The process of registering a startup or new business is complex and requires the completion of numerous legal tasks. And much like reading a recipe through before beginning to cook a challenging dish, it is advantageous when registering a startup to understand each of these unique steps before undertaking any of them. Failure to grasp the wider picture of startup registration can lead to missteps and delays. In addition, skipping over certain steps or approaching the process in an incomplete way can leave you and/or your business vulnerable to penalties and liability. Let’s look at the options you have when registering a startup.
Choosing a Business Structure
One of the most important steps of the registration process involves choosing a legal structure for your business. Business structures help determine the ways in which a business is taxed and whether or not owners may be held personally liable for company debts, losses and any corporate wrongdoing. The most common business structures are sole proprietorships, partnerships, limited liability companies and corporations.
There are both benefits and challenges associated with each business structure. As a result, it is important to speak with your attorney about which business structure best suits your company and your priorities. If you want to limit your liability, you may wish to choose to form an LLC or corporation. If you want a highly flexible management structure and a great deal of control over your business, you may want to form a sole proprietorship. There are even hybrid options available, like forming an LLC while opting to be taxed as a corporation. When it comes to business structure, one size does not fit all.
Choosing a Location for Incorporation
The other most important steps of the registration process involves choosing a “home state” in which to incorporate your business. Although most small businesses and startups choose to incorporate a business in the state where their owner or owners reside, there may be legitimate reasons to consider incorporating in a different state than the most obvious choice.
Some states are more business-friendly than others. For example, an extraordinary number of businesses choose to incorporate in Delaware because it is a corporate tax haven and has a very pro-business regulatory culture. Before you officially opt to incorporate in your home state, please consider speaking with your attorney about the possibility that another location may better serve your business’s interests. You could also get legal advice on how to incorporate in Delaware.
Name Registration and Next Steps
Once you have chosen a legal structure and a state of incorporation, it is time to register your business name and continue with the more miscellaneous tasks involved in the registration process. These steps include obtaining a federal tax identification number and filing all necessary local, state and federal permits and fees. Your attorney can help to ensure that you complete each stage of the registration process completely and correctly so that you do not incur penalties or leave your company vulnerable to liability.
Legal Assistance Is Available
If you are interested in registering your startup or new business, please consider contacting the team at LawTrades. We have helped more than 5,000 startups meet their legal needs related to matters including registration, funding, compliance, hiring and employment, intellectual property protection and drafting contracts. Our company is passionate about helping new businesses succeed. Whether you need an attorney to look over a few documents, incorporate in Delaware or you need extensive legal assistance, LawTrades is here to assist you.