It’s critical for businesses to understand how to register their firm, especially when they’re just starting out. While you may manage a business without registering it, as your firm expands, it’s a good idea to incorporate it.
In this article, we will explain how to register your business in the UK and accept payments online. In the viewpoint of the government, registering a business makes it official, and it assures that both your personal and commercial assets are constitutionally protected.
Businesses nowadays must register with various authorities, which can be confusing for those who are unfamiliar with the process. In this article, we will walk you through the process of registering your company in 2022 so that you can get started right away.
1. Choosing a Business Name
Every eCommerce business owner will need to choose a name for their web store as the very first step in registering their company. It’s critical that you emerge with a distinctive name for your web store– something that will attract your audience’s attention and make a significant impact. Make sure the name is relevant to your industry and something around which you can develop a marketing campaign.
It might be difficult to come up with the right name that will endure the passage of time. Examine some of your rivals’ names to see what kinds of names they employ. It might be difficult to come up with a business name that will endure the test of time. Examine some of your rivals’ names to see what kinds of names they employ.
Make a list of the names you prefer, and then consider how your concept compares. Do you have a unique concept that turns heads? What could you do to make it stand out if it doesn’t? You may also use a business name generator to come up with a name for your firm.
2. Getting a Business Name Registered
You’ve already solved one of the most challenging aspects of registering a business by coming up with a great name for your eCommerce firm. It’s vital to double-check that your company name hasn’t previously been registered. Registration for a company name that is already registered will be automatically rejected.
You’ll also forfeit any application processing costs. To prevent any of these issues, check your local company directories to see whether the name you want to use is already used. Take some time to consider your company’s long-term goals once you’ve picked a distinctive business name that is accessible. Do you believe your company’s name will stand the passage of time? Will it be able to withstand in the long run?
Avoid picking a business name that is based on a current trend. If you named your eCommerce company “Selfie Stick Inc.” you could experience some immediate success, but how popular will it be in the following several years? It’s crucial to examine the longevity of a name prior to registering your company, as changing your name afterwards would be inconvenient.
Changing your name after you’ve established an eCommerce firm is a legal headache that might also cause confusion among your current consumers.
3. Choosing a Business Entity
After you’ve chosen a name for your company, you’ll need to select the form of business organization that best describes your online website. There are two basic options: forming Corporation or LLC.
As an LLC, you’ll have much less paperwork to manage than if you were an incorporation, which means you’ll have more chances to concentrate on getting your business up and running.
You will not be personally accountable for any debts that your firm has if you set up your company as an LLC. This simply means that if something happens to your business, your personal assets, such as your funds, vehicle, and home, will be fully secure.
Another advantage of forming an LLC is that you will be able to lease your personal possessions to your company. For example, if you run your business out of your house, you may deduct the cost of your office space as a business expenditure. You’ll save some money as a result of this, which you may use towards other areas of your business.
Corporation simply means that your firm will go from a single proprietorship to a legally recognised corporate organization.
When it comes to establishing a firm, there are two major options: registering as a ‘S’ corporation or a ‘C’ corporation. There are no requirements for either choice; it’s simply a matter of deciding which is best for your business.
If you register your business as an ‘S’ corporation, you will be able to take advantage of ‘pass-through taxes,’ which means your firm will not be taxed at the corporate level. Instead, you’ll pay tax on the money generated by your firm, not on the company itself.
‘C’ companies, on the other hand, are treated as a separate entities. This implies that your business will be subjected to ‘double-taxation,’ meaning that you will be taxed on the earnings of your business as well as your personal income.
Keep in mind that any format you adopt for your company isn’t fixed in stone. Depending on the demands of your business, you’ll be able to migrate from one format to another as your company grows.
4. Selecting the State in Which You Will Register
Spend some time thinking about where you’ll register your company. There are different tax rates in different states. One point to note is that you are not obligated to register in the state wherein your business is located. It makes sense to register a new business in a state which has low sales tax rates since it will save you money in the long run.
In the united states, the state of Texas does not impose income tax on businesses and corporations. So registering your business in the state of Texas makes sense.
Amazon, one of the world’s largest online merchants, makes use of this feature. Examine the tax rates in each state and choose which state is ideal for your company’s goals and present requirements. Some states do not have a sales tax, thus there is no need to register.
5. Getting a Federal Tax ID for Your Company
You must also register your company with the federal government. To do so, you’ll need to apply for a federal tax ID for your company. Your federal tax number is your company’s version of a social security number.
You’ll need a number for your business because you’ll be filing tax records and documenting reports on your business activities. You won’t be able to share your tax forms with the federal or state governments until you have this number.
6. Getting a Bank Account for Your Business
You’ll find that having a business account is a terrific method to keep your personal money distinct from those used to fund your online store. Owning a business account is also advantageous in terms of taxes since you’ll be able to invoice some payments and deduct them as company expenditures.
Creating a business account will provide you with a clear picture of how much money your business costs each month, as well as the precise amount of money your firm makes. It will also increase the professional reputation of your firm.
Customers will pay for orders using your company account rather than your personal account. This differentiation gives your buyer assurance that your company is reputable.
It might be intimidating to think about registering a business if you’ve never done it before. But we hope that this article helps you with the early hassle of registering your business.