLC. This implies that if something happens to your firm, your personal assets will be entirely secure, such as your money, vehicle, and home.
A corporation is a separate legal entity that has its rights, privileges, and liabilities. A corporation can exist as long as it meets state requirements for doing business—such as filing annual reports or paying franchise taxes. Therefore, you do not need to dissolve your company when the owner changes if the new owners want to maintain the corporation’s ownership.
A corporation can be taxed differently from an individual, so it is often advantageous to choose this type of business structure when starting a new company. If your LLC has only one member (owner), the IRS automatically taxes you as a sole proprietorship unless you file paperwork to elect yourself as an S Corporation instead.
Choosing the State, You’ll Register In
Take some time to think about where you’ll register your e-commerce company. The tax rates differ from one state to the next. You are not, however, obligated to register in the state where your small business is located.
It makes perfect sense to open a new business in a state with low, or even no, sales tax rates since it will spare you money over the long term.
Obtain Your Business’ Federal Tax Number
You must also register your company with the federal government. To do so, you’ll need to apply for a national tax ID for your e-commerce company. Your federal income tax number, commonly known as an employer identification (EIN), is your company’s version of a security number.
Open a Business Bank Account
If you are the only person involved in your business, opening a business bank account is pretty straightforward. You can create an account with any bank or credit union that provides small-business services.
The Bottom Line
You can’t afford to take a risk on an unregistered business. If the government gets involved and your business is not legally registered, it could get shut down or worse. It’s also essential for you as a small-business owner to track all of your expenses to report them at tax time each year accurately.