This guest post provided by Burner partner, MyCorporation. Visit them for more advice and tools to help you easily create your next business.
Once you have an idea for a new business and a business plan drafted up with a timeline to properly execute it, you might wonder what the next legal steps are to legitimizing the company. Rather than try to haphazardly figure it out through a Google search, we’ve created a quick 6-step primer to help you get covered and in compliance.
1. Incorporate or form an LLC
Maybe you’ve already done this and maybe you haven’t, but it’s priority number one for any small business getting started. Incorporating allows you to keep your personal assets separate from your professional ones. This is critical in the event that a serious issue, such as a lawsuit, arises because it will not affect your personal assets. Additionally, these legal entities allow you to establish credibility with consumers and provide a formal structure for your business.
2. Register your trademark
Chances are highly likely that your new business has a unique name, design, or logo — and it’s important to take the time to register the trademark and claim it as your own. Doing so ensures that your identity is protected and nobody else can infringe on your mark. Once you’ve conducted a name search to make sure the trademark is indeed original, then you can file an application to register it with the United States Patent and Trademark Office. The mark belongs to you after that, and it will be much easier for consumers to identify your brand’s goods and services.
3. Figure out which business licenses and/or permits you’ll need
This will vary a bit depending on the industry your business is in, but most businesses require at least one license in order to operate. Check in with the U.S. Small Business Administration (SBA) to better determine the documents your business will need from federal and state agencies.
4. File for an EIN
Also referred to as a Federal Tax ID, an Employer Identification Number (EIN) is necessary for any business that plans to hire employees. Beyond new hires, you may want to apply for an EIN if you’re interested in safeguarding your business documents. If you would prefer not to use your social security number (SSN) as your identification on government forms and official documents, an EIN can be used instead and is less sensitive than an SSN in the event of identity theft.
5. Determine if you will need a DBA
A Doing Business As name (or DBA) allows you to conduct business or accept money under a name that is different from your existing business name. Even if you decide not to do that, you may file for a DBA anyway in order to open a business bank account. A certified copy of your DBA is a requirement from most banks to open a business account since entrepreneurs aren’t allowed to use their personal accounts under their business name.
6. Make sure you have a registered agent!
A registered agent, or RA, is the state’s point of communication with a corporation or LLC. They accept legal and official documents on behalf of your business which can include annual reports, renewal reminders, and legal notices like a court summons. An RA provides your business with an extra layer of privacy, ensuring that you receive these documents in a timely manner but out of the public eye to keep from potentially damaging the reputation of your business.
Deborah Sweeney is the CEO of MyCorporation.com which provides online legal filing services for entrepreneurs and businesses, startup bundles that include corporation and LLC formation, registered agent services, DBAs, and trademark and copyright filing services. You can find MyCorporation on Twitter at @MyCorporation and Deborah at @deborahsweeney.