Will 2022 be the year you launch your business?
If you already have your “why,” business plan, and name, it’s time to move to the next phase – the legalities.
Follow these 3 steps to start your business today!
Starting your own business doesn’t have to be complicated, but you will have to take a few more steps to legally become a company. From forming a limited liability company to setting up a bank account, here’s everything you need to start a business in 2022.
1. Form an LLC
A small business can only get limited liability protection by forming an LLC.
Why does limited liability protection matter? Liability protection protects the owners’ assets by separating business owners’ assets and those belonging to the business. In other words, forming an LLC will help protect your personal assets like cars or homes that could otherwise be seized or impacted as an incorporated entity in the event of an unforeseen circumstance like debt or a lawsuit.
Set up a limited liability company (LLC) with LegalZoom. LegalZoom works with small businesses across the country, and plans start at just $79.
2. Obtain a Tax ID
Next, it’s time to apply for an Employer Identification Number (EIN). The Internal Revenue Service (IRS) will issue you a nine-digit number (EIN) to identify employer tax accounts if you form an LLC. You need an EIN to pay federal taxes, hire workers, open a bank account, and apply for business licenses or permits.
Tip: If you choose to act as the sole proprietor, you still need to file an EIN application to get a tax ID.
Applying for an EIN is a free service provided by the IRS. You can get a tax ID number by applying online, by fax, mail, or over the phone. Apply for an EIN here to get started. You can get your number the same day or the next business day with an online application. The process is around four days and four weeks through the mail by fax.
3. Set up a Bank Account
Once you have an EIN, you can open a business bank account to grow your business. Use this account to keep track of expenses, simplify tax reporting, and deposit payments under your company name.
Run your business more efficiently with a Business Banking Account at Bank of America. Business Advantage Banking accounts at Bank of America are created especially for business owners with tools, services, and customized support.
Other Things to Consider
Congratulations! You’re on your way to a successful 2022. Now that you have the big legalities out of the way, think about filing for a registered trademark if your business has a unique name, slogan, design, or logo associated with it. This way, no one can attempt to use or plagiarize the trademark without your consent.
Another thing to consider is acquiring business insurance. You can never be over-prepared for those ‘in case of emergency’ moments. Look into the different types of business insurance to help give you more peace of mind.