Register Your Small Business

Find out how to register a small business

The process of registering a small business ranges from easy to difficult depending on what business entity the business wants to create.

Sole Proprietorship

The Sole Proprietorship entity is the easiest entity type to register.  All a sole proprietor has to do is start trying to make a profit.  The government and the IRS will assume the sole proprietorship is in business if the owner is acting like he or she is in business.

Partnership

The partnership is also easy to register.  Like the sole proprietorship, a partnership simply has to start trying to make a profit.  T government and the IRS will assume the partnership is in business if the owner is acting like he or she is in business.  Because a partnership, by definition, is two or more people involved in a business, it is wise to create a partnership agreement just so everything about the partnership is clear and in writing.  Having a partnership agreement avoids many conflicts.

LLC

The limited liability company, or LLC, is more difficult to register than the sole proprietorship or partnership business entities.  To register a LLC small business, the business owner needs a Federal Tax ID.  The IRS will give the business a Federal Tax ID online.  It only takes about 15 minutes to fill out the application.  Once the business has a Federal Tax ID, the business owner has to register with the secretary of state for the state where the business operates.  So, if the place of business is in Colorado, go to the Colorado Secretary of State's website. Here is a list of all fifty secretary of state websites.

The business owner will have to file a new entity form and pay a fee. For example, in Colorado, to register a LLC costs $50.

Corporation

Like the LLC, the corporation is more difficult to register.  The business owner needs a Federal Tax ID for a corporation, just like a LLC.  The business owner will also have to register with the secretary of state for the state where the business operates.  So, if the place of business is in Colorado, go to the Colorado Secretary of State's website. Here is a list of all fifty secretary of state websites.

The corporation also has to file a new entity form and pay a fee.  However, the fee is usually higher for corporations then a LLC.

These four types of business entities are not the only business entities out there, but they are the most common.  It is also good to note that a sole proprietorship and partnership can register as a corporation or LLC, but are not required to do so by law.  If you have any further questions, please seek the help of a competent lawyer.