Business Formation - Everything You Need to Know

Forming a business means choosing a legal structure, registering with your state, and meeting a handful of federal requirements — things like appointing a registered agent, filing formation documents, and getting an Employer Identification Number (EIN) from the IRS. The right structure depends on how you plan to run the business, how many owners are involved, and how you want to handle taxes. This hub covers every part of that process and links to the detailed guides for each step.

If you're forming your first business and want the simplest structure with liability protection, start with the LLC guide. If you're planning to raise outside investment or issue stock, the C Corp guide is the right place. If you're running a mission-driven organization, go to the nonprofit guide. If you already know your structure and need to handle taxes, head to the EIN and tax elections section.

Your business structure determines how you're taxed, how much personal liability protection you have, and what ongoing compliance you'll need to manage. The four most common structures are sole proprietorship, partnership, LLC, and corporation — each with different trade-offs. Most entrepreneurs forming a new business choose an LLC or corporation. The SBA's business structure guide is a good reference if you're still weighing options.

The structure you choose also affects your formation documents. LLCs file Articles of Organization with the state. Corporations file Articles of Incorporation. Both are filed with the Secretary of State or equivalent state agency, and filing fees typically range from $50 to $500 for LLCs and $100 to $800 for corporations, depending on the state.

When you form an LLC or corporation, your legal business name is registered with the state as part of the formation filing. If you plan to run the business under a different name, you'll need to register a 'Doing Business As' (DBA) name separately — usually with the state or county, depending on where you operate. Sole proprietors and partnerships typically register DBAs at the county level.

It's worth checking name availability before you file. Most Secretary of State websites have a free name search tool. Registering a business name with the state does not give you trademark protection — that's a separate federal process through the USPTO.

Every LLC and corporation in the U.S. is required to have a registered agent — a person or business with a physical street address in the state of formation who is available during business hours to receive legal documents and official correspondence on behalf of the business. A P.O. box does not qualify. You can serve as your own registered agent, but many entrepreneurs use a registered agent service to keep their personal address off public records.

Most businesses need an Employer Identification Number (EIN) — a federal tax ID issued free by the IRS. LLCs, corporations, and any business with employees need one. Sole proprietors without employees can use their Social Security number instead, but an EIN keeps your personal number off business documents. You can apply online at irs.gov and get your EIN the same day.

Tax elections are a separate step. If your LLC wants to be taxed as an S Corp, you file Form 2553 with the IRS. If you want a different classification entirely, Form 8832 handles that. These elections have deadlines, so it's worth getting them sorted early in the year you want them to take effect.

Forming your business entity is not the same as being licensed to operate. Depending on your industry, location, and business activities, you may also need federal, state, or local licenses and permits. These vary by city and county — a home-based business in one city may need a zoning permit that a similar business in the next city does not. The SBA's license and permits tool is a practical starting point for figuring out what applies to your situation.

These are the most-used resources in this section. If you're not sure where to start, the LLC formation guide and the structure comparison page cover the most ground for most entrepreneurs.