Thread: Checklist for Forming a New Business

Checklist for Forming a New Business

From Mark Minassian,
Your Guide to Business Law / Taxes: U.S.

Owning your own business can be one of the most rewarding accomplishments of your life. And while the prospect of starting your business is exciting, it may also be overwhelming. By staying focused and having a good map to guide you through the process, you will be able to get your business moving in the right direction.

This checklist presents the general steps of forming a business. Each item is explored in much greater detail on this site.

1. Research your business name.

You may have a great idea for the name of your business, but you must find out if it is already in use. You can perform an online name search through your Secretary of State office and you can check with your town or county for business names in use at the local level.

2. Write a business plan.

If you are planning on soliciting outside investors or even getting a bank loan, a business plan is a must. Even if you plan to use all of your own money, a solid business plan will help you see all of the aspects involved in running your business. Many people have great ideas for new businesses, but the truly successful entrepreneurs

pay attention to the details. Writing a business plan will help you see those details.

3. Choose the type of organizational structure of your business.

The general types of business entities are sole proprietorships, corporations, partnerships and limited liability companies. Choosing the correct organizational structure for your business is vital because it will dictate how your business will be operated and taxed.

4. File the legal paperwork with the state(s) you will be conducting business in.

Business entities exist under state and local law, not federal law. The type of entity you choose to operate will determine the paperwork that needs to be filed.

5. Obtain an employer identification number from the IRS.

Your new business will need to obtain an employer identification number (EIN). This number will be used by both the IRS and state agencies to identify your business.

1a) If you plan to have a website for your business check domain name availability as well.

3a) If you are an S Corp, file form 2553 Election by a Small Business Corporation (just did it on Wednesday)