Business Entity Set-Up Checklist
TBOE Business Entity Formation Checklist
Is your business entity properly set up?
TBOE created the Business Entity Setup Checklist so entrepreneurs can save money and still ensure your business entity is formed correctly, protecting your personal information from websites and in the best way to accomplish goals pertaining to business credit & funding, grants and government contracts.
Next Steps After You Read This How-To:
DIY - Follow the Checklist Below
Consult for Free with a TBOE Business Entity Formation Specialist (Zoom or In-Person in Atlanta)
Check Secretary of State and Trademark Database
Once you have filed and formed your business legally, noone else in that state can file using that same business name. If you want extra protection, you can trademark your name. As an FYI, filing a fictitious or “doing business as” (DBA) name will not be sufficient to protect your business name. You must file it with the SOS.
Criteria for Business Name
Is "Trade-markable"
DIY - Follow the Checklist Below
DIY - Follow the Checklist Below
Apply for a "Name Reservation" once you select your name
Do Not Include in Your Business Name
Do not include high risk words to get business bank accounts or merchant accounts (CBD, Cannabis, Drugs, Sexual Content, etc.).
Do not select one that's too similar to a competitor's name or you might find yourself accused of trademark infringement.
Do not use words like “bank,” “trust,” or “insurance,” unless legally authorized to operate as such
.
Do not include a word from an industry considered "high risk."
Do not use a name that implies it is a governmental unit (such as Federal, United States, a city, or borough).
Do not include a word that implies professional licensing (such as “Engineer,” “Attorney,” or “CPA”) without the appropriate licensure
Does not include words that raise red flags
Choose an Industry Code
The North American Industry Classification System (NAICS) is a business classification code used for the purpose of collecting, analyzing, and publishing statistical data related to the U.S. economy by the IRS, financial lending institutions etc.
You select the NAICS industry codes that best fits the activities in which your business is primarily engaged.
Select your NAICS code wisely because some can trigger automatic turn-downs, higher premiums and lower limits when underwriters determine business credit amounts. Higer-risk NAICS codes and industries may still be approved; however, there may be stricter underwriting guidelines.
The IRS will use the NAICS code that you select to determine if your business tax returns are comparable to the other businesses in your industry. Therefore, if your tax deductions do not reasonably resemble the other businesses in your industry, your business could be subject to an audit.
You may suffer an impact on your insurance premiums, interest on loans, no loan approvals, and low business credit scores due to the code selected.
- Cash-intensive businesses
- High-risk industries
- Money-service businesses
- Low-profit margin industries
- Car Sales
- Cannabis or drug-related
- Real estate investing or anything else regarding investing of any type
- Adult entertainment
- Credit reporting agencies
- Travel industry
- Money lending/collecting
- Restaurants
- Dry Cleaners
- Transportation & Trucking
Example of Structuring With a High Risk Industry
You still will be able to invest in real estate; however, you may have to set up a business that does business development, business management, business consulting, marketing & advertising, training and development, etc.; and then operate your real estate investments from a separate division or company.
Don’t Use Your Personal Information
The Goal: A Business Address that conveys a business environment, protects you & family’s personal abode, is USPS non-residential categorized and Google-verifiable.
Business Location Is Key. You Want a Business or Commercial Location and Not a Residential or Strip Mall Address…Even If It’s a Virtual Office/Mailbox
All information provided to the Secretary of State is considered public record and available to anyone.
USPS Designates Addresses Via RDI to Verify Residential or Business Classification.
Vendors, lenders, grant selectors and banks will do their due diligence prior to extending funding/credit/opportunities to your company. Don’t skip this key fundamental step.
And No, It’s Not Too Late if You Already Have an Address!
Want More Information On Why Selecting the Most Strategic Business Address is Important.
Avoid the Risk of Non-Compliance & Missed Legal Documents
Almost every state requires LLCs to name a Registered Agent (aka “statutory agent”). A Registered Agent (RA) is a person who agrees to receive lawsuits, subpoenas, and other official documents on behalf of the LLC.
By law, a RA must have a physical street address in the registered state(s) AND be available 9 a.m. to 5 p.m. for service of process, notice, or demand.
PO Boxes, PMB’s nor virtual “nonreal addresses” may not be used for the Registered Agent physical address.
The third party can be an individual, such as an attorney, or it can be a company whose business offers registered agent services.
