How To Register a Business in 5 Simple Steps (2025)

Not every business needs registration. However, registering your business as a legal entity offers benefits, like boosting customer confidence, making it easier to apply for funding, and in some cases, providing protection from liabilities.

If you’re in the process of starting a business or want to register an existing operation, continue reading to discover how to register your business with state and local agencies.

Ready to start your business? Create your website today or learn more about Shopify’s tools for selling online and in person.

Do you need to register your business?

Registering a business is often a simple process at both the federal and local level. However, registration isn’t always necessary. For example, if you’re a sole proprietor and plan to start selling online under your legal name, you might not need any form of registration.

Incorporated businesses, nonprofits, and those with revenue exceeding certain thresholds usually require registration. Businesses in certain industries like restaurants and wholesalers may need additional licensing. Each business scenario is unique and requirements differ by location, so reach out to local agencies for advice that’s specific to you.

Choosing not to register your business might seem easier, but you could also miss out on potential benefits like personal liability protection and tax advantages.

How to register your business

1. Pick your business name
2. Choose a business structure
3. Register with federal agencies
4. Register with state and local agencies
5. Register for taxes

1. Pick your business name

Choosing a name for your online store that is legally acceptable and matches your brand can be tricky. Start by brainstorming potential store names to develop a shortlist. If you’re stuck, Shopify’s business name generator can help spark some ideas.

Once you have a list, the next step is to check availability. Look up each name in your local business registry to ensure no other entity is operating under the same or a similar name. Also check whether your name is available online:

• Social media availability: Check if social media handles associated with your business name are available.
• Domain name availability: Use a domain name search tool to check if you can register a corresponding web address.

Selecting a business name is more than just a creative task—it lays the foundation of your brand identity, so take the time to choose wisely.

2. Choose a business structure

The structure of your business affects your legal liabilities, tax responsibilities, and how your business is registered. Here’s a quick overview of common business types:

• Sole proprietorship: The business is operated by a single owner who is liable for business debts and reports profits or losses on a personal tax return.
• Partnership: Two or more people share ownership of the business, are liable for business debts, and report profits or losses on a personal tax return.
• Corporation: An independent legal entity separate from its owners that’s responsible for debts and liabilities, with profits taxed separately from the owners’ personal income.
• Limited liability company: Limited liability protection while allowing flexibility in management and tax structure. Profits and losses are passed through to owners’ personal tax returns.

Business structures vary in registration processes. For example, sole proprietors and partnerships may not need to register, while corporations must file articles of incorporation.

Sometimes it’s clear which structure best suits your business. Other times, it’s wise to consult with trusted advisors or legal counsel.

3. Register with federal agencies

Here are the types of business registration you may need to consider at the federal level.

Employer identification number

Regardless of structure, every business should register for an employer identification number, also known as a tax ID number. An EIN is important because it keeps your Social Security number confidential and recognizes your business as an independent entity. This means your business can hire employees and build credit.

To apply for an EIN, visit the IRS website.

Financial Crimes Enforcement Network

From 2024, many US businesses must register their information with the Financial Crimes Enforcement Network. This helps identify the individuals who ultimately own or control a company. Updating your registration may be necessary if your business undergoes significant changes.

File online for free.

Trademark protection

If you have a unique business, brand, or product name and you’d like to protect it, consider filing for a trademark with the United States Patent and Trademark Office. Trademarks help customers identify your brand and protect it from use by others.

While you can establish rights through regular use, officially registering your trademark provides stronger protection. Consider registering both federally and with your state particularly if you have a unique name, logo, or slogan.

Read more details on how to file a trademark.

Non-profit status

To gain tax-exempt status for your nonprofit, you must register it as a tax-exempt entity with the IRS. This registration allows your nonprofit to avoid paying most federal taxes, which is crucial for maximizing the funds available for your nonprofit’s mission.

Visit the IRS non-profits page for more information and required forms.

4. Register with state and local agencies

Check with state and local government agencies to understand what is needed to legally register a business in your location and industry. This might include permits, licenses, articles of incorporation, and associated fees.

If your business is structured as an LLC, corporation, or nonprofit corporation, you’ll likely need to register in any state where you conduct business activities. Signs that you are conducting business in a state include:

• A physical presence (like a retail store)
• In-person activity (like client meetings)
• Significant revenue generation
• Employees who live or work in the state.

Generally, local business registration is handled through the Secretary of State’s office, a Business Bureau, or a Business Agency. Many local authorities offer online registration.

Registered agent

For some states, appointing a registered agent is necessary before filing. A registered agent is responsible for receiving and processing legal documents for your business, and must be based in the state.

Many registered agent services exist to simplify this process.

5. Register for taxes

Businesses selling products or services are required to collect sales tax, which varies by state. You’ll need to register for sales tax in each state where you have a sales presence.

Five states do not collect sales tax. They are:

• Alaska
• Delaware
• Montana
• New Hampshire
• Oregon

So, if you’re operating in these states, you won’t need to register for sales tax purposes.

For a deeper look at managing your business taxes and finances, consider reading about the basics of small business accounting.

Doing business in more than one state

When expanding your business across state lines, you’ll encounter different rules for business operations, which can include different taxes, licensing requirements, and business regulations.

This can be a particular issue for ecommerce businesses, which may regularly receive orders from customers in different states.

To stay compliant, register your business in each state where you have a presence. This could mean a physical store, revenue generated, or an employee.

Registering in multiple states might seem daunting, but it’s essential for legal protection and maintaining good standing across state lines.

Registering a trade name or DBA

In some situations, you might want to operate your business under a name that’s different from your official registration. For example, you may decide to open an online store under a different brand name that’s designed to appeal to a target market.

To do this, you can register a trade name, otherwise known as a DBA (doing business as). DBA’s are useful if you plan to branch out into new markets or want to expand your business into a new direction.

The process to register a DBA typically involves:

• Checking for name availability
• Ensuring the name doesn’t infringe on existing trademarks
• Filing required documents with your state or local government.

Tips for registering your business

Here are a few things to keep in mind as you register your business.

Get organized

Before you start filling out any application, create a list of what you need. This will include things like your personal and business information, EIN, forms, licenses, permits, and fees. Have this information handy so you can fly through the application process.

Hire help

For more complex business registration, such as in heavily regulated industries, you may want to enlist the help of an expert. Qualified tax professionals and business attorneys can guide you through the process, answering questions along the way and even taking care of some of the steps for you.

Shopify has a directory of tax professionals who can assist with US state sales tax and liability.

Go to the source

It’s always best to check directly with official bodies for the latest information regarding business registration requirements. Make it a habit to check on your licenses, permits, and registrations each year. Set up calendar reminders for expirations or renewals.

DISCLAIMER: These guides are for informational purposes only and do not constitute professional legal or tax advice. Please consult independent legal advice and your own tax adviser for information specific to your country and circumstances. Shopify is not liable to you in any way for your use or reliance on these guides.