Incorporation is the key to safely starting a new business in the US, providing you with the asset protection and stability you need. Without following all the steps of setting up a business, your mistakes can be held against you in case you get sued. In order to get a successful start to your new business, you will need to plan ahead and learn the requirements and options available for starting a new business in the US.
The following checklist is a guide you can use to plan your new business venture. It is not legal or accounting advice, so it should only be used to guide you in your discussions with your lawyer and accountant.
Business Entity Start-up Checklist
- Start with a business plan: what you will do, where you will do it, who will do it for you and how it will make money to cover the costs and make you money.
- Are you a foreign national looking to start a US business? See “Setting Up a US Business as a Non-US Resident”
- Choose the type of business entity that you want for your new business.
- Determine who will own the company, and who will invest how much, and what they expect to get in return
- Determine who will manage the company: for corporations, pick the officers and directors; for limited liability companies (LLCs) pick the Managers or Members
- Choose a state of incorporation
- Choose a name for your company and choose a corporate indicator. Check to see if the name is available.
- File the incorporation papers
- Hold the organizational meeting and adopt the bylaws (for corporations); adopt the operating agreement (for LLCs)
- Obtain a federal tax number (Employer Identification Number). Your company will likely be filing returns and reports to the Federal and/or State government, and must have its own identification number.
- Open a bank account. You must never mix business and personal money, unless you enjoy IRS audits or having your company called a sham.
- Obtain any further financing
- Get a location to work from, lease an office
Every state requires a registered agent to represent the company within that state if the company is incorporated or authorized to do business there.