After choosing and naming a business structure, you must register your business with state agencies. It usually involves filing paperwork and paying fees. City law states that only a person shall obtain a business registration certificate before engaging in or conducting business within the city. Fees are collected to help offset the cost of maintaining city infrastructure and services.
Not Having a Business Plan
Depending on your state and business structure, documents and fees must be submitted when registering your firm. You will often need to provide your business’s name and registered address. The address will appear on official documents and is used to receive essential government notices and letters. Spending time writing a business plan before launching your company may be counterintuitive. However, creating a business plan will help you clarify your goals and ensure your efforts focus on the most profitable opportunities. With a project, you can save time spinning your wheels and throwing money at business obstacles that may never be resolved.
A business plan is also helpful when pitching to investors and working with banks. It can also serve as a guide for your management team. They should all contribute to the planning process and have insight into the underlying financials so they can commit to meeting their objectives. Use your plan to measure your progress regularly.
Not Having a Business Registration Certificate
Entrepreneurs can start operating a business but must register their businesses. Business registration can help them build credibility and show potential customers, partners, and investors they’re serious about their business venture. It also allows them to access tax benefits and incentives offered by the government. Depending on the type of business, you may need to register with federal agencies to comply with specific laws, including workplace safety regulations. You’ll also need to register your intellectual property to get legal protection and a competitive edge in the market.
Hiring business registration services is best if you need clarification on your business’s requirements. They can help you choose the right type of business registration and update it regularly to meet changing business laws and regulations. It will help you avoid legal disputes and penalties, protect intellectual property, access government benefits and services, and enhance your business’s reputation and credibility. It’s also important to remember that business registration comes with compliance requirements, including bookkeeping, reporting, and attending annual general meetings.
Not Having a Business Insurance Policy
Most businesses of any appreciable size must register at the state level. The specifics of what needs to be done depend on the type of structure, how big it is, and where it’s located. Some businesses also have to register with additional government agencies. For example, companies with employees must register with the Department of Labor and get a workers’ compensation policy.
Generally, the registration process starts with filling out forms corresponding to the business’s structure. For example, if the company is an LLC, it has to file an article of organization and an operating agreement. A written document known as an operational agreement outlines the roles and powers of each member, as well as how significant functional and financial decisions would be made.
Not Having a Business License
Most states require corporations, partnerships, and limited liability companies to obtain a state business license. However, the licensing requirements for most small businesses also depend on the city and county where they operate. In some cities, a company needs a local city license and, in some cases, other permits, too. These local licenses are designed to keep auto-repair businesses from opening next door to schools or to prevent people from operating certain types of businesses from their homes, such as selling weapons or distributing drugs. In addition, some industries have federal licensing requirements that must be fulfilled before they can begin operations. Since the licenses required by a business vary by state, city, and industry, it’s essential to check with local government agencies and consult with lawyers before starting any business. In addition, a company must include licensing in its operational strategy as early as possible to avoid the costs of delays and to avoid falling out of compliance. Getting an employer identification number (EIN) before applying for licenses or permits is also a good idea because this enables the business to file taxes.
Not Having a Registered Agent
While it may seem convenient to serve as your registered agent, doing so can cost you a lot of money in the long run. You must comply with state regulations, and the penalty for failing is the suspension or dissolution of your business. A registered agent is a person or entity that will receive legal documents and compliance notices on behalf of your company. It could include lawsuits, tax information, and filing papers from the state. These notices can easily get lost in the shuffle of regular mail and advertising materials that come to your business address. It’s important to note that the registered agent must have a physical address (not a P.O. box) and be available during regular business hours to accept service of process. Many businesses opt for a third-party service that can offer this level of security and reliability. It’s true when considering expanding your business into other states requiring a registered agent. Using a national registered agent will make this transition more accessible and less expensive.
