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

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

Once your online shop has been registered every bit a legal entity, you'll exist protected if whatever of your customers, or competitors, determine to file legal activeness against yous.

If you're new to the concept of registering a business, the thought tin can be quite daunting. Nosotros've created this commodity to walk you through all the necessary steps which you'll need to consider when you're registering a small business in the US.

Y'all'll soon know how to register your concern and go the stability and legal security which individuals who are just starting an online concern demand.

Don't wait for someone else to practice it. Hire yourself and kickoff calling the shots.

Get Started Gratis

Do I Need to Register My Business?

Although you tin run a concern without registering it, information technology'southward a skillful idea to incorporate it as your business grows. Registering businesses makes them official in the optics of the authorities, and information technology ensures both your personal and business avails are legally secure.

Steps to Register a Business

Registering your concern isn't complicated, but it does crave you to take the right steps. The procedure to register equally a legal entity involves:

1. Naming Your Concern

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

It'southward essential that you come up up with a memorable name for your online shop– something which is going to catch the optics 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 around.

Coming up with a business organisation name that will stand up the test of fourth dimension can be tricky. Check out some of your competitors and clarify the types of names which they use. Make a notation of the ecommerce business names which you like and then remember about how your thought compares with it. Does your idea stand up out from the crowd? If non, what tin can yous exercise to make information technology unique? You tin can besides employ a business proper noun generator to get ideas for your company name.


2. Registering a Business Name

In one case yous've come with an astonishing proper name for your ecommerce business you've already overcome one of the well-nigh difficult parts of registering a business concern. Information technology's critical to make sure that your business organisation name isn't already registered with the United States Patent and Trademark Office (USPTO). The USPTO will automatically reject any registration for a business organisation name that's already registered in their organisation. You'll also lose any processing fees from the application.

To avert any of these problems, research your local business directories to verify if the business concern proper noun you'd like to use is bachelor. You can also use USPTO'southward complimentary tool to check if your business organisation name is available.

Futurity-Proofing Your Business Name

When you've found a memorable business name that is bachelor, accept some time to think almost the long-term goals of your business organization. Exercise you retrieve that the name of your business is hereafter-proof? Volition it stand up the test of time?

Effort to avoid choosing a business name which stems from a electric current trend. If you were to proper name your ecommerce business organization 'Selfie Stick Corporation' you may meet success initially, but how popular will your business concern exist in the next few years?

It's important to consider the staying-power of a proper noun before you register your business, as it'll be inconvenient to change your proper name later on. Changing your name once you lot've created an established ecommerce business concern is a hassle legally, and can also pb to defoliation for your existing customers.

3. Picking Your Business Entity

Afterward 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 shop. There are two main options; registering your business as an LLC, or incorporation. There are distinct differences between these two options, and so we've broken down the primal points which you'll need to know and then you tin can make the all-time decision for your ecommerce business.

LLC

Setting up your business as an LLC volition require less paperwork than it would if y'all were to comprise, which ways that y'all'll have more fourth dimension to focus on getting your shop off the footing.

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

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

Corporation

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

At that place are ii main options which businesses can choose when they are incorporating; registering as an 'Southward' corporation, or a 'C' corporation. There are no prerequisites to registering as either, it's all downward to which option is better for your ecommerce business.

Registering your ecommerce business organization as an 'Southward' corporation volition give you the selection of 'pass-through tax', which means that your ecommerce business organisation will non be taxed on a business level. Instead, you'll pay income tax on the revenue that your ecommerce business organization generates, but not the bodily business itself.

On the other hand, 'C' corporations are considered every bit a separate entity when it comes to taxation. This ways that your ecommerce business will be subject to 'double-tax', which means that yous'll be taxed on your business' profits and you'll nevertheless be taxed on your personal income.

Whichever construction yous cull for your business entity, bare in listen that information technology isn't gear up in stone. As your business matures you'll be able to motility from one structure to another depending on the needs of your ecommerce business.

4. Choosing the Land Yous'll Register In

Have some time to consider in which state you'll register your ecommerce business organization. The taxation rates vary from state to state. Nonetheless, y'all aren't required to annals in the land where you operate your minor business.

Registering a new business organization in a state which has low, or not-real sales tax rates makes a lot of sense as it'll save you money downwards the route. Amazon, ane of the biggest online retailers in the world, takes advantage of this option .

Accept a look through each land'south taxation rates and decide which land is best to annals in for your business' goals and immediate needs. Some states accept no sales taxation, 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 process comprises.

five. Obtaining Your Business' Federal Tax Number

Obtaining Your Business' Federal Tax Number

You too demand to register your business on a federal level. To do this, you'll need to obtain a federal tax number for your ecommerce business. Your federal tax number is as well known as an employer identification number (EIN), and it'south the equivalent of a social security number for your business.

As you'll be filing tax returns and submitting reports on your concern activeness, it's essential that you get a EIN number for your business organization. Without this number, you won't be able to submit your taxation forms to either the federal or the state government.

You tin can apply online for your ecommerce business' EIN number. It'south a simple awarding form and you'll exist able to become your EIN number on the same day that you submit the online form.

6. Opening a Business Bank Account

Banks in the U.s.a. require documents of modest concern registration before they will permit you to open up a business concern bank business relationship. It's essential that ecommerce entrepreneurs know how to register an online business organization if they are looking to open up a business banking concern account.

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

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

It'll too give your ecommerce business more professional credibility. Customers will make payments for orders to your business account, instead of your proper name. This distinction instills confidence in your customer that your concern is legitimate.

How Much Does It Cost to Register a Business concern?

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

Summary: How to Go About Registering a Company in 2021

Now that y'all've read how to register a business organization you can go ahead and get started on running a legitimate ecommerce concern. Once you've completed the registration process we've detailed in this article, your business will exist considered as a legal entity. And you'll officially be the owner of a professional business.

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

  1. Choose your business name
  2. Register with the USPTO
  3. Select your business organization entity
  4. Decide on the country you lot'll register in
  5. Obtain your Employer Identification Number (EIN)
  6. Open a business bank account

If you take whatsoever further questions regarding the legalities of registering a business organisation in the USA, but driblet u.s. a line in the comments department. Remember, all questions are practiced questions!

Want to Learn More than?

  • How I launched my eCommerce store in less than 30 minutes (with products)
  • Instance Report: International Dropshipping Vs. Dropshipping in the United states of america
  • How to Convert Asian Sizes to United states of america Sizes
  • Concern Name Generator: Generate business names instantly

Is in that location anything else yous'd like to know more about and wish was included in this commodity? Let united states of america know in the comments below!