Congrats! You’ve decided to take the next big step in entrepreneurship and start making your business a legal enterprise. Many small business owners have the need to register with their Secretary of State. Are you one of them?
Determining Your Requirements
Not everyone is required to go through the process. In fact, if you are a sole proprietor or spousal partnership operating under your own name, you may choose not to do this at all. There are times as an individual when it makes sense, however. If you have a name that you want to secure as your own for legal purposes, it’s a wise idea to go through the process; a simple search through your state database should tell you if anyone else already has the name you are looking to secure, or if there are established business names similar enough to cause confusion.
It’s also important to note that, depending on your state’s tax system, you may be required to register your business as a part of collecting and paying sales tax. Certain states will also need this done before you hire employees or withhold employee wage taxes. The process of registering your business may include the option for creating a EIN (employee identification number). This is a useful tool even for individuals and sole proprietors who wish to provide this number instead of their Social Security number on tax forms.
Businesses That Must Register
Generally speaking, all corporations, limited liability companies and limited liability partnerships need to register with their state. If you secure the help of a lawyer or legal forms company to set up the legal structure of your business, this step should be included. It is always a good idea, however, to give your state office a call and see if there are special steps for your jurisdiction that may be out of the norm. While a lawyer in your state should be well-versed on the rules, it’s ultimately your responsibility to have everything completed.
There are some states, counties, and municipalities that may also have regulations regarding who can do business in their jurisdiction. They may require a specific business license or permit for everything from hair services to computer repair, and often a state business registration can provide the documentation needed for application — or even hasten the processing of the permit.
Steps for Registration
The very first thing that is recommended for any business to do is contact their state office. A quick Google search for your state name and “Secretary of State” should give you the right link. (Be sure you are looking at a site that ends in “.gov” and not an advertised listing or for-profit site.) Your state’s site should have the relevant info for you in their FAQ’s or a special business owner’s section of the website.
If it’s not easy to find, or you are not confident that the data is the most updated, you should give their office a call. (Recent regulations in your state may have changed registration requirements. A live agent will be aware of any discrepancies on the website.) If the entire process can be completed online, be prepared to provide the following information:
- Your business name (or desired name, if not previously registered)
- Person responsible for business (owner, partner, or point of contact)
- Business start date
- Business type
- Legal entity type (S-corp, LLC, partnership, etc.)
- Basic contact details
Some states will also allow you to create a state tax number, or require one that has already been created. Many states provide the registration free of charge and will give you confirmation of your application submission immediately. For states that do charge an application or business filing fee, you may have the option to pay online with a checking account, credit or debit card. Others may ask that you mail in payment with a printed invoice.
Finally, if you are having issues with the online system (which is not unheard of for government websites), wish to have assistance with the forms, or would rather leave a paper trail of your application, most states let you download and print the forms for mailing. The state office should also have copies of the forms that you can request from staff.
Registering Out of State
For most businesses, you’ll only need to register in the state in which you work and operate. In select instances, however, you will need to register in more than one state. If any of the following apply to you, make sure you contact that state to see if you will also need to register there. (This is also known as a “foreign qualification”):
- You physically operate a store, franchise, office, warehouse, or manufacturing facility in the state.
- You often meet with clients in the state.
- You employ workers in the state.
- You pay employee payroll tax to the state.
- You generate a significant amount or revenue in the state.
- You had the need to license a business in the state.
For the most part, simply selling a portion of your goods or services to customer in a state doesn’t mean you must register there. Online stores, for example, may pay state sales taxes without having to be a registered business for that state.
What to Expect After Filing
Depending on your state, you will be notified of the receipt of your application immediately, or within a couple of weeks. Some states notify you when you apply, have very little follow-up, and almost absolute approval. Others may contact you for additional information, depending on what they need to qualify a business.
If there’s any consistency across the board for each state, it’s that regulations can change at any time, and that state compliance doesn’t guarantee city or local compliance. While each state office can try to give you a blanket assurance of your ability to begin business operations, you should also get in contact with local business regulators to make sure you’ve followed every step needed to make your business legal. You don’t want to be hit with fines or be forced to cease operation before you really get started.
This article was originally written on September 29, 2017 and updated on July 18, 2022.