How to Register Your Startup Business: A Step-by-Step Approach to Legal Documentation
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To get your new business up and running, there are a number of administrative steps you’ll need to complete. In particular, you should be prepared to fill out some paperwork, completing a range of legal documents in order to officially register your company, then operate it legally.
Keeping up with this deluge of paperwork can be intimidating. To help keep everything straight, consider this roundup of essential documents.
Essential Documents for Registering a Startup Business
1) Business Plan
You don’t have to have a business plan, legally speaking, yet starting with this document can provide you with the insights you need to complete the rest of these documents seamlessly and strategically. Additionally, you’ll need a business plan if you ever decide to seek external investments or business financing.
A business plan should outline things like your business goals, primary revenue streams, target audiences, and financial projections.
2) Articles of Incorporation
Depending on which business structure you choose for your startup, you may or may not need this document.
By default, your new startup will be classified as a Sole Proprietorship or a Partnership. Should you choose to continue operating it on those terms, you won’t need to complete Articles of Incorporation.
However, if you decide to register your business as an LLC, completing Articles of Organization will be necessary. Note: An LLC will provide you with personal liability protections, a broader range of financing options, pass-through taxation, and enhanced credibility. In other words, taking this extra step can yield some significant benefits.
The information required by your Articles of Organization will vary by state; if you register for an LLC in New York, the documentation may be a little different than if you registered in Florida. But generally, you just need to provide a few basics about the nature and duration of your business, the contact information of you and your partners, and the name of your Registered Agent.
When you file your Articles of Organization with the Secretary of State, you will also need to pay a registration fee. This may be anywhere from $20 to $300, depending on the state.
3) Employer Identification Number (EIN)
Your EIN is sort of like a Social Security Number, only it’s for your business, not for you as an individual. You won’t necessarily need this number right away, but it’s a must-have before you process payroll or file your business tax returns.
To obtain your number, you’ll just need to submit an application via the IRS website. For those who live in the United States, getting an EIN is free of charge.
4) Business Permits
Depending on your location, as well as your industry, you may or may not need to apply for certain business permits. For example, in many municipalities, it’s necessary to have a permit if you’re serving food, providing transportation, or hanging any kind of external signage on your storefront.
To find out about the business permits you’ll need, it’s easiest to simply reach out to the local Chamber of Commerce.
5) Operating Agreement
An Operating Agreement is another example of a document that’s not legally mandatory, but it can certainly be prudent to have.
Operating Agreements outline how your company is managed day to day, how you split daily responsibilities with your business partners, how you’ll bring new partners on board, and how you allocate profits. This document can potentially help you avoid legal conflicts down the road, so it’s worth taking the time to develop an Agreement with your business partners.
6) Intellectual Property Documents
Not every business has IP to protect, so this may or may not apply to you. But if you do have proprietary products, recipes, codes, or the like, you may wish to talk with a business attorney about securing the right IP documents. Some common examples include patents, copyrights, and trademarks.
7) Tax registration
You may also need to establish your business as a taxable entity.
Be aware that the way you report to the IRS depends on the legal structure you choose for your business. For example, if you run your startup as a Sole Proprietorship, you don’t need to file a business tax return; you’ll simply declare your profits or losses on your personal tax return. Meanwhile, with a Corporation, you will pay business taxes in addition to personal taxes, so registering with your city, county, and/or state is a must.
8) Contract Templates
If you’re going to conduct business on a contract basis, it’s smart to create some standard templates you can use.
You may need contracts to structure and shield your relationships with customers, with vendors, and/or with your employees.
9) Insurance Documents
While not a legal document per se, obtaining appropriate business insurance (e.g., liability insurance, property insurance, etc.) is essential for protecting your business.
Get Your Business Documents in Order
Nobody launches a business simply so that they can fill out paperwork. With that said, having the right documents is a crucial preliminary step for establishing startup success. Make sure you know the documents you need to shore up your business, and that you seek further counsel as needed from a business coach, attorney, or a representative of your Chamber of Commerce.
Author Bio
Amanda E. Clark is a contributing writer to LLC University. Additionally, she has appeared as a subject matter expert on panels about digital and content marketing.
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