DISCLAIMER: This article is for informational purposes only, and doesn't constitute professional legal communication. We are non liable to you in any mode for your use or reliance on this article.

It'due south essential that ecommerce entrepreneurs know how to annals a business, particularly at the start of their entrepreneurial journey.

One time your online store has been registered every bit a legal entity, yous'll be protected if any of your customers, or competitors, determine to file legal activeness against you.

If y'all're new to the concept of registering a business, the idea can be quite daunting. We've created this commodity to walk y'all through all the necessary steps which you'll need to consider when you're registering a pocket-size business in the U.s..

Yous'll soon know how to annals your business and get the stability and legal security which individuals who are just starting an online business demand.

Practice I Need to Annals My Business?

Although you can run a business concern without registering it, it's a good idea to incorporate information technology equally your business concern grows. Registering businesses makes them official in the eyes of the government, and it ensures both your personal and business organisation assets are legally secure.

Steps to Register a Business organization

Registering your concern isn't complicated, merely it does require y'all to take the right steps. The procedure to register equally a legal entity involves:

i. Naming Your Business

Every ecommerce entrepreneur will need to take the starting time step towards registering their business by deciding on a name for their online store.

It's essential that you lot come upwards with a memorable name for your online store– something which is going to catch the eyes of your audience and leave a lasting impression. Make sure that the name is related to your niche, and something which you'll be able to build a marketing strategy effectually.

Coming upward with a business organisation name that volition stand the examination of time can be tricky. Check out some of your competitors and analyze the types of names which they use. Make a note of the ecommerce business names which you like and then think about how your idea compares with information technology. Does your idea stand out from the crowd? If not, what tin you practice to make it unique? You lot tin can too use a business organization name generator to get ideas for your company name.


ii. Registering a Business Proper noun

One time you've come up with an amazing name for your ecommerce business you've already overcome one of the nearly difficult parts of registering a business. It'southward critical to make certain that your concern name isn't already registered with the United States Patent and Trademark Role (USPTO). The USPTO volition automatically reject any registration for a concern name that's already registered in their organisation. You'll also lose any processing fees from the application.

To avert any of these problems, inquiry your local business organization directories to verify if the business organisation name you lot'd like to employ is available. You tin also use USPTO'south free tool to check if your business proper noun is available.

Future-Proofing Your Concern Name

When you've found a memorable concern name that is available, take some time to think almost the long-term goals of your concern. Exercise y'all think that the proper name of your business is futurity-proof? Will it stand the test of time?

Endeavor to avoid choosing a business name which stems from a current trend. If yous were to name your ecommerce business 'Selfie Stick Corporation' y'all may run across success initially, but how pop volition your business be in the next few years?

It's important to consider the staying-power of a name before you register your business, as it'll be inconvenient to change your name afterwards on. Irresolute your name once you've created an established ecommerce business organization is a hassle legally, and can besides pb to confusion for your existing customers.

3. Picking Your Concern Entity

After you've decided on a proper noun for your ecommerce business, you'll need to choose the type of business entity which best fits your online store. There are 2 master options; registering your business as an LLC, or incorporation. At that place are distinct differences between these two options, and then we've broken down the cardinal points which you lot'll need to know so you can make the all-time decision for your ecommerce business.

LLC

Setting upward your business as an LLC will crave less paperwork than it would if you were to incorporate, which means that you'll have more time to focus on getting your store off the ground.

When you've registered your business as an LLC, you lot won't exist personally liable for any debts which your company accumulates. This means that your personal assets like your savings, motorcar, and firm will exist completely safe if anything were to happen to your company.

Another do good of choosing to register as an LLC is that you'll be able to hire your personal assets to your business. For example, if you lot run your ecommerce business from a home office, you're able to merits that space as a business expense. You'll relieve some extra money past doing this which you'll be able to put into other aspects of your business organisation.

Corporation

When most think of corporations they call back of multi-one thousand thousand dollar companies with hundreds of employees, but incorporation only ways that you'll develop from a sole proprietorship into a company which is formally recognised as a legal business entity.

There are 2 main options which businesses tin choose when they are incorporating; registering equally an 'Due south' corporation, or a 'C' corporation. There are no prerequisites to registering every bit either, information technology's all down to which option is ameliorate for your ecommerce business concern.