"I'll Just Be My Own Registered Agent!!"
Every business owner without a physical address needs a Registered Agent (RA).
Do you want customers showing up at your front door?
Do you want police officers showing up in front of customers, employees, or neighbors?
Do you want creditors and marketers to access your home address?
You Need a “Registerable” Business Number for Business White Pages & 411 Business Registry
A financial institution or lender may perceive a TOLL FREE number as a sign of business credibility; therefore, if you are looking for business funding, select this option.
DO NOT
DO NOT give a personal cell or residential phone as the business phone number.
DO
Do get a Toll Free AND Local Number both!
A future customer may perceive a LOCAL number as a sign of community presence; therefore, if you are looking for clients, select this option.
I Feel FINE Using My Cell or Google Number!!
A cell, home or Google number as your main business line could get you “flagged” as an un-established business that is high-risk.
We provide professional business number packages, toll free and local. You can forward to your cell, make outbound calls using an app. Your business name is on the Caller ID and is attached to a professional voicemail service.
Step 6: Obtain a Professional Business Domain & Email
Create a Sense of Trust and Credibility
Bottom line, professional communication demands professional email. And to be a business without a website, the most basic of an online presence, would make anyone question the legitimacy of a business. Showcasing your company to your prospective customers and financial lenders is key! Get both a professional domain and email.
Why a Professional Website?
Even if your website is a one-pager, get your business a website because ALL registries will ask for your business email and website. This begins with purchasing your domain name, getting a SSL Certificate and getting your email (from Google Workspace, not the same company you purchase your domain)
www.YourBizName.com
Why a Professional Email?
Because email is one of the most common forms of communication, especially with potential clients, having a professional email is key. It helps to establish credibility, brand consistency, enhanced security, more memorable and increases control by enabling future staff/departmental email.
YourName@YourBizName.com
Step 7: Obtain Your IRS Issued EIN
Steps #1 to 6 Completed! You Now Have All Info Needed to Obtain EIN from the IRS
An Employer Identification Number (EIN) is also known as a federal tax identification number or tax id number. Not only is it unique to your business, but it’s crucial for particular business necessities like banking, taxes, and even hiring contractors & employees. It is used to identify a business entity and is free of charge.
You get it by completing an online application on the IRS website that should take less than 10 minutes (if all checklist items above is completed prior).
After you complete the online application, DO NOT FORGET to download the PDF of your IRS EIN Letter. At the time of your online registration will be your ONLY opportunity to download this document; otherwise, you will need to call the IRS to request they mail (or fax) the letter. Many financial institutions DO NOT accept the faxed letter.
Steps #1 to 7 Completed! You Now Have All Info Needed to Register With Secretary of State
Once you select your business location, you will need to then select a Registered Agent (RA) in that state. Do not make the mistake of being your own RA. Below are reasons why every business without a physical address with staff needs a RA.
Why Every Business Without a Physical Address Needs a Registered Agent
You Don’t Keep Normal Business Hours
Your Registered Agent must be available during normal business hours to accept legal documents where a signer or live person is required for receipt. Legal documents are delivered to your RA (and not your business address). If we are not your RA, we cannot sign for your legal documents requiring signatures or delivered by the law.
You Want to Receive Collections, Lawsuits & Other Legal Docs in Private
When a company is served with a Service of Process, it is often delivered by law enforcement. Most business owners do not want police officers showing up in front of customers, employees, or neighbors (if a home-based businesses). Using a professional registered agent ensures you receive any Service of Process both promptly and privately.
You Have a Home-Based Business
The address of a company’s RA is separate from your business address and is a matter of public record on the Secretary of State’s website. That means anyone, including creditors and marketers, can access your home address if you at any time had it registered with the SOS.
You Want to Spend Your Time Building Your Business
Compliance requirements can be time & labor-intensive, often requiring the completion of lengthy and confusing forms using information from various sources. Most entrepreneurs prefer an outside source deal with the minutiae of compliance so they can focus on building and running their business.
You Travel or Are Out of the Office Frequently
If your business requires you to be out of your office frequently, for instance if you’re a real estate agent or an electrician who is making service calls all day, using a registered agent service provider ensures that important documents will still reach you and your business.
