Thu, 04 Mar 2021

Legal Requirements for Starting a Business in the USA

7Newswire
18 Feb 2021, 22:51 GMT+10

Are you looking to start a business in the United States but don't know how to go about it?

This problem is way too common and you should know that you're not alone. The legal processes can be complicated to understand and follow.

That's why we've put together this guide to help you start your business in the US with minimum issues.

So, let's find out how.

Steps to Start a Business in the US

Here's how you can establish your business in the USA with minimal difficulties.

1. Formalize Your Business Name

Your business name is its identity and that's why you should put effort into coming up with a good one. Once you've found a unique business name, you should register it as a legal entity.

What's more, you ask?

It also helps to get a trademark for the business to ensure that no one else can use it too. You should also consider purchasing a domain name.

2. Select a Legal Entity

Once you've got your company name registered, you need to choose a company structure. Each structure has its own set of pros and cons that will help you decide. Also, they each offer a set of unique features as well.

Once you've selected a company structure, you also need to do the relevant filing for it to formally use it. Here are the various types of company structures and their filings:

  • Sole Proprietorships: Fictitious Business Name (FBN) or Doing Business As (DBA)
  • Partnerships: Fictitious Business Name (FBN) or Doing Business As (DBA)
  • Limited Liability Companies (LLCs): Articles of Organization
  • Corporations: Articles of Incorporation
  • Non-Profit Organizations: Depends on your state

3. Get Your Tax ID

Just as it's essential for an individual to get a social security number (SSN), it's essential for entrepreneurs to get an employer identification number (EIN) for their business.

Without a tax ID, it's not possible to hire employees, open a bank account, or even earn and report income.

4. Create Contracts & Agreements

Yet another important step in setting up a business is that of creating essential contracts. These can help you avoid legal issues at a later stage in case any problems arise.

Here are some important agreements you should consider creating:

  • Independent Contractor Agreement
  • Employment Agreement
  • Corporate Bylaws
  • Operating Agreement
  • Confidentiality Agreement

5. Open a Business Bank Account

Finally, to be able to earn income and pay your business expenses, you should open a business bank account. This is recommended especially because it's essential to keep your personal expenses separate from your business expenses.

To open a business bank account, you need to submit your EIN, company formation documents, and other related documents.

Want to learn more about how you can start your business in the United States? Check out this infographic designed by GovDocFiling.

Author Bio

Brett Shapiro is a co-owner of GovDocFiling. He had an entrepreneurial spirit since he was

young. He started GovDocFiling, a simple resource center that takes care of the mundane, yet

critical, formation documentation for any new business entity.

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