Registering your ecommerce concern as an 'S' corporation will give you lot the selection of 'laissez passer-through taxation', which ways that your ecommerce concern will not exist taxed on a business level. Instead, yous'll pay income tax on the acquirement that your ecommerce business concern generates, just non the actual business itself.

On the other mitt, 'C' corporations are considered every bit a carve up entity when information technology comes to tax. This means that your ecommerce business organisation will be subject to 'double-taxation', which means that you'll be taxed on your business organization' profits and you'll withal be taxed on your personal income.

Whichever structure y'all choose for your business entity, bare in heed that it isn't gear up in stone. As your business matures you'll be able to move from one construction to another depending on the needs of your ecommerce business.

iv. Choosing the State You'll Register In

Take some time to consider in which country you'll register your ecommerce business organization. The tax rates vary from country to state. Notwithstanding, you aren't required to register in the state where you operate your small business.

Registering a new business in a state which has low, or non-existent sales tax rates makes a lot of sense as it'll save you coin down the road. Amazon, 1 of the biggest online retailers in the globe, takes advantage of this choice .

Have a expect through each state'southward tax rates and make up one's mind which state is best to register in for your business' goals and immediate needs. Some states accept no sales taxation, and then they don't have a registration procedure. Examples include:

  • Delaware
  • Montana
  • Oregon
  • Alaska
  • New Hampshire

For other states, bank check with their local office to find out what the registration procedure comprises.

5. Obtaining Your Business' Federal Tax Number

Obtaining Your Business' Federal Tax Number

Yous likewise need to register your business on a federal level. To do this, you'll need to obtain a federal taxation number for your ecommerce business. Your federal revenue enhancement number is as well known as an employer identification number (EIN), and it's the equivalent of a social security number for your business.

As y'all'll exist filing tax returns and submitting reports on your business organisation activity, it's essential that you go a EIN number for your concern. Without this number, you won't be able to submit your tax forms to either the federal or the state government.

You tin apply online for your ecommerce business' EIN number. It's a simple application class and you lot'll be able to get your EIN number on the same day that you submit the online form.

half-dozen. Opening a Business Bank Account

Banks in the US require documents of small business registration before they will allow you to open up a business banking company account. It's essential that ecommerce entrepreneurs know how to register an online business organisation if they are looking to open up a business organisation bank account.

As an entrepreneur, you'll notice that opening a business organization account is a great fashion to separate your personal finances from those which you'll be using to fund your ecommerce business. Having a business account is also clever for revenue enhancement reasons– you'll be able to invoice certain payments and merits them as business expenses.

Opening a business organization account volition give you a clear idea of the amount of money which your business is costing each calendar month, and you lot'll know the exact amount of coin which your ecommerce business is making.

It'll besides requite your ecommerce business more than professional person credibility. Customers will make payments for orders to your business account, instead of your name. This distinction instills conviction in your customer that your business is legitimate.

How Much Does It Cost to Register a Business organization?

At that place's no toll to unofficially register a small business, but yous may have to pay sales revenue enhancement depending on the state you choose to incorporate in.

Summary: How to Go Near Registering a Visitor in 2021

At present that you've read how to register a business organisation you can become alee and go started on running a legitimate ecommerce business. One time you've completed the registration process we've detailed in this article, your business will be considered equally a legal entity. And yous'll officially be the possessor of a professional business.

In summary, here are the 6 steps to register a business:

  1. Cull your business name
  2. Annals with the USPTO
  3. Select your business entity
  4. Make up one's mind on the state you lot'll register in
  5. Obtain your Employer Identification Number (EIN)
  6. Open a business organization banking company business relationship

If you have any further questions regarding the legalities of registering a business in the U.s.a., just drop u.s.a. a line in the comments section. Remember, all questions are skilful questions!

Want to Learn More?

  • How I launched my eCommerce store in less than 30 minutes (with products)
  • Case Study: International Dropshipping Vs. Dropshipping in the USA
  • How to Convert Asian Sizes to Us Sizes
  • Business concern Name Generator: Generate business organisation names instantly

Is there anything else you'd like to know more virtually and wish was included in this article? Permit us know in the comments below!