How to Start a Business

Starting a business requires several legal and administrative steps. While the specifics vary by state and industry, the general framework is consistent.

Step 1: Choose a business structure. Options include sole proprietorship, partnership, LLC, and corporation. Each has different liability, tax, and management implications.

Step 2: Choose and register your business name. Check availability with your state's secretary of state. If using a name different from your legal name (sole proprietorship), register a DBA ("doing business as").

Step 3: Register with the state. File formation documents (Articles of Organization for an LLC, Articles of Incorporation for a corporation) with your state's secretary of state. Pay the filing fee.

Step 4: Get an EIN. Apply for a free Employer Identification Number from the IRS. You need this for tax filing, hiring employees, and opening a bank account.

Step 5: Obtain licenses and permits. Depending on your industry and location, you may need federal, state, and local business licenses, professional licenses, health permits, or zoning permits.

Step 6: Open a business bank account. Keep personal and business finances separate. This is critical for maintaining liability protection.

Step 7: Set up accounting and taxes. Understand your tax obligations (income tax, self-employment tax, sales tax, payroll tax). Consider hiring an accountant.

Step 8: Get insurance. Consider general liability, professional liability, property insurance, and workers' compensation (required if you have employees).

Step 9: Comply with employment laws. If hiring, comply with federal and state employment laws regarding payroll taxes, workers' compensation, and anti-discrimination requirements.

This is legal information, not legal advice.