By George Christopher Thomas
These are the key steps in starting a new business, navigating the government bureaucracy, and getting all the publishing and government requirements taken care of for paperwork purposes
The American Dream can mean many things, but starting your own new business is at the top of the list for most people. Being your own boss, calling the shots, and overseeing a business empire, no matter how big or how small, is achievable in America. There are, however, certain government regulations a budding entrepreneur needs to follow to make sure all their paperwork and licensing are in order. Once you know the procedure, you will be able to make the dream of owning your own new business a reality.
First and foremost is the business name. This will be the official name that other people doing business with you know you as. In other words, this is your trade name or Doing Business As (DBA) name; it’s how the world sees you. After picking out a new business name, it needs to be registered with the city, county, state, and federal government. For many people, choosing and establishing a new business name is rather daunting. That is why businesses like ours, that help individuals start businesses, exist. We assist you in every step of setting up a new business.
In order to choose a name, one must decide on what type of new business they are forming. Is this going to be a corporation or a sole proprietorship? Is it going to be a Limited Liability Company (LLC) or a Limited Partnership (LP)? In nearly every case, these entities need to be registered with the Secretary of State’s office in the respective state’s capital. Knowing your options and the legal structure of each entity is important for sorting out operating agreements and setting up future contracts.
A lot of people, for tax reasons, choose to register their businesses in Delaware, Wyoming, or Nevada. However, where one begins their business venture might not be the same place they end up. Some people find a sole proprietorship perfect for their small business, while others, because of the nature of the business, need to become a corporation or LLC. Whatever the case happens to be, the first step is setting up the new business name with the state and county government.
Now, every new business is different, and the best ways to set up their government paperwork may be different as well. However, getting the first step done (choosing a name and registering with the government) can be the hardest hurdle. Once that first step is complete you will need to continue registering the necessary paperwork with the respective governments.
The next step is to make sure the new business name is reserved on a county level as well. It might seem redundant, but after registering the business at the state level, checking and making sure it is registered on the county level is also important to reserve the official legal rights to the business name. You’ll typically keep the state paperwork on file as you navigate the next level of bureaucracy, which is the county government.
Usually, registering a new business name is done at the county clerk’s office, also called the registrar recorder. There are fees involved with registering, as well as a state law that stipulates the need to post and publish your business name in a local newspaper for four weeks so others could (theoretically) contest the name if it were the same or similar to their own. This is another tricky aspect of starting a new business: the need to know all these different government regulations and what needs to be done to be legal and compliant.
Check if there are publishing requirements for your new business. In nearly all cases, there are, and connecting with an expert who works at a local newspaper can make the process easier. In most cases, the newspaper staff have dealt with this before and know exactly the requirements for filing and publishing a new business name.
After all the name registration paperwork is done, one of the hardest steps is over. Similar requirements continue, but the most confusing and under-explained bit is over. Now that the new business name is registered, the federal government, your “Uncle Sam,” needs to know that you are in business as well. This is the second step in setting up a new business.
Every level of government requires you to pay, and contributing to the tax base takes place on the local, state, and federal level. It is a good idea and a best practice to get an Employment Identification Number (EIN) from the Internal Revenue Service (IRS). This EIN number acts as a business entity number, which can be thought of as something like a social security number for your new business. Every new business should have one, and one can retain a new business specialist to handle this paperwork as well.
Once the new business name and EIN number are sorted, you need to look to the city government to get a business license. Each piece of government paperwork is done at a different level of government. The city business license is usually handled at the local city hall. In some cases, the business will not need to register at all, but it’s very common for cities to require businesses to have a license. You’ll need to handle the paperwork at city hall. This is the third step in setting up a new business.
After getting the license taken care of, there may be a need for a wholesale license, or as it is better known, a reseller’s permit. This comes from the state government, usually a tax board, and allows one to purchase items wholesale and then sell them retail. Again, navigating the bureaucracy is key. You need to know what permits and licenses to get, and what order to get them in. If you are in the food and beverage business, there needs to be a certification and check-off with the health department as well. These are the fourth and fifth steps in setting up your new business and making the “American Dream” a reality.
Each step in starting a new business requires knowledge about which government to register with, why they need you in their system, and how you can do so. It’s also smart to understand when you don’t need to register with certain governments, and when doing so would be a mistake.
Consulting a new business expert is the best way to navigate the bureaucracy and cut through all the government red tape. From filing with the state, to publishing in the local newspaper, to making sure you do not register with unnecessary levels of government, being business savvy starts the minute you decide to register your new business name.
As a new business consultant, my office can help with all of that. Please call or text 818-605-8940 to set up an appointment and begin the process of following your own American Dream.