STEP 02
Your business, on paper
Registered where you need to be, with a tax number and its own bank account.
Registering the business if your situation calls for it, getting a tax ID number, and opening a bank account in the business name instead of yours.
- Time
- A few days
- Approximate cost
- Filing fee, $50 to $500
- When you are done
- The business has its own paperwork and its own bank account.
How to set it up
Decide which state. For most people it is the one they actually live and work in.
Search for your state plus Secretary of State business filing. Use the official .gov site only. There are paid lookalikes that charge for the same forms.
Search their name database for the name you want. Make sure nobody has it.
File the formation paperwork online. It asks for the name, an address, and who is responsible.
Pay the filing fee with a card. The amount is set by your state.
Approval takes anywhere from the same day to several weeks, depending on the state and how busy they are.
When it is approved, download the stamped document and save the PDF.
Go to irs.gov and apply for an EIN online. It is free and takes about 15 minutes. Only the official IRS site is free.
You get the number on the last screen. Save that PDF before you close the window.
Take the stamped document, the EIN letter and your ID to a bank and open a business checking account.
Before you start, and what to watch for
Before you start
Not every business has to form an LLC or a corporation before it can take money. Many sole proprietors trade legally under their own name. What you need depends on your state, your industry and your situation, so treat this card as the shape of the task, not as advice about your case.
Licences and registrations
Separately from all of the above, your city, county, state or industry may require a licence, a permit or a sales tax registration before you can trade. Check before you take money rather than after.
When you are done
The money lands somewhere that is not your personal account, and the business has the paperwork its bank and its payment provider will ask for.
What it costs
The state filing fee, roughly $50 to $500 depending where you live, and only if you are forming an entity. The tax ID is free. Many banks open a business account with no monthly fee, though some charge one or require a minimum balance, so read the account terms.
Watch out for
Which business type to choose is a question for an accountant or an attorney, not for me. It depends on your state, your industry and your situation.
Third-party prices, fees and payout times are approximate, were accurate when written, and can change at any time. Check the provider's own pricing page before you buy.
Educational information only, not legal, tax, accounting, banking or security advice. Requirements, prices and product features can change.