How to Get a Business Started…Legally and Beyond!
Here are the steps needed to get your business started.
Are you thinking about starting a business? Do it! Chances are you’ve been validating that idea, staying close to the problem you’re solving, and getting valuable feedback from your customers. Once you’ve found the big idea you’re committed to, how can you make it official!?
1. Choosing a name: You may already have a name in mind when doing customer discovery, but when it comes to making it real, the business side will go hand-in-hand with the marketing and branding side when considering what you’ll call the name of your entity. Run a quick business search on the secretary of state’s site (here’s Georgia's) to see if you’re in the clear. In cases where a name you desire has been taken or you intentionally want to hide the legal name, a DBA or doing-business-as can be helpful. That way you can market and brand as one name, while being officially registered under another name. Either way, decide the name that best fits your identity.
2. Legal entity: Choose a structure that benefits you most. Be it LLC, LLP, C. Corp, B. Corp, Non Profit, etc. There are pros and cons to each, it may be best to consult with your tax practitioner or read a few articles on it. I know “LLC Twitter” has their thoughts on which one you should go with. Here’s some info about which structure may be right for you. Whichever direction you decide, know that there is a lot of content surrounding legal structures, so don’t feel intimidated, decide what’s most important to you and try to optimize for that.
3. Location of formation: Once you decide what you’ll be (i.e. LLC, C.Corp, etc.), you’ll need to decide where you’ll be, or more accurately which state you’ll want your business to be registered in. Different states have different rules, exposures, and requirements. This includes registering cost and annual renewal fees. Should you choose to register in another state, i.e. you’re a Georgia business wanting to incorporate in Delaware, it can add a level of fees, but can also have it’s benefits too. Without a physical presence in a state, you’ll need to find or hire a registered agent.
4. Registered agent: When forming a business you’ll need to list a registered agent. This agent acts as the intermediary between the state and the business. They’ll receive and distribute communications from the state to your business. You can list yourself, another person, or an entity as the registered agent, they just have to have a physical address located within the state. When registering in a state where your business has no physical presence, you’ll need to pay a service to act as registered agent, OR phone a trusted friend that lives in the state.
5. Filing for Certificate of Organization/Articles of Incorporation: Once you’ve thought through steps 1-4, you’re ready to file. Most states have an online portal where you can begin. Once you’ve logged in, click create or register a business. Once you’ve completed the filing and paid the required fee, you’ll need to await confirmation from the state typically via email.
6. Employer Identification Number (EIN): Once you’ve received your official Certificate of Organization or Articles of Incorporation, you’ll need to apply for an EIN. An EIN is like a social security number for your business, and oftentimes is a basic requirement for filing taxes and opening a bank account in your business’ name. You can apply online through the IRS portal, and receive your EIN as soon as you’ve completed the online application.
Now that we’ve gone through some of the overall basics, here are a few resources and services to consider:
Stripe Atlas - Stripe is a payment system utilized by companies from startup to Fortune 500 status and has made its way into many lives and businesses over the years. They have a solution that creates businesses based out of Delaware.
Doola - Doola helps you form an LLC, C Corp or DAO, keep it compliant and legal year-over-year, and get paid easily.
Zen Business - Zen Business offers worry free services and expert support you need to form your LLC accurately and on time.
Do it yourself - Follow steps 1-4 above, and it will help guide you along the process.
Congratulations, you’ve made things official. You’ve got Articles of Organization in hand, an EIN, registered in a state of your choosing, and a name suited for your business mission. You’re even about to fill out your operating agreement! As you’re navigating this process remember to evaluate your options, use each resource to empower yourself, and above all, get started.