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Registering your concern with the federal government has its perks, regardless of whether y'all're required to do so. — Getty Images/alexsl

Starting a concern is no easy feat, peculiarly when it comes to the administrative and legal processes similar trademarking your business name, choosing the correct structure, and registering your business concern.

Depending on the nature of your business organisation, y'all may need to register with your country government, the federal government, or you may not need to register at all. If yous're unsure whether you need to register your business concern on the federal level, here'south what you need to know.

Do I need to register my business with the federal government?

The following lists a few of the well-nigh common factors that determine whether you must federally annals your business:

  • Business concern structure. There are many types of concern structures, like sole proprietorships, corporations, LLCs and partnerships. While sole proprietors doing business under their own legal names are not required to annals with the federal government, most other structures, including partnerships and corporations, are. Additionally, if you desire to do good from revenue enhancement exemption as a nonprofit or charity organization, y'all'll have to separately register with the IRS as a tax-exempt entity.
  • Staffing. If you currently have employees or plan to rent employees in the future, y'all'll need an EIN to operate your concern. According to the IRS, an EIN will let you to "pay federal taxes, hire employees, open a bank account, and apply for concern licenses and permits" — all crucial concern processes.
  • Required business taxes. An EIN is required for any business that plans on filing Employment, Excise, or Alcohol, Tobacco and Firearms taxes.
  • Sure organizational involvement. Almost businesses that piece of work with, or are otherwise associated with, trusts, estates, real manor mortgage investment conduits, nonprofit organizations, farmers' cooperatives and plan administrators need an EIN.
  • Other. The IRS cites a few other reasons why a business would demand an EIN, including whether you lot withhold income taxes for a non-resident conflicting, or have a Keogh plan.

Even if you aren't legally obligated to register with the federal government, there are some good reasons to consider doing it anyway. If your concern wants to file for trademark protection, you can register with the United States Patent and Trademark office and protect yourself and your product on a federal level. Yous also need to be a federally recognized entity if you e'er want to use for authorities contracts.

[Read: A Footstep past Stride Guide to Starting Your Business organization.]

Fifty-fifty if you lot aren't legally obligated to register with the federal government, in that location are some good reasons to consider doing it anyway.

How to federally annals your business

If you've decided to register your business on a federal level, the process of doing so is relatively elementary. For most businesses, this simply means applying for a federal tax ID, also known as an employer identification number (EIN).

Your EIN is a nine-digit number that identifies your business'southward taxation accounts with the federal regime. The IRS allows y'all to apply for an EIN costless of charge through several different channels, including online, by mail, by fax or by phone. The person or "responsible party" applying must have a valid taxpayer identification number, such as a Social Security number or another EIN.

Once you have an EIN, you can also register to pay your federal business taxes online through the government's Electronic Filing and Taxation Payment System.

In addition to an EIN, you tin can also employ for a DUNS number. Like your EIN, your DUNS number identifies your concern similar a Social Security number identifies a person. Having i can assist yous establish credit for your business, then you can secure deals with creditors and suppliers. To obtain a DUNS number, visit the Dun & Bradstreet website. This procedure might take up to 30 days.

CO— aims to bring you inspiration from leading respected experts. Nonetheless, before making any business organization decision, you should consult a professional who tin propose you based on your private state of affairs.

To stay on tiptop of all the news impacting your modest business, go here for all of our latest small concern news and updates.

CO—is committed to helping y'all commencement, run and grow your small business organisation. Learn more about the benefits of small business membership in the U.S. Bedchamber of Commerce, hither.

Published May 09, 2019