Starting a business is exciting, but before you can legally operate, you need to register with your state and possibly your city or county. This guide walks you through the process step-by-step, so you can get your business officially up and running.
Step 1: Choose Your Business Structure
Before you can register, you need to decide what type of business entity you'll be. This affects your taxes, liability, and paperwork. Here are the most common options:
Sole Proprietorship
Best for: Solo entrepreneurs, freelancers, side hustles
Easiest and cheapest to set up
You and the business are the same legal entity
You're personally liable for business debts
Report income on your personal tax return (Schedule C)
Cost: Usually $50-150 depending on your location
Limited Liability Company (LLC)
Best for: Small businesses that want liability protection
Separates your personal assets from business liabilities
More credible than sole proprietorship
Flexible tax options (can be taxed as sole prop, partnership, or corporation)
Requires annual reports and fees in most states
Cost: $50-500 to form, plus annual fees ($0-800 depending on state)
Corporation (C-Corp or S-Corp)
Best for: Businesses planning to raise investment or scale significantly
Separate legal entity from owners
Can issue stock and raise capital
More complex paperwork and regulations
C-Corp: Double taxation (business and personal)
S-Corp: Pass-through taxation (avoids double taxation)
Cost: $100-800 to form, plus ongoing compliance costs
Our Recommendation:
Most new entrepreneurs should start with either a sole proprietorship (simplest) or LLC (best protection). You can always convert to a corporation later if needed.
Step 2: Choose and Register Your Business Name
Check Name Availability:
Search your state's business name database (usually on Secretary of State website)
Make sure the name isn't already taken or too similar to existing businesses
Check if the domain name is available (use Namecheap.com or GoDaddy.com)
Search USPTO.gov to see if anyone has trademarked the name
Register Your Name:
For Sole Proprietorship:
If you're using your own name (e.g., "Sarah Johnson Consulting"), you usually don't need to register. If you're using a different name ("Sunshine Marketing"), you need to file a DBA (Doing Business As) or Fictitious Business Name with your county clerk or state.
For LLC or Corporation:
Your business name gets registered automatically when you file your formation documents with the state.
Step 3: Register with Your State
This is where you make your business official with your state government.
For Sole Proprietorships:
File a DBA (Doing Business As) with your county clerk's office or state (if using a business name)
Cost: $10-100 depending on location
Timeline: Usually processed within 1-2 weeks
Some states require publication in local newspaper (adds $50-200)
For LLCs:
Go to your state's Secretary of State website
Find the "Business Formation" or "Start a Business" section
File Articles of Organization (sometimes called Certificate of Formation)
Provide: Business name, address, registered agent, member names
Pay filing fee ($50-500 depending on state)
Timeline: 1-4 weeks for approval (faster if you pay for expedited processing)
What's a Registered Agent?
A registered agent is a person or company designated to receive legal documents on behalf of your business. You can be your own registered agent (free) or hire a registered agent service ($100-300/year). If you're your own agent, you must have a physical address in the state and be available during business hours.
Step 4: Get Required Local Permits and Licenses
Depending on your business type and location, you may need additional permits:
Common Licenses:
General Business License: Required in most cities/counties ($25-400/year)
Home Occupation Permit: If operating from home ($0-200)
Professional License: For regulated professions (real estate, cosmetology, contracting, etc.)
Sales Tax Permit: If selling physical products (free in most states)
Health Permits: For food businesses, salons, childcare
Zoning Permit: Verifies you can operate your business type at your location
How to Find What You Need:
Visit your city or county clerk's website
Use SBA.gov's license lookup tool: sba.gov/business-guide/launch-your-business/apply-licenses-permits
Call your city's business licensing department and ask what's required for your business type
Step 5: File for Business Taxes
Sales Tax Permit:
If you're selling physical products or certain services, register with your state's tax authority to collect sales tax. Go to your state's Department of Revenue website and look for "Sales Tax Permit" or "Seller's Permit." This is usually free.
State Tax ID:
Some states require a separate state tax ID for withholding taxes if you have employees. Check your state's Department of Revenue website.
Step 6: Create an Operating Agreement (for LLCs)
While not always legally required, an Operating Agreement is highly recommended for LLCs. It outlines:
Who owns what percentage
How profits and losses are distributed
How decisions are made
What happens if someone wants to leave
You can find free templates online or hire a lawyer to draft one ($500-1,500). Even if you're a single-member LLC, having this document protects your limited liability status.
Things to Be Mindful Of
Annual Reports and Fees:
Most states require LLCs to file annual reports (sometimes called Statement of Information) and pay annual fees. Missing these can result in your business being dissolved. Mark your calendar for these deadlines.
Separate Business and Personal:
Once you form an LLC, keep your business and personal finances completely separate. Never pay personal expenses from business accounts or vice versa. This is crucial for maintaining your liability protection.
State-Specific Quirks:
California: Has high annual LLC fees ($800/year minimum)
Delaware: Popular for corporations but not usually best for small businesses
Nevada, Wyoming: No state income tax, popular for LLCs
New York: Requires publication of LLC formation in newspapers ($1,000-2,000)
Foreign Registration:
If you form your LLC in one state but do substantial business in another state, you may need to register as a "foreign LLC" in that second state. Substantial business usually means having an office, employees, or significant sales there.
Quick Reference: State Registration Websites
Most states handle business registration through the Secretary of State office. Here are some examples:
California: bizfileonline.sos.ca.gov
Texas: sos.texas.gov
New York: dos.ny.gov
Florida: sunbiz.org
Illinois: cyberdriveillinois.com
For your state, search "[your state] Secretary of State business formation" and you'll find the right website.
Total Time and Cost Summary
Sole Proprietorship:
Time: 1-2 weeks
Cost: $50-250 (DBA filing, business license)
LLC:
Time: 2-6 weeks
Cost: $200-1,000 (state filing, registered agent, licenses)
Plus: Annual fees (varies by state)
The Bottom Line
Registering your business might feel like a lot of paperwork, but it's essential for operating legally and protecting yourself. Most people can handle this on their own without hiring a lawyer, especially for sole proprietorships and simple LLCs. Take it step by step, and you'll be officially in business within a few weeks.
Next up: Getting your EIN (tax ID number) so you can open a business bank account.