Company registration is the process of legally forming a new business entity in accordance with regulations in your state. It includes obtaining a business registration certificate and filing important documents like an operating agreement. While there are some initial costs, many registration services offer tools that pay for themselves within the first year of operations. These include a free name check, tax planning, and registered agent service. Choosing a Company Name A new business must choose a name that will identify the company in the marketplace. The legal name of a company, which is used for all legal transactions and implemented in marketing campaigns, must be unique. A business may also choose to use a trade name, which can differ from the entity’s legal name and which is usually dropped when referring to the company. This option can save time and money when creating a website or social media profile. It’s a good idea to come up with several potential names before investing in setting up the business entity and creating signage and other promotional materials. This step can help avoid confusion with another business, which could result in costly litigation in the future. Also, entity name registration only protects the company’s legal name within the state of registration; trademark protection must be secured separately. Choosing a Business Structure When starting a new business, the idea of designing a website or talking your way into that first big order stirs entrepreneurial passions. The decision regarding the structure of your company may not be as exciting, but it is essential for legal and tax considerations. The structure you choose will influence how the IRS taxes your business profits, your liability for the business and the transferability of ownership interests. Choosing the right structure is not an easy task, and it is often worth the cost to consult with a lawyer and a tax expert to ensure you are selecting the best legal and financial option for your long-term goals. Other important factors to consider are the following: Filing Articles of Organization The articles of organization are the official legal document that establishes your company at the state level. Depending on your state, these can include information such as the name and address of the company, the purpose of the business, and the names and addresses of the owners. The state office may require additional documentation, such as an operating agreement. This agreement outlines ownership percentages and a management structure, and it is often helpful to have this document ready before filing the articles of organization. Some states also require that you designate whether the company will be member managed or manager managed. You can file the articles of organization online, by mail or in person. The process can take a few business days to a few weeks. Choosing a Registered Agent As part of the business registration process, New York requires that businesses appoint a registered agent with a physical address in the state. This may seem like a minor step, but it’s a critical business compliance requirement that could lead to severe penalties (including suspension of your company’s right to operate) if not fulfilled. Choosing an outside third party to serve as your registered agent offers many advantages over using an employee or business owner as the agent. For example, if your business is sued, having your personal home address on file could jeopardize your privacy and make you personally responsible for the lawsuit. Also, if your business operates in multiple states or is planning to expand, an agent that provides services nationally can offer consistency and simplify compliance with state rules. Obtaining Tax Identification Numbers A company’s tax identification number, or EIN, is its unique nine-digit number that unambiguously identifies the entity for tax and financial purposes. The EIN is the equivalent of a Social Security number for businesses. Companies can get an EIN online by filling out a one-page form with the IRS. The IRS typically issues an EIN within an hour after receiving an application, provided that the responsible party is a corporation or partnership and the legal business name has been approved for use in the state where the company is registered. The IRS also offers a telephone EIN application line. However, it is generally faster to apply online and the IRS recommends that you do so. You may also find the EIN of a company by looking at its Securities and Exchange Commission filings.
What Is Company Registration?
