Steps to Registering a Company in the U.S.: All You Need to Know

Starting a business in the United States offers strong opportunities, but the process requires a clear understanding of legal, tax, and regulatory requirements. From selecting the right business structure to completing registration and maintaining compliance, each step plays a critical role in building a stable foundation.

This guide outlines the key steps to register a company in the U.S., helping entrepreneurs navigate the process with clarity and confidence.

Step 1: Choose an entity type

Before starting operations, your business must be established under a legal structure. This step defines how your company operates, how it is taxed, and the level of protection you receive as an owner.

In the United States, the most common business structures include:

• Limited Liability Company (LLC)
• Corporation
• Partnership
• Sole proprietorship

While all of these structures allow you to run a business legally, they do not function the same way. Some prioritize simplicity and ease of setup, while others provide stronger liability protection and better scalability. Therefore, choosing the right structure depends on your long-term goals, risk exposure, and operational needs.

Limited Liability Company (LLC)

Among the available options, the LLC is often the preferred choice for small and growing businesses.

It combines flexibility with protection by creating a separate legal entity, which means owners are not personally liable for the company’s debts or legal obligations. As a result, personal assets remain protected in the event of financial difficulties or legal disputes.

In addition, LLCs are typically taxed on a pass-through basis, allowing profits to be reported directly on the owners’ personal tax returns. This simplifies taxation while avoiding double taxation in most cases.

Furthermore, LLCs allow a degree of operational flexibility. Business owners may structure certain transactions between themselves and the company, provided they comply with applicable tax regulations.

However, formation costs and requirements vary by state, so selecting the right jurisdiction among the best states to form your LLC is an important consideration.

Corporation (S Corp and C Corp)

While LLCs are known for flexibility, corporations are often chosen for their scalability and investment potential.

Like LLCs, corporations provide strong liability protection. However, they differ in ownership structure and taxation.

• C Corporations are taxed at the corporate level with greater flexibility in raising capital. They allow unlimited shareholders and multiple classes of stock, making them suitable for businesses planning to expand or attract investors.
• S Corporation, on the other hand, function as a tax election rather than a separate entity type. They allow profits to pass through to shareholders’ personal tax returns. That said, they must meet specific eligibility requirements, including limits on shareholders and ownership structure. In some cases, eligible owners may also benefit from a deduction of up to 20% on qualified business income under the Tax Cuts and Jobs Act, subject to specific limitations.

Partnership and sole proprietorship

For entrepreneurs seeking simplicity, sole proprietorships and partnerships may appear attractive.

These structures are easy to establish and involve fewer administrative requirements. However, unlike LLCs and corporations, they do not create a separate legal entity. Consequently, owners remain personally liable for all debts and obligations.

Although they can work well for small-scale or low-risk activities, they may not be suitable for businesses planning to expand or operate in higher-risk industries.

Step 2: Pick a business name

Choosing a business name is one of the more creative steps in the registration process. While it does not need to be overly complex, a strong name should be memorable and aligned with your brand.

At the same time, naming a company is subject to legal requirements. Therefore, before submitting your application, it is important to review the relevant rules to avoid delays or rejection.

There are several key considerations:

• Availability: First, confirm that your desired name is not already in use. This can be done by searching your state’s business registry or checking with the appropriate authority. In addition, reviewing trademark databases helps prevent potential legal conflicts.
• Legal requirements: Company names must comply with state regulations. In most cases, this includes indicating the entity type (such as LLC or Inc.) and avoiding restricted or misleading terms.
• Use of alternative names (DBA): If you plan to operate under a different name from your registered company name, you must file a “Doing Business As” (DBA) with the relevant authority. Alternatively, if you intend to fully change your company name, a formal amendment must be submitted.

Step 3: Get your business licensed and registered

Once you have selected your entity type and finalized your company name, the next step is to formally register your business with the appropriate state authority. In the United States, this typically means filing documents with the Secretary of State in your chosen state of incorporation.

For LLCs and corporations, the process generally includes:

• Filing formation documents (Articles of Organization for LLCs or Articles of Incorporation for corporations)
• Drafting the bylaws specifying the duties and responsibilities of each member (e.g., Delaware Corporation Bylaws)
• Appointing a registered agent to receive legal documents on behalf of the company
• Paying the required state filing fees

In addition, corporations must establish internal governance structures, such as appointing directors and adopting bylaws, while LLCs may prepare an operating agreement to define ownership and management roles.

