How to Register a Business: EIN, Licenses & Legal Setup Explained

Starting a company can feel like navigating a maze of government forms, and the biggest question most founders have is simply how to register a business the right way. The good news: business registration in the United States follows a predictable sequence. Once you understand the handful of steps involved, you can move through them methodically and start operating with confidence. This guide walks you through choosing a legal structure, registering with your state, getting an EIN from the IRS, handling a DBA, securing licenses and permits, collecting sales tax, and staying aware of newer federal requirements like beneficial ownership reporting.

Disclaimer: Requirements vary widely by state and industry, and rules change over time. This article is general information to help you understand the landscape, not legal or tax advice. For decisions specific to your situation, consult a licensed attorney or accountant in your state.

Before you register: what "registering a business" actually means

Registering a business is not one single action. It is a bundle of related tasks that establish your company legally at the federal, state, and local levels. Depending on your structure and industry, you may complete all of them or only a few. The core steps in learning how to register a business are: pick a structure, register the entity with your state, obtain a federal tax ID (EIN), register any trade name (DBA), get the licenses and permits your work requires, and set up sales tax collection if you sell taxable goods or services.

Taken one at a time, none of these is especially difficult. The key is doing them in a sensible order so each step builds on the last. If you want to see how registration fits into the bigger launch picture, our full startup checklist maps the entire journey from idea to first customer.

How to register a business: the step-by-step walkthrough

1. Choose your business structure

   Your legal structure affects your taxes, paperwork, and personal liability, so it belongs first. The most common options for new owners are:

   • Sole proprietorship: The simplest option. No formal state filing is required to exist, but you and the business are legally the same, so your personal assets are exposed.
   • LLC (Limited Liability Company): Separates your personal assets from business debts and is popular with small owners for its flexibility. Requires a state filing.
   • Corporation (C-corp or S-corp): A more formal structure often chosen by companies seeking outside investment. More paperwork and compliance.

   Most first-time owners weigh a sole proprietorship against an LLC. For a detailed comparison, read our guide on choosing a business structure. Cost and time: deciding is free; the cost comes when you file with the state in the next step.

2. Register your entity with the state

   If you form an LLC or corporation, you register it with your state's business filing office, usually the Secretary of State. You will file formation documents (Articles of Organization for an LLC, Articles of Incorporation for a corporation), choose a unique business name, and typically name a registered agent who can receive legal mail.

   Cost and time: State filing fees generally range from about $50 to $500 depending on the state and entity type. Online filings are often approved within a few business days, though some states take one to three weeks. A sole proprietorship using your own legal name usually skips this step entirely.

3. Get an EIN from the IRS

   An EIN (Employer Identification Number) is a federal tax ID for your business, similar to a Social Security number for a company. You need one to hire employees, open a business bank account, and file certain taxes. Many single-member LLCs and sole proprietors get one anyway to avoid using their personal SSN on business paperwork.

   Cost and time: Applying directly through the IRS website is free, and you typically receive your number immediately after completing the online application. Be cautious of third-party sites that charge a fee for something the IRS provides at no cost.

4. Register a DBA (trade name) if needed

   A DBA ("doing business as," also called a fictitious or assumed name) lets you operate under a name different from your legal one. A sole proprietor named Jordan Lee who wants to be "Lee's Coffee Roasters" would file a DBA. An LLC that wants to run a second brand under its umbrella might file one too.

   Cost and time: DBA registration is handled at the state, county, or city level and usually costs between $10 and $100. Some jurisdictions also require you to publish the name in a local newspaper. If your legal and operating names are the same, you can skip this step.

5. Obtain business licenses and permits

   Licenses and permits authorize you to legally operate, and they exist at three levels:

   • Federal: Required only for federally regulated activities such as selling alcohol, firearms, agriculture, or broadcasting. Most small businesses need none.
   • State: Many states require a general business license, and regulated professions (contractors, cosmetologists, accountants, and others) need occupational licenses.
   • Local: Your city or county may require a general operating license, a zoning or home-occupation permit, or a health permit for food businesses.

   Cost and time: Fees vary enormously, from around $15 for a basic local license to several hundred dollars or more for specialized permits. Processing can be same-day or take several weeks if an inspection is involved. Check with your city, county, and state agencies to confirm exactly what applies to your industry.

6. Register for a sales tax permit

   If you sell taxable products or certain services, most states require a sales tax permit (also called a seller's permit or sales tax license) before you collect tax from customers. You register with your state's Department of Revenue or equivalent tax agency. Remote and online sellers may also owe sales tax in other states once they pass certain sales thresholds, known as economic nexus.

   Cost and time: Many states issue sales tax permits for free or a small fee, often within a few business days. This registration is separate from your EIN and your general business license.

7. Understand beneficial ownership (BOI) reporting

   Under the federal Corporate Transparency Act, many LLCs and corporations have been required to report their beneficial owners (the individuals who own or control the company) to the Financial Crimes Enforcement Network (FinCEN). This requirement has seen significant legal and policy changes, so the exact obligations and deadlines can shift.

   What to do: Because the rules around BOI reporting have changed and may continue to, confirm the current requirements directly with FinCEN or your attorney before assuming you do or do not need to file. Treat this as a compliance item to verify, not to guess about.

Tip: Before you pay any filing fee, do a quick name check. Search your state's business registry, look for a matching domain, and do a basic trademark search. Discovering your chosen name is taken after you have registered means redoing paperwork, and possibly a rebrand.

After you register: keep your business in good standing

Registration is the beginning, not the end. To stay compliant, most states require an annual report and an annual fee to keep your entity active. You will also want to open a dedicated business bank account, which keeps your finances clean and reinforces the liability protection of an LLC or corporation. Keeping business and personal money separate from day one makes tax season far easier; our guide on setting up business finances covers exactly how to do this.

A quick checklist recap

• Choose a structure (sole proprietorship, LLC, or corporation)
• Register the entity with your state, if applicable
• Get a free EIN from the IRS
• File a DBA if you use a different operating name
• Secure federal, state, and local licenses and permits
• Register for a sales tax permit if you sell taxable goods or services
• Verify current beneficial ownership (BOI) requirements
• Set up annual filings and a business bank account

The reason business registration feels overwhelming is rarely the difficulty of any single step. It is the uncertainty of knowing which steps apply to you, in your state, for your industry. That is precisely the gap Scafflow is built to close: it turns this general roadmap into a personalized, ordered checklist based on your business type and location, explaining each task and linking the right tools so nothing slips through the cracks.

Ready to register with confidence?

You do not have to piece registration together from a dozen government websites. Answer a few questions about your business and get a clear, step-by-step plan tailored to your structure, state, and industry. Build your personalized registration checklist and take the first step today.