10 Steps to Form a Business

Forming a business in the United States can be a confusing and stressful process, unless you're prepared and you've got a good idea of what you need to do. Incorporate.com presents this guide to forming a business to help you along the way.

STEP ONE

Do you have a company name?

  • YES
  • NO

A good first step is choosing the right name. Try to think of something memorable.

STEP TWO

Is your chosen name available?

  • YES
  • NOT SURE

Use a name reservation service to check what is available for you.

STEP THREE

Is the URL available?

  • YES
  • NO/NOT SURE

Is your company name available as a URL? There are services that can help.

STEP FOUR

Time to register your URL

  • DONE!
  • HOW?

Once you find an available name you’re happy with, be sure to register it.

STEP FIVE

Choose the State you want to register in

  • HOW?

You don’t need to form your business in the same state as you are physically located.

STEP SIX

Choose your legal business structure

  • DONE!
  • READ MORE

LLC, C-Corp, S-Corp and Non-Profit are all examples. Learn about the differences.

STEP SEVEN

Appoint a registered agent

  • DONE!
  • NO

State law requires a business has an ‘agent’, responsible for legal and tax documents.

STEP EIGHT

Obtain an EIN

  • DONE!
  • WHAT IS IT?

The corporate equivalent to a Social Security Number.

STEP NINE

Open a bank account

  • DONE!
  • READ MORE

Keep personal and business accounts separate.

STEP TEN

What licenses do you require?

  • READ MORE

A complicated, but essential business requirement.

Company Name

The name of your company has many implications in today’s global market, where Internet searches and social media play a key role to the success of your business. There are a number of things to consider about your company name, which is why we recommend individuals put a lot of thought into it first before they begin their formation.

Name Reservation

Even if you are not ready to form a corporation, there are services that allow you to search to see if your intended business name is available. The most comprehensive search is done on the state level through municipal website. A more general search can be done here. Only use this site as a general guide. The most accurate search should be done on a state level (state which you are intending to form your business) or through a service such as incorporate.com. Consider alternative names before embarking on your search to help save time.

Website Name

Once you have established a unique and memorable business name, your website name should be no different. Although it is NOT necessary to have a URL, or website, in order to form a company, it is highly recommended in today’s world of digital commerce and is best addressed in the early stages of a formation. There are many services that allow you to search URL name availabilities for free, such as www.whois.com. If you cannot replicate your same business name in a URL, try to come as close as possible.

Registering your Domain Name

Many of the sites that allow for free name searches will also offer registration for a fee, such as Go Daddy. The .com extension is the most desired, but consider also purchasing a few other extensions such as .net, .org and .biz. As mentioned before, it is NOT necessary to have a registered URL to form a company but it is highly recommended by formation specialty companies such as incorporate.com and best established early in the process.

Registering in a State

Alabama Alaska Arizona Arkansas California
Colorado Connecticut Delaware Ds. of Columbia Florida
Georgia Hawaii Idaho Illinois Indiana
Iowa Kansas Kentucky Louisiana Maine
Maryland Massachusetts Michigan Minnesota Mississippi
Missouri Montana Nebraska Nevada New Hampshire
New Jersey New Mexico New York North Carolina North Dakota
Ohio Oklahoma Oregon Pennsylvania Rhode Island
South Carolina South Dakota Tennessee Texas Utah
Vermont Virginia Washington West Virginia Wisconsin
Wyoming

Click on the state you are thinking about incorporating in and view the benefits that state has to offer. States like Delaware and Nevada can offer lower tax rates or simpler incorporation processes.

Choosing a Business Structure

Limited Liability (LLC) and Incorporation (Inc) are the most popular structures that small businesses form. They both offer protection from personal liability, but there are significant differences.

  1. Learn more about LLCs - Limited Liability Company
  2. Learn more about Corporations - C-Corps
  3. Compare all types of formations at once - Comparison Chart

Appointing an Agent

There are companies that specialize as registered agents for any type of service or business. Their primary responsibility is to keep accurate and complete records of all your entity transactions, litigation and service of process. This provides reliability and convenience so you can focus on your true business goals. incorporate.com offers Registered Agent Service for small businesses in every state.

EIN Number

Much like a social security number, an Employer Identification Number or EIN (also known as Federal Employer Identification Number or FEIN) is a nine-digit number that identifies a business entity. It is required on all tax filings for the entire life of the business. Corporations, most LLCs and all businesses with employees must have one of these. Although EIN’s are officially issued by the IRS, formations specialty companies, such as incorporate.com, can help obtain an EIN from the IRS on your business's behalf to help make it fast, easy and convenient for you.

Business Accounts

To protect your corporate or LLC veil, your businesses must maintain separate personal and business accounts and records. Establish a separate business bank account so that your personal assets are not mixed with business funds. Banks may also require an Employer Identification Number (EIN) in order to open a business checking account.

Business Licenses

Most state, county and local governments require companies to have the right licenses and permits in place before they open their doors. There are over 150,000 filing jurisdictions across the country, all with specific requirements. Depending on your particular industry and where you are, any number of licenses may apply to your business. Failure to obtain the correct business licenses or permits can end in fines, notices and forced closure of your business.

  1. State License: State licenses are usually required for personal or professional services like accounting, contracting, or cosmetology that have specific industry standards.
  2. Federal License: Federal licenses are required for businesses that are highly regulated by the federal government, such as ground transportation, preparing meat products, manufacturing alcohol or tobacco or providing investment advice.