A registered agent is mandatory in every state. This can be an individual over 18 with a physical address in the state or a professional service provider. For many businesses, especially non-residents or multi-state operators, using a professional registered agent like BBCIncorp helps ensure compliance and timely handling of legal notices.

If your business operates outside its state of incorporation, you may also need to complete foreign qualification in other states, so your company can legally conduct business across state lines.

Given the variations in state regulations and compliance requirements, many entrepreneurs choose to work with a company formation service provider.

Step 4: Apply for Federal Tax Identification

In the U.S., a business must pay taxes where it has a tax nexus, meaning a sufficient presence such as a physical location, employees, or significant economic activity in a state. This determines which state and local taxes apply to your operations.

Depending on your activities, your business may be subject to:

• State income or franchise tax
• Sales and use tax
• Employment taxes
• Local taxes

To begin, most businesses need to obtain an Employer Identification Number (EIN) from the Internal Revenue Service. This 9-digit number identifies your business for federal tax purposes.

An EIN is required to:

• File federal taxes
• Open a business bank account
• Hire employees
• Apply for licenses and permits

In most cases, an EIN can be obtained without a Social Security Number if the applicant follows the appropriate IRS process for foreign owners.

Additionally, businesses may consider:

• DUNS number: Used for credit profiles and government contracting
• NAICS code: Classifies your business activity for regulatory and statistical purposes. More can be found on small business size standards here.

Although these are not always mandatory, they can support access to financing, reporting, and federal opportunities.

Step 5: Open a business bank account

After completing registration and obtaining your EIN, the next step is to open a business bank account. This helps separate personal and business finances, improving transparency and financial management.

In general, the process is straightforward. Banks will require supporting documents such as:

• Identification documents of owners or authorized signatories
• Formation documents (e.g., Articles of Incorporation or Organization)
• EIN (Employer Identification Number)
• Proof of business address

In addition, under the Bank Secrecy Act, banks must collect beneficial ownership information as part of customer due diligence requirements.

For non-resident applicants, the process can be more complex. Many U.S. banks require at least one authorized signatory to be physically present to complete verification procedures.

Alternatively, businesses may consider working with banking partners or service providers to open an offshore bank account. Digital financial platforms such as Wise or Stripe can also serve as practical solutions, especially for international entrepreneurs.

Post-incorporation key points

Registering your business is only the beginning. Once incorporated, the focus shifts to maintaining compliance, protecting your assets, and ensuring smooth operations.

Below are several key areas to address:

Trademark protection registration

Securing your brand early helps prevent legal disputes as your business grows. Many entrepreneurs delay trademark registration, which can expose them to infringement risks.

To protect your business name, conduct a trademark search and, if available, register it with the United States Patent and Trademark Office. This provides legal protection and strengthens your brand identity.

Hiring and paying employees

If you plan to hire employees, you must comply with federal and state employment regulations. This includes:

• Using your EIN issued by the Internal Revenue Service
• Withholding federal income tax, Social Security, and Medicare taxes
• Setting up a payroll system to report and remit taxes

In addition, employers must follow labor laws related to wages, benefits, and workplace standards.

Annual tax filing and renewal of licensure

After incorporation, your business must meet ongoing filing and reporting requirements. These may include:

• Federal and state tax filings
• Annual reports or renewals, depending on the state
• Business license renewals, if applicable

Applicable international rules

For businesses planning to expand offshore, it is important to understand the legal frameworks of each jurisdiction.

One key distinction lies between common law and civil law systems. The United States and the United Kingdom follow common law, which relies on case precedents. In contrast, most of continental Europe follows civil law, which is based on codified statutes. Some jurisdictions apply a hybrid approach that combines elements of both systems.

By becoming familiar with the legal environment of each market, businesses can reduce risk and operate more effectively across borders.

Regardless of where you establish your business, understanding the local legal framework is essential. To gain a clearer view of corporate compliance across over 18 jurisdictions, you can also explore our Compliance Tool.

Conclusion

Setting up a business in the United States involves several key steps, from choosing a suitable structure to completing registration and securing an EIN. This number plays a vital role in handling taxes, opening bank accounts, and managing employees.

More importantly, a successful setup depends on preparation and a clear understanding of legal requirements. By addressing regulatory matters early, businesses can avoid common pitfalls and operate with greater certainty.

If you prefer a more efficient route, don’t hesitate to leverage our company formation service for an even faster incorporation experience.

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