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Registering your business organisation with the federal government has its perks, regardless of whether you're required to do so. — Getty Images/alexsl

Starting a business is no easy feat, especially when it comes to the administrative and legal processes similar trademarking your business name, choosing the right construction, and registering your business.

Depending on the nature of your business organization, yous may need to annals with your country authorities, the federal authorities, or yous may not need to register at all. If you're unsure whether you need to register your business organisation on the federal level, here'due south what you need to know.

Exercise I demand to register my business with the federal regime?

The following lists a few of the virtually common factors that determine whether you must federally register your business:

  • Business structure. In that location are many types of business structures, like sole proprietorships, corporations, LLCs and partnerships. While sole proprietors doing business under their ain legal names are not required to annals with the federal regime, nigh other structures, including partnerships and corporations, are. Additionally, if you want to do good from tax exemption as a nonprofit or charity organization, you'll have to separately annals with the IRS as a tax-exempt entity.
  • Staffing. If you lot currently have employees or plan to hire employees in the future, you'll need an EIN to operate your business. According to the IRS, an EIN volition let you lot to "pay federal taxes, rent employees, open up a bank account, and apply for business concern licenses and permits" — all crucial business organization processes.
  • Required business concern taxes. An EIN is required for any business that plans on filing Employment, Excise, or Alcohol, Tobacco and Firearms taxes.
  • Certain organizational involvement. Most businesses that work with, or are otherwise associated with, trusts, estates, existent estate mortgage investment conduits, nonprofit organizations, farmers' cooperatives and plan administrators need an EIN.
  • Other. The IRS cites a few other reasons why a business concern would need an EIN, including whether you withhold income taxes for a non-resident conflicting, or accept a Keogh programme.

Even if you aren't legally obligated to annals with the federal government, there are some good reasons to consider doing it anyway. If your business wants to file for trademark protection, you can register with the United states Patent and Trademark role and protect yourself and your product on a federal level. You also demand to be a federally recognized entity if you e'er want to utilise for government contracts.

[Read: A Footstep past Pace Guide to Starting Your Business organization.]

Fifty-fifty if y'all aren't legally obligated to register with the federal regime, at that place are some good reasons to consider doing information technology anyway.

How to federally register your business

If you've decided to register your business concern on a federal level, the process of doing so is relatively simple. For virtually businesses, this simply means applying for a federal revenue enhancement ID, also known every bit an employer identification number (EIN).

Your EIN is a nine-digit number that identifies your business'south tax accounts with the federal regime. The IRS allows you to apply for an EIN free of charge through several different channels, including online, by mail, past fax or by phone. The person or "responsible party" applying must have a valid taxpayer identification number, such as a Social Security number or some other EIN.

Once y'all have an EIN, you tin can likewise register to pay your federal business organisation taxes online through the government's Electronic Filing and Tax Payment Organisation.

In addition to an EIN, y'all tin besides utilize for a DUNS number. Like your EIN, your DUNS number identifies your business organization like a Social Security number identifies a person. Having i can help you establish credit for your business organization, and then y'all tin secure deals with creditors and suppliers. To obtain a DUNS number, visit the Dun & Bradstreet website. This procedure might have up to thirty days.

CO— aims to bring y'all inspiration from leading respected experts. Still, before making any business decision, you should consult a professional person who tin advise yous based on your private situation.

To stay on elevation of all the news impacting your small concern, go here for all of our latest small business news and updates.

CO—is committed to helping y'all start, run and grow your pocket-sized business. Acquire more than about the benefits of modest business membership in the U.South. Chamber of Commerce, here.

Published May 09, 2019