Business Registration: Everything You Need to Know
Business registration is required by law. This type of registration allows the public to know who is operating a company.4 min read
Business registration is required by law. This type of registration allows the public to know who is operating a company. By registering a business, you are ensuring no one else can operate a company under the same structure. There are several options you can choose from to register a business, including:
- Register the business structure and operate according to its registered name.
- File for a do business as (DBA) name.
- Trademark the business name.
During the process of creating a business structure for your company, you may run across a business name that you wish to use for official purposes. Often, it is best to keep the LLC or Corporation part of a business name in its legally registered name because it helps distinguish the type of company you are operating.
Sole proprietors often find filing for a DBA provides a great avenue for operating a business under a name rather than their own name. It also enables a company owner to use a name other than the one that was chosen when setting up the structure of the business.
For those wanting to add protection to their companies' intellectual property on a state or national basis, trademarking the company is generally the best route to take. In order to trademark a company's name, however, the name must be unique enough to qualify for its own trademark, and many businesses' names will not meet this qualification requirement.
Benefits of Registering a Business Name
One of the easiest ways to register the name of a business is to register the structure of the company on a state level; this ensures the name of the company belongs to the owner, fully allowing them to operate the business under the registered name. To accomplish this goal, you will need to register the company's structure as a limited liability company (LLC), a nonprofit, a corporation, a limited partnership (LP), etc.
The steps you will take to register the structure of a business depends on the structure you have chosen as well as the state you are registering it in. There are rules that govern both LLCs and LPs. You need to research these rules because they vary from one state to the next.
Steps for Registering Your Business as an LLC or LP
Choose a name you wish for your company to operate under and make sure it complies with state rules. If you are registering the company as an LLC, its name will need to include LLC or limited company or something similar. For example, White's Heating Limited Company or White's Heating and Cooling LLC.
Next, you'll need to file paperwork and pay any required fees. When filing paperwork, you will likely need to submit an "articles of organization," which describes your company's purpose and outlines your operating agreement.
Depending on the state you are registering your business, you may not need an operating agreement. However, having one is always a good idea because it adds a layer of protection to your company and ensures its operations are in accordance with its own rules. The operating agreement outlines ownership percentages and its structure of management. If you don't have one, the company will have to operate according to the general rules set forth by your state.
Knowing When to File a DBA
Both new and already established businesses can choose to register for a DBA name, also commonly referred to as a trade name. By default, any time a new business is formed, its legal name will be the name of the entity who owns it. You can change the name, however, by filing for a DBA. For sole proprietors, a DBA enables them to use a business name without having to incorporate the company.
A DBA, sometimes called a fictitious name, gives a business owner much freedom in choosing a legal name for a company. It proves helpful for sole proprietors as well and allows them to operate their companies under a name rather than their own full personal names. For example, if Zac Robinson is starting a welding company but doesn't want to operate the business under his own name and would rather use "Robinson Welding" as the company's legal name, he can apply for a DBA.
The process of applying for a DBA is quite easy. Simply go to your state's official website and perform a search for "do business as" or "DBA." You'll be directed to the appropriate information. Or, you can visit your local county clerk's office and ask for information. You may even be able to apply for a DBA at the county clerk's office.
If you need help with business registration, you can post your legal need on UpCounsel's marketplace. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.