Choose your legal structure and register the business

Your legal structure affects your taxes, your paperwork, and whether your personal assets are protected. Picking the right one and registering properly makes your business real and official.

Do this

  1. Learn the basic options: sole proprietor, LLC, partnership, corporation.
  2. For most small businesses, an LLC balances liability protection and simplicity — but confirm with a pro.
  3. Register your business with your state and get an EIN from the IRS (free).
  4. Open the business bank account once you're registered.

Legal Structure at a Glance

SOLE PROPRIETOR — simplest, but no personal liability protection LLC — liability protection + simple taxes (popular for small biz) PARTNERSHIP — two+ owners; put terms in writing CORPORATION (S/C) — more structure; usually for raising investment

To make it official: 1. Pick a name and check it's available in your state 2. Register with your Secretary of State 3. Get a free EIN at irs.gov 4. Then open your business bank account

Free help deciding: your local SBDC or a SCORE mentor (sba.gov/sbdc, sba.gov/score).

More lessons on money

  • Define your product or service and set your prices: You need to nail exactly what you're selling, to whom, and for how much. Clear offerings and prices built on real costs are what make the…
  • Figure out your startup funding: Most businesses need some money to start — for equipment, inventory, or to cover the first lean months. Knowing how much you need and where…
  • Build simple financial projections: Financial projections are your best estimate of revenue, costs, and profit for the first year or two. They prove the business can make…
  • Get your federal and state tax IDs: Before you can hire, open a business bank account, or file taxes, you need the right ID numbers. The big one — a federal EIN — is free and…
  • Open your business bank account: Open a business bank account on day one, before the money starts moving. It keeps business and personal finances separate — which makes…
  • Get the right business insurance: The right insurance protects everything you're building from a single bad day. Some coverage is legally required (like workers' comp once…

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