Module 04 of 10
Registering your business
Registration makes your business officially exist in the eyes of the government. For physical businesses, this step happens early — often before you sign a lease, apply for permits, or open a business bank account. The process is the same for all business types, but the timing and what triggers it varies significantly.
When to register — by business type
Retail and storefront businesses
Register before signing your lease. Most landlords require proof of a legal entity before they'll execute a commercial lease. Your LLC also needs to be in place before you can open a business bank account for your security deposit.
Market and pop-up vendors
Register before your first market appearance. Many market managers require proof of a business entity and insurance before approving your application. Food vendors face additional permit requirements that require a legal entity to apply under.
Physical service businesses
Register before accepting your first client payment. If you're operating from a leased space, same timing as retail — the landlord will require it. If mobile (e.g. in-home massage, mobile grooming), register before your first booking.
Trades and contractors
Register as early as possible — ideally before applying for your contractor's license. In many states, a contractor's license must be held by a legal entity. Some commercial clients and GCs require proof of LLC before issuing a subcontract.
THE SHORT ANSWER
For any physical or trades business, register before you take your first customer, sign anything, or apply for any license or permit. There is no practical downside to registering early and significant downside to operating without a legal structure.
In this Module
Shen to register
Registration steps
What it costs
Real-world examples
Related Modules
Choosing a legal structure
Naming your business
Setting up finances
The registration steps
Confirm your business name is available. Search your state's Secretary of State business name database before filing. Your LLC name must be unique in your state. If you want to operate under a different name (e.g., your LLC is "Smith Home Services LLC" but you operate as "GreenEdge Lawn Care"), you'll also need a DBA — covered in Module 07.
File your Articles of Organization. This is the formation document for an LLC. File online through your state's Secretary of State website. Most states process in 1–5 business days; some offer same-day processing for an additional fee. You'll receive a stamped copy — keep it. Your landlord, bank, and licensing agencies will ask for it.
Create your Operating Agreement. Not always legally required, but always recommended. It documents ownership percentages, how decisions are made, how profits are distributed, and what happens if an owner leaves. For single-member LLCs, a simple template works. For multi-owner businesses or any trades business with a partner, use a local attorney — $300–$500 is worth it.
Get your EIN from the IRS. Free at IRS.gov — takes about 10 minutes and you receive it immediately. You need it to open a business bank account, apply for licenses, hire employees, and file taxes. Never pay a third-party service for an EIN — there is no legitimate reason to.
Register for state taxes if required. Most physical businesses that sell taxable goods need a state sales tax permit. Service businesses may or may not — depends on your state and service type. Check your state's Department of Revenue website. Trades businesses that purchase materials for resale or installation may need a resale certificate to buy materials tax-free.
Register with your local government if required. Many cities and counties require a general business license or business tax certificate just to operate — separate from any industry-specific license. Check your city clerk or city hall website. Trades businesses operating across multiple municipalities may need to register in each one.
What it typically costs
$0
EIN from teh IRS — always free, never pay a third party.
$50 - $500
State LLC filing fee — varies widely by state.
$0 - $500
Operating agreement — template (free) or attorney ($300 - $500).
WATCH OUT FOR
Third-party "LLC formation services" that charge $100–$300 on top of the state filing fee. They file the same paperwork you can file yourself directly on your state's Secretary of State website in 20–30 minutes. The state fee is the same either way.
Real-world examples
James — neighborhood hardware and paint store
Retail, pre-lease registration
James found his ideal retail space and moved quickly. His attorney advised registering the LLC before signing anything. He filed online on a Tuesday, received his stamped Articles of Organization on Thursday, got his EIN on Friday, and opened his business checking account the following Monday. His landlord required all three documents to execute the lease. The whole process took one week and cost $175 in state fees.
One week from filing to signed lease — the process is faster than most expect
Tom — fence installation and hardscaping
Trades, registration tied to contractor license
Tom had been doing fence work as a sole proprietor for two years before a large HOA contract required proof of LLC, contractor license, and insurance. He'd been operating illegally in his state — contractor work above $10,000 required a licensed entity. He formed his LLC, passed his state contractor exam, and secured his license over 3 months. He got the contract — but the delay cost him a full season of commercial work he could have been doing earlier.
Two years too late — trades businesses should register before taking their first job