Legal Steps to Start Your New Small Business

Legal Steps to Start Your New Small Business

Business Law

July 9, 2025

Starting a new small business is exciting, but it’s important to handle the legal steps correctly from the beginning. This ensures your business is protected and ready for growth.

1. Choose Your Business Structure

The first legal step is deciding on your business structure. Will you operate as a sole proprietorship, LLC, or corporation? Each option has different legal and tax implications. Many small business owners choose an LLC for personal liability protection while maintaining simple tax reporting.

2. Register Your Business Name

If you plan to operate under a business name different from your own, you may need to file a “Doing Business As” (DBA) with your state or county. This step protects your business name and helps build your brand legally.

3. Apply for an EIN

Most small businesses need an Employer Identification Number (EIN) from the IRS, even if you don’t plan to hire employees right away. This number is used for tax filing, opening a business bank account, and applying for licenses.

4. Obtain Necessary Permits and Licenses

Depending on your location and industry, you may need federal, state, or local business licenses and permits. Check with your local small business office or state licensing agencies to ensure compliance.

5. Open a Business Bank Account

Opening a separate business bank account will help you keep your personal and business finances organized, making tax time easier and providing legal protection for your personal assets.

Final Thoughts

Taking these legal steps to start your small business will set a strong foundation for your future success. It may seem like a lot, but getting your legal requirements in place now will help you avoid problems down the road and allow you to focus on growing your business with confidence.

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Legal Steps to Start Your New Small Business