To register a business step by step: (1) form your legal entity with your state's Secretary of State (an LLC filing usually costs $50–$520 and takes a few days to two weeks), (2) get a free Employer Identification Number (EIN) from the IRS in about 15 minutes online, and (3) handle local registrations such as a business license, sales tax permit, or DBA name through your city or county. Those are three separate offices, in that order. Most people skip steps or do them out of sequence because nobody told them they were separate things.

That's the whole reason this guide exists. The word "register" gets used for three different filings at three levels of government, and almost every beginner conflates them. Once you see the three layers clearly, the process stops feeling like a maze.

The Three Layers Nobody Separates for You

When someone says "I registered my business," they could mean any of these, and they are not interchangeable:

Layer Where you file What it is Typical cost Typical time
1. State entity State Secretary of State Creates the legal business (LLC, corporation) $50–$520 filing fee Same day to ~2 weeks
2. Federal EIN IRS (free, online) Your business's tax ID number $0 ~15 minutes
3. Local registration City / county Business license, sales tax permit, DBA $0–$200+ Days to weeks

Do them in that order. The EIN application asks for your legal business name, which you don't officially have until the state approves your entity. The local license office often wants both your entity paperwork and your EIN. Working out of order means redoing forms.

One exception: if you stay a sole proprietor (no LLC or corporation), you skip Layer 1 entirely — you become one automatically the moment you start selling, with no state filing. Then "registering" means only Layers 2 and 3. Still deciding whether you need an entity? Read do you need an LLC to start a business first.

Step 1: Choose Your Structure (Then Register the Entity with Your State)

Before you can register an entity, you have to pick which one. For first-timers, the realistic shortlist is:

  • Sole proprietorship — no filing, no fee, no liability protection. Default if you do nothing.
  • LLC — the most common choice. Separates your personal assets from business debts and lawsuits. Flexible taxes.
  • Corporation (C-corp or S-corp) — usually only worth it if you're raising venture capital or have specific tax reasons.

For most people reading this, the answer is LLC. It's the cheapest meaningful liability protection you can buy.

To register the LLC, you file a document (called "Articles of Organization" or "Certificate of Formation," depending on the state) with your state's Secretary of State, almost always online. You'll provide:

  • Your business name
  • Your business address
  • A registered agent (more on this below)
  • The names of the owners (called "members")

State filing fees vary wildly, and this is the part beginners never see coming:

State LLC filing fee Ongoing cost Notes
Wyoming $100 $60/year annual report Among the cheapest to maintain
Delaware ~$110 $300/year franchise tax Popular but pricier yearly
Texas $300 $0 income tax (report required) No formation hurdle for residents
New York $200 Publication rule adds $200–$2,000+ The hidden newspaper-publishing requirement
California $70 $800/year minimum franchise tax Cheap to file, expensive to keep

A common myth says you should form your LLC in a "cheap" state like Wyoming even if you live elsewhere. For most local or home-based businesses, that backfires — you'll have to register again as a "foreign" business in your home state (see below) and pay both. Register in the state where you actually live and operate.

For state-specific walkthroughs, see our guides on starting a business in Texas, California, or New York City.

Do I need a registered agent, and can I be my own?

A registered agent is the person or company designated to receive legal documents and official state mail for your business. Yes, in most states you can be your own for free, as long as you have a physical street address in that state and are available during business hours. Hiring a service ($100–$300/year) buys privacy (your home address stays off public records) and means you're not tied to your desk to receive a process server. For a brand-new solo business on a budget, being your own agent is perfectly fine.

Step 2: Get Your Free EIN from the IRS

An Employer Identification Number is your business's version of a Social Security number. You'll use it to open a business bank account, hire employees, and file business taxes.

Here's the critical part: it is completely free and takes about 15 minutes. Apply directly at irs.gov. Ignore any site that charges you $50–$300 to "get your EIN" — those are middlemen reselling a free government service.

You need an EIN if you formed an LLC or corporation, plan to hire anyone, or want a business bank account. A pure sole proprietor with no employees can use their SSN instead, but getting an EIN is still smart so you're not handing your SSN to every client and vendor.

Apply online Monday–Friday during IRS business hours and you'll get your number instantly on the confirmation screen. Save that confirmation letter (CP 575) — your bank will ask for it.

Step 3: Handle Local Licenses, Permits, and Your DBA

This is the layer people forget, and it's where surprise fines come from. Depending on what and where you sell, you may need:

  • A general business license from your city or county (often $25–$200/year).
  • A sales tax permit / seller's permit from your state's tax or revenue department if you sell taxable goods. Usually free to register, but required before you make your first sale.
  • Industry-specific permits — food handling, contractor licenses, cosmetology, childcare, home-occupation permits, etc.
  • A DBA ("Doing Business As") if you operate under a name different from your legal name or LLC name. Filing a DBA typically costs $10–$100 at the county level.

