To register a startup company, you file formation documents with your state’s Secretary of State, then layer on the federal and local registrations that let you actually operate: an EIN from the IRS, state tax accounts, and any local licenses your city or county requires. The core state filing takes a few days in most states and costs anywhere from under $50 to over $500 depending on where you file and what entity you form. The order of the steps matters more than most founders realize, because each one depends on choices made in the step before it.
Pick a Business Structure First
Before you file anything, decide what kind of entity you want to create. The choice drives your personal liability, your tax treatment, and the paperwork you’ll live with for the life of the business. Three options cover most startups.
Limited Liability Company
The LLC is the most popular choice for small startups. It creates a legal entity separate from its owners, called members, which generally shields personal assets from business debts. The Revised Uniform Limited Liability Company Act, adopted in some form by a majority of states, establishes this separation and lets owners run the company themselves or appoint managers. The IRS doesn’t tax LLCs directly: by default, a single-member LLC is taxed like a sole proprietorship, and a multi-member LLC is taxed like a partnership, with profits flowing through to the owners’ personal returns.
Corporation
Corporations are more rigid. They require a board of directors, corporate officers, annual shareholder meetings, and formal minutes. Ownership is represented by shares of stock, which makes it easier to bring in investors or transfer ownership. That structure is why most venture-backed startups incorporate; investors expect it. The downside is double taxation: the corporation pays income tax on its profits, and shareholders pay tax again on dividends.
S-Corporation Election
An S-corporation isn’t a separate entity type. It’s a tax status that eligible corporations and some LLCs can elect to avoid double taxation, with profits and losses passing through to shareholders’ personal returns. The rules are strict: the business must be a domestic corporation with no more than 100 shareholders, all U.S. citizens or residents, and only one class of stock is allowed (though voting rights can differ).
To elect S-corp status, you file IRS Form 2553. Timing matters. For the election to take effect in the company’s first tax year, Form 2553 must be filed no later than two months and 15 days after that tax year begins. Miss the deadline and the election doesn’t kick in until the following year.
Licensed Professionals
If you’re a doctor, lawyer, accountant, architect, engineer, or member of another licensed profession, your state may require you to form a professional corporation (PC) or professional LLC (PLLC) instead of a standard entity. The common thread is that all owners, and often key employees, must hold the relevant professional license. Confirm your state’s rule before you file, because forming the wrong entity type can mean starting over.
Clear and Reserve Your Business Name
Every state requires your business name to be distinguishable from entities already on file. Search your Secretary of State’s online database first; it’s free and takes a few minutes, and it saves you from a rejected filing. If your preferred name is taken or too similar to an existing one, pick something else.
Most states also require your entity name to include a designator like “LLC,” “Inc.,” or “Corp.” so the public knows what type of business they’re dealing with. If you want to operate under a different brand name, register a “Doing Business As” (DBA) name, sometimes called a fictitious name or trade name. DBA filings are typically handled at the county level, though some states process them at the state level. Fees generally run between $10 and $150, and some jurisdictions require you to publish a notice in a local newspaper.
Appoint a Registered Agent
Every business entity needs a registered agent: a person or company designated to receive legal papers and official government correspondence on the business’s behalf. The agent must have a physical street address (not a P.O. box) in the state where you’re registering and must be available during normal business hours.
You can serve as your own registered agent. Many founders instead hire a commercial service, typically $50 to $300 per year, especially if they work from home or travel. The important thing is that someone is consistently at that address to accept service of process. If a lawsuit is filed against your company and the agent isn’t there to receive it, you could end up with a default judgment against you.
File Your Formation Documents With the State
The paperwork that actually creates your business is shorter than most people expect. For an LLC, the document is usually called Articles of Organization or a Certificate of Formation. For a corporation, it’s the Articles of Incorporation, sometimes called a Certificate of Incorporation or a Charter. Both are available on your Secretary of State’s website.
The forms typically ask for:
- The exact entity name you confirmed as available.
- The name and physical address of your registered agent.
- A principal office address, where the company’s primary management activities occur (virtual businesses still need a physical address on file).
- The organizer or incorporator — the person signing and submitting the documents.
- Duration, almost always listed as “perpetual,” meaning the company exists until formally dissolved.
- For corporations, the total number of authorized shares.
Most states offer online filing, which is faster and sometimes cheaper than paper. Filing fees range from under $50 to over $500, and expedited processing is available in most states for an extra fee. Check every field before submitting. Errors lead to rejections or corrective filings with their own fees, and fixes can add weeks.
Once the state processes your filing, you’ll receive a stamped or certified copy of your formation document, sometimes called a certificate of existence or certificate of good standing. That’s your proof that the entity legally exists.
Get an EIN From the IRS
Your next step is a federal Employer Identification Number. This nine-digit number is the business equivalent of a Social Security number, and you’ll need it for tax filings, opening a bank account, and hiring employees. The IRS recommends applying online, which is free and generates your EIN immediately upon approval.
