There are multiple things necessary to legally establish a business. However just like with most things in this country, every state has its own laws. I’ll be using the State of Maryland for this example. Below is a list of top 3 things needed to form a business.
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Select & Create Your Business Structure:
The first step is to determine which form of business structure is most appropriate for your operations.The four most common structures are (sole proprietorship, partnership, corporation, and limited liability company).Each structure has its own advantages and disadvantages. Some business structures don’t require a legal registration with the state.
2. Register Your Business Name:
The name of your business is very important.Most people think the name they have is unique, but you’ll be surprised which names are no longer available.You need to search if that name is available.In some states like Virginia you must pay $10 to register the name of your company.In other states the name is part of the registration form.
3. Apply For Your Federal Tax Identification Number (EIN):
Once you’ve determined the structure and the name of your business, and you’ve registered the business with your state, the next step is to register with the IRS for a federal tax identification number (EIN).This will allow you to report taxes and file your tax return as an organization.