Where should I register my business online? Do you plan to start an online business? Knowing where to register your business and all the requirements for starting an online business will help you avoid pitfalls along the way.

Advantages of Having an Online Business

Some of the advantages of an online business include:

  • An online business allows you to work from any location and set your working hours.
  • Online businesses require low start-up capital, making them ideal for new business owners with a limited budget.

Steps on Starting an Online Business

Here are the steps involved in starting an online business

Step 1: Choose a Business Structure

If you plan to start a business, you have to choose the structure of the business such as sole proprietorship, limited liability company or corporation.

Advantages of Sole Proprietorship

A person or a couple can start a sole proprietorship. It's the simplest form of business and requires no documentation.

Disadvantages of Sole Proprietorship

The downside of a sole proprietorship is that it exposes you to the liabilities of the business.

Advantages of Incorporating

Often, people who are forming a business entity decide to start a limited liability company or corporation which offers the owners protection from the business entity's liabilities.

Advantages of LLC

An LLC offers more management flexibility and requires less paperwork and record keeping compared to a corporation.

Advantages of Corporation

A corporation enables you to finance the growth of the business with external funds from investors.

Step 2: Decide Where to Form Your Business

How is an LLC Formed?

An LLC is formed by filing necessary documentation with the state where you want to operate in.

Where Should I Register My Online Business?

Typically, small businesses need to file paperwork in the state where the business will be located. With this, you don't have to repeat the registration process in your home state, and this will help save cost.

But if you plan to operate nationally or across multiple states or want to raise venture capital, Delaware is one of the best places to register your business.

Step 3: Choose a Name

Why Should a Name Be Unique?

A unique business name is important for an online business. Having a business name that stands out:

  • Increases the marketability of your business.
  • Reduces the risk of infringement cases from similarly named entities.
  • Increases the likelihood of getting a domain name that matches your business name.

When you have decided on a name, search the internet to see whether another business is already using the name.

Step 4: Get a Domain Name

Once you have chosen a business name, register a domain name for the entity.

Your domain name is the URL of your website that usually ends with .com.

To check whether the domain name is still available, type it in your internet browser to see if any website pops up.

Several companies called domain registrars provide domain name registration services. All you have to do is sign up, choose the name you want to register and pay the relevant fee, usually a small annual fee.

Step 5: File Your Business Formation Papers

What Are the Regulatory Requirements in Starting a Business?

To form a business, you have to file documents with the state agency responsible for business filings. You also need to pay a filing fee which depends on the state where you are filing. Once your business entity has been formed, the state will issue a certificate which confirms the existence of your business entity.

Step 6: Set Up Your Finances

File an application with the IRS for a federal tax ID number. You can use your Social Security number if your business is a sole proprietorship or single-member LLC. You also have to open a business bank account, as well as an online payment service such as PayPal.

Step 7: Understand Sales Tax and Licensing Requirements

You may need to collect and pay sales tax to the state where you are operating if you will be selling items online. Be sure to understand your tax duties to your host state. Also, ensure that you get any licenses required to operate in a state.

Step 8: Set Up a Website

The next step is to create a website for your online business. You will need to buy hosting and get someone to design the website if you lack the technical skills to do it yourself.

If you need help with how to register your online business, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. 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.