This is one area of business where the saying Anything worth doing well – is worth doing right is so true. Filing your business name paperwork correctly is critical to obtaining business credit. If you do it wrong, you could give someone else the ability to use your business name or even take it from you once you have your company established.
There is always paperwork involved in this type of process, and it needs to be done right. This is one of those times when you want to make sure you have double checked everything to verify its accuracy.
The first thing you want to do is make sure youve got what you need to set up your business. This is a handy checklist you should use to be sure your company looks like a real business and not just a hobby.
1. Company Name " Your company must use a name that is available in your State. You cant register your entity if someone else has already chosen and is using the name you picked. You should find out – before you begin – if your name is available. To onto your States website and do an entity name search. In Michigan, for example, website is www.michigan.gov. Once you verify that your business name is available, then you must make the decision at this point what business structure is going to be best for your business (i.e. corporation, LLC, partnership, etc.). Generally, most States will allow you to obtain the necessary forms you need to register directly from their website and will allow you to down-load them for free. 2. Address " Your business must have a real, physical address – not a P.O. box or UPS address. If you wish, you can use your home address. The main idea is that your address needs to be a physical address that can accept mail for your business. The address you register with the State must also be the same address you use when you apply for business lines of credit or vendor credit (like a Home Depot card). 3. Tax Payer ID Number " After youve registered your business with your State, you must get an Employer ID number, or EIN, from the Internal Revenue Service. This EIN is what you use when you apply for business credit or lines of credit. You should not use your social security number on business applications unless you are applying as a sole proprietor. 4. Phone Number – Once youve registered with your State, and obtained your EIN, you should next get a dedicated telephone number for your business. This number must be listed in the national 411 directories. It must have the same name and address that you registered with your State. Be sure your use your EIN and not your social security number when you call to set up your new phone line. You definitely should never use a cell phone number as your primary business number. Banks and lending institutions will generally call 411 to verify that the name and phone number you list on your application matches the data they find on your States website where you are registered. If there are discrepancies, you may not be able to obtain business credit.
Dont forget to consult a professional. Its always in your best interest to consult with a tax professional or an attorney before you begin any new business venture. There are possible tax implications that could hurt you or your business if you set up your company incorrectly. A tax professional may also offer the benefit of being able to discuss with you the advantages and disadvantages of each of the business structures that are available and can help you decide which one is the best for you financially.
