Registering Your Business – What You Need to Know
So, you have the idea and are ready to start (or may have already started your own business). Congratulations. We’ve met many entrepreneurs who aren’t sure what to do next. Well, don’t worry, we’re here to help! The first step (which is conducted of multiple other steps) is registering your business and receiving a formal license.
Below are specific instructions on how to get your business registered in Indiana (it’s not as scary as it seems).
Identify Your Business Structure
Before you register your business, deciding on what business structure is best for you is a must. This is an important step, even if it is just you in the business, because your structure can separate your personal and business assets. There are four options for small businesses:
- Sole Proprietorship – This is the simplest business structure because it involves only one sole owner and doesn’t require a ton of paperwork or fees. You also pay personal taxes and are personally liable for sole proprietorship.
- Partnership – General partnerships include one or more people who will contribute to your business and hold themselves personally liable. There is also limited partnerships – some partners are not personally liable, or surprise, limited.
- Limited Liability Company (LLC) – This is a type of model that keeps you from personal liability. An LLC is not a different unit and personal income taxes are paid for any profits from your small business, like sole proprietorship.
- Corporation – A corporation is the most strategic type of business structure because it has privileges and liabilities that go beyond a person. A corporation becomes its own structure and pays its own taxes.
Acquire a Federal Employer Identification Number (EIN)
The next step is registering for an EIN, which is essentially a social security number for your business. An EIN will be needed for financial transactions, specifically for applying for credit, filing taxes and providing a W9 form to any customers. Here’s how to know if you need an EIN:
- You’ve started a new business
- Hired or will hire employees. This includes household employees
- You’ve created a bank account that requires you to have an EIN for banking purposes
- Decided the legal character/ownership of your business (your business structure)
- Purchased an existing business
You can also visit the IRS website for more detailed instructions. Your EIN is your permanent number and can be used immediately. For example:
- Opening a bank account
- Filing a tax return (by mail)
- Applying for a business license
Note – It will take up to two weeks before your EIN becomes part of the IRS’s permanent records. This means that you need to wait until it is completed so you can file an electronic return, make an electronic payment, and pass an IRS Taxpayer Identification Number matching program.
Getting Your Business Name
If you’re doing business in Indiana as a fictitious or doing business as (dba) name, the state law has conditions to meet and a set of registration requirements for organizations, limited liability companies and partnerships. The Secretary of State’s office clears new names and handles business registrations. Name search services are also provided for new business owners.
If you are registering a fictitious name, you must keep it clearly distinguished from other businesses with the same name and of the same type. The Indiana Secretary of State provides a name availability function on their website. The search results have the name and location of the business, business type, and status of name registration, if any. You can also get the name of the registered agent, of company directors, and information on how to keep a corporate report.
Registering Your Name
After you’ve gone through the name availability check, it’s time to register. You can file an application online for $10, which will last for 120 days. This will give you time to finalize business plans and get all your needed paperwork to the state. A fictitious name reservation in advance of business registration isn’t required. You can easily file founding paperwork the same day you check the name availability.
Indiana doesn’t require business registration for sole proprietorships or general partnerships, but the organization must abide by the rules on fictitious names. The state of Indiana also requires regular business entity reports on the founding anniversary to keep public records updated (file at INBiz.in.gov). Failing to do so could mean personal liability for debts and legal claims.
If you’re from out of state and starting a subsidiary or sister company in Indiana, you have a foreign corporation. The same rules on names apply and the state still allows the 120-day name reservation if you’re not native.
Even if you file the correct paperwork with the Office of the Secretary of State, you should still contact:
- Indiana Department of Revenue – Indiana imposes multiple taxes on businesses. For more information contact the Indiana Department of Revenue Taxpayer Services Division, Withholding (317) 233-4016, Sales Tax (317) 233-4015, Corporate Tax and General Information (317) 615-2662. Or visit Room N-105 Indiana Government Center North, 300 North Senate Avenue Indianapolis, IN.
- Department of Workforce Development – Organizations with employees have multiple responsibilities. An Employer’s Desk Guide may be obtained by contacting the DWD at (317) 232-7436 or (800) 437-9136.
Federal Licenses and Permits:
Depending on your business activities and if they are regulated by a federal agency, you may need to get a federal license or permit. Examples would include:
- Commercial fishing
- Manufacturing/selling alcoholic beverages
You can also check here to see if any of your organizations activities are listed on the Small Business Administration (SBA.gov) website and check with the correct federal agency to get information on how to apply.
If you need any more help or want to get all of the information possible, go to the State of Indiana’s Guide to Starting and Operating a Small Business. And, locally, you can also reach out to the ISBDC.
Hopefully, these instructions helped you better understand the needed process of filing your small business. If you ever need help with forming a business plan, finances, or getting your business off the ground and running, contact Launch today so we can help kick start your organization!