Quick DBA example: your LLC is "Riverbend Holdings LLC" but you want to brand the storefront as "Riverbend Coffee." You'd file a DBA so you can legally use "Riverbend Coffee" on signage, invoices, and your bank account.

Not sure what your specific city requires? The SBA's licenses and permits page is the cleanest starting point, and your city's website almost always has a "business license" search.

A Copy-Paste Registration Checklist

Work top to bottom. Don't move to the next layer until the current one is done.

LAYER 1 — STATE ENTITY (skip if sole proprietor)
[ ] Pick a structure (LLC for most beginners)
[ ] Search your state's business name database for availability
[ ] Choose a registered agent (yourself or a service)
[ ] File Articles of Organization + pay state fee
[ ] Save the approved Certificate of Formation

LAYER 2 — FEDERAL EIN
[ ] Apply free at irs.gov (after entity is approved)
[ ] Save the CP 575 confirmation letter

LAYER 3 — LOCAL & TAX
[ ] Apply for city/county business license
[ ] Register for a state sales tax permit (if you sell taxable goods)
[ ] File a DBA (only if using a different brand name)
[ ] Get any industry-specific permits

AFTER REGISTRATION
[ ] Open a business bank account (bring entity docs + EIN)
[ ] Note your state's annual report / franchise tax due date
[ ] Renew registered agent and licenses on schedule

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What If You're Already Operating Without Registering?

Many freelancers and side-hustlers earn money for months as informal sole proprietors. If that's you, here's the clean path to formalize:

  1. You're not in trouble for being a sole proprietor — that status is automatic and legal. The risk is unpaid taxes and missing local permits, not the lack of an LLC.
  2. Catch up on taxes. If you've earned income, you owe self-employment tax and likely owed quarterly estimated payments. Talk to a tax pro about the current year first.
  3. Form your LLC (Layer 1) and get an EIN (Layer 2) as described above.
  4. Re-paper your relationships. Move client contracts, invoicing, and recurring income to the new LLC name and a business account so the books are clean from day one.

You don't lose your history or clients by formalizing — you just gain protection and cleaner records.

The Part Every Other Guide Skips: Staying Registered

Registration is not a one-time event. Most LLCs have to file an annual (or biennial) report with the state to stay in "good standing," usually $0–$300. Some states also charge a franchise tax (California's $800/year being the famous one). Miss these and your business can be administratively dissolved — meaning you lose your liability protection without realizing it.

Put two recurring reminders in your calendar right now: your state's annual report deadline and your registered agent renewal. That five-minute habit prevents the most common (and most avoidable) compliance failure for new businesses.

Frequently Asked Questions

Do I need to register a business before I start making money?

Not necessarily. You can legally earn money immediately as a sole proprietor with no state filing. But if you want liability protection, you should form an entity (Layer 1) before signing big contracts. And if you sell taxable goods, you generally must have a sales tax permit (Layer 3) before your first sale, regardless of structure.

How long does it take to register a business?

The EIN is instant. State entity approval ranges from same-day (in states with expedited online filing) to about two weeks. Local licenses can take a few days to a few weeks. Realistically, a motivated beginner can be fully registered in one to two weeks.

Can I register a business without a lawyer?

Yes. The vast majority of LLC registrations are done by owners themselves directly on the state website. A lawyer is genuinely helpful only for complex ownership splits, multiple investors, or unusual industries. For a standard single-owner LLC, you don't need one.

What happens if I operate a business without registering it?

If you stay a sole proprietor, nothing — that's legal. The real exposure is operating without local licenses or a sales tax permit when required, which can trigger back taxes, penalties, and fines. And without an LLC, your personal assets aren't protected if the business is sued.

What if I operate in more than one state?

This trips up many growing businesses. When you register your LLC in your home state and then start regularly doing business, hiring, or opening a location in another state, that second state usually requires a "foreign qualification" filing (plus its own fees and registered agent). It's an extra registration, not a re-do. Plan for it before you expand across state lines.

Note on BOI reporting: You may have read that all small businesses must file a Beneficial Ownership Information (BOI) report with FinCEN. As of 2025, that requirement was rolled back for U.S.-formed companies, who are currently exempt. Because the rules have shifted repeatedly, check FinCEN's BOI page for the latest status before assuming you do or don't need to file.