If you can’t apply online (for example, if the business’s principal location is outside the U.S.), submit Form SS-4 by fax or mail. Fax applications typically return an EIN within four business days; mail applications take about four weeks.
Put Internal Governing Documents in Place
Formation documents get your business recognized by the state. Internal governing documents keep it running. These aren’t filed with the government. They’re private agreements among the owners.
For an LLC, that document is the operating agreement. It covers how profits and losses are split, how decisions get made, what happens when a member wants to leave, and how new members can join. Even single-member LLCs should have one, because without it, your state’s default LLC rules apply, and those defaults may not match what you want. Banks and investors routinely ask to see the operating agreement before doing business with an LLC.
For a corporation, the equivalent is the bylaws. Bylaws establish how board and shareholder meetings are conducted, define officer roles (president, secretary, treasurer), set quorum requirements, and lay out procedures for amendment. The board typically adopts the initial bylaws at the first organizational meeting after incorporation.
Draft either document before the company starts doing business. When disputes arise later, these documents provide the framework for resolution.
Register for State and Local Taxes
State registration creates your legal entity, but it doesn’t automatically register you for state taxes. Those are separate filings, and skipping them is one of the most common mistakes new founders make.
Sales Tax Permit
If your startup sells taxable goods or services, you’ll likely need a sales tax permit (sometimes called a seller’s permit or sales tax license) from your state’s department of revenue. The permit itself is usually free, but you’ll be responsible for collecting tax from customers and remitting it on a regular schedule. Even an entirely online business may owe sales tax in states where its sales volume or physical presence triggers what’s called “economic nexus.”
Employer Tax Accounts
Once you hire your first employee, another set of obligations kicks in. Register with your state for unemployment insurance (often called SUTA) and state income tax withholding. The obligation generally begins as soon as you start paying wages. Federal law also requires you to report new hires to your state’s new hire reporting agency within 20 days, and some states set shorter deadlines.
Franchise and Privilege Taxes
A number of states charge a franchise tax or privilege tax just for the right to exist as a business entity, separate from income tax and owed regardless of whether the business turns a profit. California, for example, charges most LLCs and corporations an $800 minimum annual franchise tax. Delaware corporations pay a minimum of $175 per year. These taxes catch founders off guard because they come due even in years when the company earns nothing.
Get Local Licenses and Permits
Beyond state-level registration, most businesses need at least one local license or permit from the city or county where they operate. Common requirements include a general business license or business tax certificate, zoning permits confirming your business type is allowed at your address, health permits for anything involving food, and building permits for commercial renovations. Your city or county clerk’s office can tell you exactly what’s required. Fees are usually modest, but operating without the proper permits can result in fines or a shutdown order.
Open a Business Bank Account
With your formation documents and EIN in hand, open a dedicated business bank account. Banks will ask for your certified articles of organization or incorporation, your EIN confirmation, and your operating agreement or bylaws. Some banks also require a corporate resolution authorizing the account.
Keeping business and personal finances separate isn’t optional if you want your liability protection to hold up. Courts can “pierce the corporate veil” and hold owners personally liable when the entity looks like a sham, and mixing funds is one of the fastest ways to get there.
Register in Other States Where You Operate
If your startup does business in a state other than where it was formed, you may need to “foreign qualify” there by filing for a certificate of authority. Triggers vary, but having employees in another state, renting office space, or routinely accepting orders or contracts in that state will generally require it. The filing process is similar to your original formation: an application, a registered agent in the new state, and a filing fee.
The consequences of skipping this step are real. Every state bars unqualified foreign entities from filing lawsuits in its courts until they register, and most states also impose monetary penalties that accumulate the longer you operate without authorization. Foreign qualification doesn’t create a new entity. Your company stays the same, but you’ll owe additional annual reports and fees in each state where you register.
Stay Current After Formation
Registration isn’t a one-time event. Most states require LLCs and corporations to file an annual or biennial report, a short update confirming the company’s address, registered agent, and officers or managers. Filing fees range from $0 to several hundred dollars depending on the state. Some states bundle their franchise tax payment with the annual report.
Missing these filings has consequences that escalate quickly. First you lose “good standing,” which can block loans, contracts, and qualification in other states. If the delinquency continues, often two to three years of missed filings, the state can administratively dissolve your entity. A dissolved company can’t enforce contracts or file lawsuits, and the owners may lose their personal liability protection during the gap. Reinstatement is possible in most states, but it means filing all overdue reports, paying back fees and penalties, and sometimes dealing with the fact that another business has taken your name in the meantime.
Keep your registered agent information current, maintain your internal records (meeting minutes, resolutions, financial statements), and track any state-specific requirements like publishing notices. The filings that created your business are the starting line. The ongoing maintenance is what keeps it alive.