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What Are the Requirements For Starting Your Own Business?

Wondering which documents you will need to start your own business in the USA? Don’t worry, you're not alone. Entrepreneurs who are starting a new business often struggle with understanding the legal requirements and processes.

It’s understandable.

From legal contracts to licenses and registration documents, there is a lot that you need to take care of before you can start your business.

It can definitely get overwhelming.

To help clear up some of the confusion, we’ve listed all of the essential requirements for establishing a business in the US.

Starting a New Business: A Quick Guide

In this section, we list all the process and legal requirements that you should be aware of if you want to start a US-based business.

1. Register Your Business Name

One of the first things that you need to do before you begin with the legal formalities is to pick a memorable business name. Keep in mind that it should not be too similar to other companies in your niche. At the same time, it should be something that is easily scalable and is also brandable.

It is also a good idea to check if the name of your business is available as names for social media handles and domain names. After all, maintaining an active online presence is important to get more leads and grow your revenue.

Once you have selected a name that you like, it’s time to get it registered. This step will establish your business as a legal entity.

2. Complete Your Federal and State Filing

After business name registration, the next step is to get your business authorized. For this, it is necessary to form a legal business entity and pick a suitable business structure. This is an important choice to make as the structure will directly impact your ownership structure, operational needs, and taxation arrangement.

There are a variety of entity types that you can choose from. They include Limited Liability Company (LLC), Partnership, Sole Proprietorship, Corporation, and others. Depending on your choice, you’ll have to file the documents needed with the Secretary of State in the state where you are interested in conducting business.

In addition to this, all businesses are also required to get a unique Employer Identification Number or EIN. Without an EIN, you can’t hire employees, open business bank accounts, or pay taxes.

3. Create Contracts and Acquire Licenses

Professional disputes can exhaust your time and resources. To avoid such instances, it is essential that you create legal contracts and agreements for all the parties that you are dealing with. This includes vendors, business partners, contract-based workers, and employees.

Another important thing to take care of is to keep your professional and personal assets and finances separate.

For some businesses, another requirement could be to obtain special licenses and permits. Typically, businesses that are related to alcohol, medicines, and transportation have to get them. Check with your local governing body if your business may need any special permits or licenses.

Do you want to learn about legal requirements of forming a business?

Check out the infographic below, created by GovDocFiling.

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