Your Incorporation State vs. Your Business Location
You are legally required to have a Registered Agent with a physical address in the state where your company is incorporated. If you formed a Delaware corporation or LLC, for instance, but your company is physically located in GA, you can use us as an RA to satisfy Delaware’s requirement.
You Want to Avoid the Risk of Non-Compliance
Compliance matters may not be your interest; however, it is our area of expertise. We are intimately familiar with state & federal regulations | deadlines. We help you meet compliance, avoid unnecessary penalty fees & maintain your company’s good standing in your formation state.
Register Your SOS In Atlanta
Let TBOE Register Your SOS for You to Ensure It’s 100% Correct
Register Your SOS Outside of Atlanta
File Organizational Paperwork With Other States You Operate In
Make sure you can legally operate your business in other states.
You should also consider registering with the SOS in states outside of our “domestic” or “resident” state. For instance, if you want to take advantage of conducting business in other states and/or opening business checking accounts in other states (to increase business credit and funding options).
To do so, you need to register your business as a “foreign entity” in those states. A “foreign entity” Registration refers to the process of registering to do business in a state besides the one in which you formed. This is also known as a “certificate of authority,” a “foreign qualification,” or a “certificate of registration.”
By completing the formation process, you will have the right to represent yourself and your business interests in that jurisdiction. It’s as simple as filing LLC paperwork similar to what you filed in your “resident” or “domestic” state with your SOS. Fees, annual registration etc. apply for each state.
In most states, LLC’s are easy to setup and maintain. However, it is important to fill the paperwork out properly and have your Operating Agreement showing you have the right as a member to do so.
Understand The Difference Between Domestic & Foreign
While you will only file “Articles of Incorporation” or “Articles of Organization” in only ONE state, you can file foreign entity registration in as many states in which you plan to conduct business.
Establish your Operating Agreement
List the Members of your Organization
The purpose of the operating agreement is to spell out who the member(s) are and what percentage of the LLC they own, also known as their “membership interest”. The absence of an operating agreement means that your business has to be run according to the default rules of your state.
- In some states, the operating agreement is required as part of establishing the business entity.
- It also defines how the LLC is managed, how taxes are paid, and how profits and losses are distributed amongst the member(s).
- An LLC can be owned by one person (called a single-member LLC) or by 2 or more people (called a multi-member LLC).
The purpose of the document is to govern the internal operations of the business in a way that suits the specific needs of the business owners.
To take full advantage of having an LLC, you should write an operating agreement during the startup process. Many tend to overlook this crucial document since it is not a mandatory requirement in many states. Some states, such as California, Missouri, and New York do require it.
Having an operating agreement establishes a legal boundary between the LLC and the owner, so that the owner is not held accountable for the LLC’s debts or liabilities. Otherwise, creditors to the LLC may pursue the owner’s personal assets. Though it’s best to do in the initial stages, if you have missed on that, it’s never too late to put it in place.
#9: Reserve Your Social Media Handles
Ensure Your Social Media Handles Are All the Same
Once you have established your company name, you should go to all social media platforms and lock in your company name exactly or close to exactly how it is registered with the SOS (or your DBA).
One goal is to aim to have all business social media handles the same across all social media.
As The Business Owner’s Emporium, @bizownemporium is the same across IG, FB, Twitter, TikTok and YT. It’s also the same as our website: www.bizownemporium.com.
Twitter has the least amount of letters allowed in their handle, so do that one first, if this is your goal.
Check!
Go to “Namecheckr” and “BrandSnag” to type in variations of your business name. See if it’s available across all SM platforms (or just some).
Double Check!
Then (don’t forget this step) you want to double-check by looking on the actual SM platforms to ensure those handles are actually available.
Secure It!
Most important step! Immediately register those names on each SM platform. Don’t wait even one day or else another business may snag it.
Separate Your Business Finances
Opening a business bank account is one of the most important things you can do to solidify the separation of your personal assets from the debts and liabilities of your company. You ultimately need at least 3 business acounts: Revenue, Expense and Tax Payment account.
When applying for credit, grants or a government contract, entrepreneurs need to be able to provide documentation of paying yourself. This is true whether for a single or multiple member LLC, one with or without staff. When applying for credit, grants or a government contract, entrepreneurs need to be able to provide documentation of paying themself. This is true whether for a single or multiple member LLC, one with or without staff. We set you up with an inexpensive & automated option.
Click Here for set you up with an inexpensive & automated option for single-member payroll..