Starting a business is a crucial decision, not only because it involves a lot of money, but it can also have long-term effects on your life. While the idea of starting a business sounds easy, there are a series of steps involved in registering the same. Business owners often come from different fields, find the registration stage quite daunting, and may face difficulties in later stages.
Are you planning to register a business and wonder what things you must keep in mind? Read on and learn more about things to remember to make the registration process easy for you.
What should you remember when registering a business?
Plenty of business owners focus on starting a business and deciding to put off the registering process later on. But it can lead to innumerable troubles, which you can prevent by registering the business at the right stage and with the proper procedure. Here are four essential you remember during the registration process:
1. Decide the name carefully.
The first and, indeed, the essential thing to decide is the name of your business. The name you choose must not only be relevant to your business but also help you stand out among the competitors. While most people can zero in on the business idea quickly, it takes much longer to find a suitable name.
Your customers recognize your business through the name; hence it becomes imperative to choose the right one. Naming the business is equivalent to laying the base of your brand. While choosing the name of your business, you must keep the following things in mind:
- Pick a name that you can remember, pronounce, and short enough to communicate your brand to the audience. Avoid using complex words that can confuse the user.
- The name you pick must reflect the mission statement of your venture. It must give the audience an insight into what your business is and what products or services you offer.
- Make sure the name is unique and not identical to another brand. In the case of similarity, you might have to change your brand name later on. To avoid such problems, you can seek a lawyer’s help in the initial stage to review the name.
- In today’s time, every business must have a digital presence. Check whether the domain name is available or not. If the domain name is already taken, it is wise to look for other options.
2. Find Office Space.
A business also needs an address, where you will receive all the business correspondences or official notices. The official address is also required at the time of registering the business. You must choose registered office address suitable for the type of business you want to do, and the authorities should approve it.
In case you have a small business and want to operate from your own home to save up the rental cost, you can use your home address as registered office space. You may need to get the necessary permissions from the housing authorities. If you are using a residential property that you have rented, and the bills are in the name of the owner, you will need to get a ‘No Objection Certificate’ during the registration process.
3. Choose an optimum business structure.
As a business founder, you must have a clear idea about the structure of your enterprise. It is essential to know the business structure before you start the registration process. For this step, you must have in-depth knowledge of the different structures and technicalities of each. You have the option to choose from:
- Sole ownership
- Partnership firm
- Limited liability company
- Private limited company
While choosing a business type, you must consider three essential factors. They are:
The taxes that a business has to pay can vary significantly depending on the type. While a sole proprietor can enjoy tax benefits by claiming personal tax benefits, a trust need not pay tax on profits. You must carefully consider the tax implications before choosing the business type.
Even though business is always risky, certain types of businesses can curb the risk factor. A sound business owner will always look for ways to secure valuable and personal assets. Sole proprietorship and Limited Liability Company (LLC) involve less risk.
Corporations and companies require detailed record keeping and adherence to many things, making the business highly complex.
The level of control that you wish to have in the business is another crucial factor. If you want to have sole control, you must opt for proprietorship, but you can look for other business structures.
4. Legal and accounting compliances:
Commencing a business is not at all easy work. You will require plenty of legal and accounting compliances before you even begin with your business’s operations. The list of observances may vary from business to business. While you can get these licenses or permits after your business registration, it is best to get familiar with the technicalities beforehand. It will help you avoid indulging in any kind of illegal activity.
You will require documents to register your business, such as tax registration, trade/food licenses, or any other permit, depending on the business type. On legal terms, you will require an employment contract, vendor agreement, freelancer agreement, and even shareholders’ agreement in the case of a company. For accounting compliances, you will need an auditor, bookkeeping, payroll processing, and tax filings. Go through the extensive list of compliances and formalities before registering your business and complete them soon to avoid any complications later on.
When it comes to commencing a business, every entrepreneur focuses majorly on shaping their vision into reality. They want to develop the product or service, pitch to prospects, find investors, and much more. Besides that, registering a business is the first thing you must do before starting your venture. If you are set to embark on your entrepreneurial journey, keep the things mentioned above in mind, and register your business smoothly.