How to Start Your Business Legally

December 15, 2022

How to start your business legally written in white text on a raspberry background

If you are confused by all the steps to start your business legally, register an LLC, and get your business started this episode is for you! I was overwhelmed by all of these steps when I first started my business, but once I finally did them I realized how easy it was. It doesn’t have to be complicated! Keep reading for some tips to make this process easy for you too. 

Check out Braden Drake for legal, tax, & profit help

Get the 8 Steps to Start Your Business Guide for free

Sign up for my Build Your Business Cohort

**This is not legal advice. I am not a licensed attorney nor a tax professional. Only use this advice for informational purposes only.**

Listen to the Episode

Steps to Start Your Business Legally

1. Check that Your Business Name is Available

Before you file any documents, you want to make sure your business name is available. You can do this by searcing your state’s Secretary of State website. You also want to check the USPTO registry to see if anyone has a trademark of the business name you want. Next, do a Google Search to see if any results pop up for your desired business name. You could also check to see if your business name is available for a domain name or social media handles.

2. Register Your Busienss with the Secretary of State (Obtain an LLC)

Once you pick a business name that is available, you want to register the business with the Secretary of State. For most people running their business by themselves, you want to get an LLC. It is okay to operate your business as a Sole Proprietor, but it does give you an extra layer of protection to get the LLC so I would just get it.

All you have to do is Google search “register for an LLC in your state” and make sure you get on your state’s government website for the Secretary of State. Don’t go to any other website that tries to sell you services to set up your business. There really is no need to pay for this service when you can do it yourself easily.

Once you’ve found the right place to register your business, just fill out the forms on the website. They will ask for a “registered agent” – and that can just be you! Filling out the forms should take about 10 minutes. At the end, they’ll ask for payment for the LLC. Be sure you read the rules to see if if is a yearly fee or a one time fee. It differs from state to state.

3. Get an EIN from the IRS

Once you have received your articles of incorporation from you Secretary of State (should take a. fewhours to. afew days), you’re ready to get your EIN or Employer Identification Number. This is free and you’ll get it immediately. You will head over to the IRS website to do this. Again, make sure it’s the official government site of the IRS. You’ll fill out another form and they’ll get you the EIN number immediately!

4. Open a Business Bank Account

Once you have your LLC and your EIN, you’re ready to open a Business Bank Account. The reason you want to do the other steps first is because you want to open the account in the name of your business. And they will ask for your EIN when you open the account. If you are operating as a sole proprieter, you can just get the account in your name and use your social security number as the EIN. But I highly recommend getting an EIN anyway even if you are a sole proprietor because it does give you that extra layer of separation between you and your business.

I highly recommend using Novo for your business banking needs. If you use the link from me, you’ll get $40 cash (and so will I) in your account. I like Novo because it’s a completely online bank so I can deposit checks anywhere. They also have “reserves” where you can put money in different folders. They are not separate accounts but just folders. You can have it set up to automatically put a percentage of the deposits in a certain reserve. It’s really great for saving for tax purposes or for prioritizing profit!

You want to open a separate bank account right away before buying anything for your business so that you can keep you personal and business finances separate. You can connect your business bank account to softwares like Quickbooks to have it automatically track and categorize your expenses. Or you can just use a trusty old spreadsheet to keep records. Either way, having a separate bank account makes this process really easy.

5. Register for any Permits or Licenses you will need on a local level

Next, you want give your local city hall a call and ask them about obtaining a business license or retail license to operate your business. Again, this is a step that I put off when I was first starting because I thought it was too confusing. It’s not! Just call your city or county and they will tell you what to do. Usually, you can get your business license by paying a small fee. Every year they will mail you a form to renew it and pay the fee yearly.

You will also want to ask if you need to register for a retail license to collect sales tax. This varies from state to state. Some states make you collect sales tax only on physical products and not digital products or services, while some states make you collect sales tax on both physical and digital products as well as services. You will likely need the retail license. If so, it will just be another form you fill out, likely with your state’s Department of Revenue. Check that it’s their official site again! Once you have that license, you’ll just add the sales tax as a line item on your client’s invoices. You can put that money you collect in a reserve in Novo and then every month when you file your Sales Tax Return you can use that money to pay the sales tax.

6. Obtain Business Insurance

The next step is to obetain business insurance! Ask a few colleagues what they use for insurance. You can call each place and get a quote and choose what has the best coverage and rates. If you don’t know anyone in your field, that’s okay! Just call around to a few major insurance companies like State Farm or Nationwide and ask about getting Business Insurance. You will also want to get a General Liability Policy and possibly a policy to cover your equipment if you use a lot of expensive equipment to operate your business (like cameras for photographers). As a photographer, my insurance is through PPA.

Congratulations! You Have a Business!

Once you go through all of those steps you have a legit business! Way to go!

If you want more help in starting your business, check out my free guide on the 8 steps to start your business!

If you liked this episode, consider sharing it on Pinterest.


Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Listen Now

Listen to the Episode: >Read the Transcript of this Episode< Are you in search of the perfect CRM solution for your business needs? Look no further! In this blog post, we’re going to delve into the reasons why I believe 17Hats is a superior choice compared to HoneyBook. As an online business manager who’s passionate […]

17Hats vs honeybook feature comparison is written in purple text on a tan background

Listen Now

If you’re a business owner who’s looking for some extra help, you may be considering hiring a VA or an OBM. Perhaps you’re already a VA and are looking to level up your skills and income. Or maybe you’re wondering if you should transition from a VA to an OBM. Whatever your situation, this episode […]

Listen Now

Are you looking to take your client experience to the next level? Creating a white glove experience is all about prioritizing your clients’ needs, genuinely caring about their success, personalizing their experience, and solving issues before they arise. In this episode, we’ll explore how to give your clients the best possible experience with a few […]

Listen Now

Today on the podcast we’re talking about sales funnels! I know that can seem scary, but they are simpler than you think! As an entrepreneur, sales funnels are one of the most important parts of your business. Without them, you might have a great product or service, but you won’t be able to get it […]

favorite Episodes

get it for free!

This FREE guide on the 8 steps to take to start your creative business. In this guide, you'll learn the exact roadmap to take to go from 0 clients to fully booked sooner than you think!

Start building the business of your dreams

GET the newsletter

©️ 2024 Christi Johnson Creative LLC


Check out my FREE on-demand masterclas on the Top 3 Mistakes You're Making that Leave You Feeling Overwhelmed, Insecure, & Lonely. You'll learn how to beat the overwhelm & get closer to your dreams every single day!