Step 2: Registration and Creation of Your Business

Registering your business with the state.

For your business to be considered a “real” business, you need to have it established as an entity and registered with the state.

The name of your entity does not necessarily have to be what the name of your company will be. You can always file with a “DBA” or “Doing Business As”, if you are entering into a franchise or if this one company will just be part of a larger organization. The rules for naming and ensuring no one else is using the name still apply with a DBA.

There are many ways to form your business, each having their own Pros and Cons.

Type of Business	PROS	CONS
Sole Proprietorship	*Only required to file one tax return (personal)	No liability protection Required to pay employment tax (15.3%)
Limited Liability Company (LLC)	Liability protection Flexible Tax Filing to best suit your needs	*Very few downsides for the detailing profession
Limited Liability Partnership (LLP)	*Almost no positives for the detailing profession	No liability protection Also liable for the actions and debts of partners
S-Corporation	*Pass through taxation	*Closer IRS scrutiny
C-Corporation	*High degree of liability protection	High corporate tax rate Double taxation on income

For more information on how to register your business with the state you are in, please find your state in the dropdown below, and visit their site.

**This is for information purposes only, and is not financial or legal advice. Please consult with a lawyer or accountant about your individual needs.

Register with the Federal Government and the IRS.

A Federal Employer Identification Number (EIN) or Tax ID number is essentially a Social Security Number for your business. It is how you will be asked to identify yourself as a business for banking, credit, or tax purposes.

Applying for an EIN is very easy and free on the IRS website. DO NOT pay another site for this service, it is simple, free, and can be done in minutes online.

Having an EIN is a requirement if your business is set up in any of the following ways; LLC, LLP, S-Corp, or C-Corp.

If you are set up as a Sole Proprietorship, it is not required because all income you collect goes onto your personal tax return, and does not require a separate filing with the IRS. But, if you want to open a Business Banking account with your local bank, they will require an EIN to establish that account. Also, if you have, or plan to have, employees other than yourself, you will need to apply for one. It will be required for payroll purposes.

Once you have registered with the State and Federal Government, you are established as far as they are concerned. You will be required to maintain those registrations every year, and stay in good standing by paying your taxes, but you are now officially a business.

This is for information purposes only, and is not financial or legal advice. Please consult with a lawyer or accountant about your individual needs.

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Registering your business with the state.

Register with the Federal Government and the IRS.

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