Now that you have decided on a business structure and have your EIN, it is time to register your business with the state and the IRS. Most new businesses are required to register in all states where business is being conducted. How do you know if your company is conducting business in a state? In general, you are conducting business in a state if any of the following apply:
- Your business has a physical presence there
- Any of your employees work in the state
- A significant portion of your revenue comes from the state
- You often conduct in-person meetings in the state with clients
Once you have determined the states in which you are conducting business, a registered agent is needed in each state before registering your business. A registered agent can be a business or individual who receives business, tax, and legal documents on behalf of the company.
Now that you have your registered agent in each state a separate registration will be filed with the state(s). Keep in mind, the registration procedures and processes can vary by state and business structure. Most states have an online registration process where businesses apply with the state Secretary of State’s office or a Business Bureau and pay a registration fee. The information required for submission includes your:
- Business name
- Business start date
- Business structure or legal entity type (LCC, partnership, etc.)
Foreign Qualification: Registering in states outside your home state
If you are conducting business in any state other than the state in which you incorporated and formed your business in, you will need the other state’s permission to transact business there. The process of registering and receiving approval is called foreign qualification. The steps to foreign qualification vary by state and may require you to submit additional information, including a certificate of good standing from your home state.
Great work! At this point, your company is officially recognized as ready to do business!