Starting a business can be an exciting and overwhelming process. One of the first steps in setting up a business is to reserve the business name. Reserving a business name is an essential step in the incorporation process and will guarantee that your business name is protected and secure. Depending on the state, there may be different ways to secure a business name. The following guide will help to explain the process of reserving a business name.
Checking the Availability of the Business Name
The first step in reserving a business name is to check the availability of the name. Many states have a business name database that can be used to search for available business names. It is important to research if the desired business name is already taken or if it is available for use. A business name must be distinguishable from other businesses to be registered. The name must also not be too similar to existing business names or trademarks. Checking the availability of the business name is a critical step in the process of reserving a business name.
Selecting the Business Structure
The next step in reserving a business name is to select the desired business structure. It is important to understand the different types of business structures and the associated legal responsibilities. The most common types of business structures are sole proprietorships, limited liability companies (LLC), corporations, and partnerships. Each type of business has its own advantages and disadvantages. It is important to consider the type of business structure that best fits the needs of the business.
Filing a Business Name Reservation Form
Once the desired business name has been checked for availability and the desired business structure has been selected, the next step is to file a business name reservation form. This form can typically be found on the website of the Secretary of State’s office. The form will require information such as the proposed business name, the desired business structure, and contact information. After the form is filled out and submitted, the business name will be reserved. Depending on the state, this reservation may be valid for one year or indefinitely.
Renewing the Business Name Reservation
In some states, the business name reservation must be renewed after a certain period of time. This renewal period can vary depending on the state. It is important to understand the renewal requirements of the state in order to ensure that the business name is kept in good standing. If the business name reservation is not renewed, the business name may become available to other businesses and the process of reserving a business name will have to be repeated.
Filing the Business License Application
The next step in reserving a business name is to file the business license application. This application will require information such as the business name, the desired business structure, contact information, and other pertinent information. Depending on the state and type of business, additional documents or permits may be required. It is important to understand the requirements of the state in order to ensure that all required documents and permits are obtained.
Registering the Business with the IRS
Another important step in reserving a business name is to register the business with the Internal Revenue Service (IRS). This will allow the business to obtain an Employer Identification Number (EIN). The EIN is required for filing taxes, opening a business bank account, and applying for business loans. The process of registering with the IRS is relatively simple and can typically be completed online.
Filing the Assumed Name Certificate
Depending on the state, a business may be required to file an Assumed Name Certificate. This certificate is also known as a “doing business as” (DBA) certificate. This certificate will allow the business to conduct business under a name that is different from the official registered name. This can be useful if the business wants to use a name that is more recognizable or appealing to customers.
Obtaining the Business License
Once all of the above steps have been completed, the business can obtain the license. This license will allow the business to legally operate in the state. Depending on the state, there may be additional requirements for obtaining a business license. It is important to understand the requirements of the state in order to ensure that all necessary documents and permits are obtained.
Conclusion
Reserving a business name is an important step in the process of setting up a business. It is important to understand the process of reserving a business name and the associated requirements. Checking the availability of the business name, selecting the desired business structure, filing a business name reservation form, renewing the reservation form, filing the business license application, registering with the IRS, and filing the assumed name certificate are all steps that must be taken when reserving a business name. Following these steps will ensure that the business name is protected and secure.