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7 steps to legally setting up your business. www.iammichellegifford.com

7 Easy Steps to Legally Set Up Your Business

Business, Business In Real Life, Business Lessons, Organization

7 Easy Steps to Legally Set Up Your Business

This past year, because of my love for kettle corn, my husband bought me a giant, industrial kettle corn maker. It is massive and setting it up and making popcorn is an event and usually takes a few hours.  This popcorn maker makes A LOT of popcorn and so naturally, I thought that this could be a good money-making venture for my kids.  I started researching how to set up the business legally in my county.  This was good practice for me because I haven’t set up a business in a few years and I forgot how confusing it can feel.  This post is here to make it easy for you to get your business set up the right way.  Here are my 7 easy steps to legally set up your business.

If you found this blog post because you searched on Google or Pinterest, you might have seen some ads for Legal Zoom trying to get you to have them set up your business.  Please, please don’t waste money paying them to do this.  Setting up your business legally is actually easy to do.

**Disclaimer: I am not an accountant or a lawyer.  The following are my personal recommendations for setting up your business. If you want help, I do recommend hiring an accountant or lawyer.  My favorite lawyer is Brittany Ratelle.  Check her services and templates here.

 

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7 Easy Steps to Legally Set Up Your Business

Step 1: Choose Your Business Name

Think about what you want the name of your business to be. There are a few tips to keep in mind when deciding the name of your startup. Here’s a list Forbes provided to help you as you decide on one. The main thing is to make sure the name is easy to remember and one that truly identifies what you want your business to be known as. It may help to brainstorm all of your ideas of what you want your business to sell/offer and then narrow the words down into a name for your biz. However, checking out that Forbes list will help guide you a bit more as you decide on one!

 

Step 2: Secure Digital Real Estate

Securing digital real estate means purchasing a domain and then making sure the name of your business isn’t already taken by someone else online. If you’re wanting to set up a website for your new business, you can check out my post here to help get you started. I also have some website templates you can check out, so you can have one all ready to go, rather than you trying to create one from scratch.

As far as securing digital real estate in other places, you can do a quick search on different social media sites to see if your business name is already taken. Just take the business name you want to use and search it on Instagram, TikTok, Twitter, Facebook, etc. (basically any place your business could ever be online) and make sure the name is available for you to use.

 

Step 3: Create an LLC

A Limited Liability Company (or LLC) is distinguishing that your business is a different and distinct entity from the individual business owners.  This is important when it comes to liability.  Without an LLC, your personal assets are not separate from your business assets.  With an LLC, your personal and business assets stay completely separated.

To set up an LLC, you will need to:

  1. Visit your state website and get the requirements.  Simply search: how to register an LLC in _____ (add state).  It is done through the Secretary of State website in your state.
  2. Designate a registered agent. Every state requires you to have a registered agent.  This is the person who will get the documents mailed to them.  Hint: it is probably you!
  3. Get a copy of your state’s LLC Articles of organization forms.
  4. Prepare your Articles of Organization.  To file those, you will need: your business name, address of your principal place of business, the purpose of the business, the way your LLC will be managed, contact information for the registered agent, duration of the LLC.
  5. File your Articles of Organization.  To do this, fill out the Articles of Organization forms and mail them to the indicated address.  Most states also require a filing fee.  Send your check in with your form.  Once it is filed, you will receive an official letter letting you know that your LLC is active.  Make sure to keep it active every year by paying your fees.

 

the secret behind getting your business legal! www.iammichellegifford.com

 

Step 4: Register Your Biz Name

I first want to clarify that registering your biz name is different than registering your overall business. You want to register your biz name to protect it from being used by anyone else. This is especially a good way to protect your brand online. There are four ways you can register your business name. They are:

  1. Entity Name
  2. Trademark
  3. Doing Business As (DBA) Name
  4. Domain Name

You can check out the Small Business Administration here to learn more about each of these. Some registrations are legally required depending on the type of business you are in and where you are located. Just make sure your business name reflects your brand identity and does not clash with the products or services you offer. The webpage I just linked above will help you know more about each of these four ways to register your biz name.

 

Step 5: Get an EIN Number

  • What is an EIN number and why do I need it?
    • An EIN number is a 9 digit number that is unique to your business that helps the IRS identify your business.  It is like a social security number for your business.
  • Why not just use my social security number for my business?
    • Having an EIN number helps protect you and your social security number.
  • Where do I apply for an EIN number?
    • You will apply for your EIN number through the IRS.

Here are the steps for applying for your EIN straight from the IRS website:

Step 1: Determine Your Eligibility

  • You may apply for an EIN online if your principal business is located in the United States or U.S. Territories.
  • The person applying online must have a valid Taxpayer Identification Number (SSN, ITIN, EIN).
  • You are limited to one EIN per responsible party per day.
    • The “responsible party” is the person who ultimately owns or controls the entity or who exercises ultimate effective control over the entity. Unless the applicant is a government entity, the responsible party must be an individual (i.e., a natural person), not an entity.

Step 2: Understand the Online Application

  • You must complete this application in one session, as you will not be able to save and return at a later time.
  • Your session will expire after 15 minutes of inactivity, and you will need to start over.

Step 3: Submit Your Application

  • After all validations are done you will get your EIN immediately upon completion. You can then download, save, and print your EIN confirmation notice.

Apply for an EIN number here.

 

tips and tricks to legally setting up your business. www.iammichellegifford.com

 

Step 6: Set up a Bank Account for Your Biz

Setting up a bank account for your biz is a good idea because you will most likely have expenses that are tax-deductible. And if you have those types of expenses, having your own biz bank account will help keep your business money separate from any other income (and transaction). Plus, having a business bank account will give you peace of mind that if some sort of fraudulent activity did occur, it would only happen to one place instead of multiple accounts at once. But the most important reason you should set up a bank account for your biz is that it allows you to accept payments–even credit cards. Making money is the main part of your biz, so having a bank account just makes sense!

Some business owners open a business bank account at the same place they use for their personal accounts. However, it’s a good idea to do some research to see which banks offer the best rates and benefits. For more tips, you can check out the SBA website here to help you with opening up a bank account for your biz.

 

Step 7: Finish up State Requirements

Check with your state to determine if you need a state tax ID number, business permits, and/or licensing.

For extra help setting up a business in your area, I recommend going to your city’s business department and asking for help.  You can also get a lot of information on SBA.gov

With my kettle corn business, I have never had to get a cottage business license, so I had a lot of questions.  I went to my local office and they have been helping me all along the way.  They have given me free consults, email check-ins, and training.  They also have notified me of grants and other opportunities to grow.  Don’t hesitate to reach out to them.  They are literally there to help you succeed.

 

tips on legally setting up your business. www.iammichellegifford.com

 

7 Easy Steps to Legally Set Up Your Business

Alright, those are the 7 easy steps to legally set up your business! Let me know what you think or if you have any questions. You can follow me on Instagram @iammichellegifford for more small biz tips and tricks! I’m excited for you to set up your business and turn your side hustle into a legit business. Again, don’t hesitate to reach out to my girl, Brittany Ratelle if you need some lawyer help. There are so many people and resources out there to help you, so please don’t do this on your own! Once you get set up, you can always come check out my Money Makers coaching group where I give you everything you need to know to help start and grow your business.

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7 Easy Steps to Legally Set Up Your Business

7 steps to legally setting up your business. www.iammichellegifford.com

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7 Easy Steps to Legally Set Up Your Business

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