When it comes to registering your business with the relevant authorities, starting a business may be both an exciting and challenging experience. Whether a business can be registered prior to opening for business is among the queries that entrepreneurs frequently have. Yes, you should register your firm before you begin trade in order to avoid legal problems and safeguard your personal assets.
Before you start trading, you should register your company with the state or the federal government to establish it as a legal entity. Choosing a company form, such as a sole proprietorship, LLC, or corporation, and acquiring the required licenses and permissions to operate legally are also steps in this process. By doing this, you can enjoy a number of tax advantages and legal safeguards as well as insulate your personal assets from company responsibilities.
The two most popular alternatives when picking a business structure are a sole proprietorship and an LLC. The simplest and least expensive business structure is a sole proprietorship because it doesn’t need to be formally registered with the state or the federal government. It also implies that you will be held personally responsible for any debts or legal problems that may result from your company’s operations. An LLC, on the other hand, separates your business and personal money and offers a higher level of asset protection, but it comes with additional paperwork and setup costs.
The Internal Revenue Service (IRS) must provide you an Employer Identification Number (EIN) if you want to register your company as a sole proprietorship or LLC. To register a business bank account, hire staff members, and file taxes, you must have an EIN, a special nine-digit number that serves as your company’s tax identification number. The IRS website allows you to submit an online application for a free EIN in Ohio.
Using a DBA, or “doing business as” name, is one typical method of conducting business. A DBA is a legal designation that enables you to conduct business using a name other than your registered business name. If your official business name is “John Smith LLC,” for instance, you can conduct business under a DBA name like “Smith Consulting.” However, utilizing a DBA has significant drawbacks, including the absence of personal liability insurance and the need to register your DBA with the state or county in which you conduct business.
To protect your personal assets and conduct business lawfully, it is not only possible but also very advisable to register your firm before beginning operations. Important steps in the process include selecting a business structure, acquiring the required licenses and permissions, and obtaining an EIN. While adopting a DBA name may make running your business simpler, there are some drawbacks as well. You may prepare your company for success and stay out of trouble with the law by taking the time to register it correctly.
The term “doing business as” (DBA) is also referred to as a trade name, assumed name, or false name. As an illustration of a DBA, consider the case of John Smith, a sole proprietor, who wants to operate his firm under the name “Smith’s Consulting Services” rather than just “John Smith.” John Smith would in this situation need to register his DBA with the relevant government body.
In Ohio, a trade name is the name used to conduct business, but a fictitious name is a different name that the company uses for marketing or other purposes. The terms “DBAs” or “Doing Business As” names are another term for fictitious names.