A Step-by-Step Guide to Register your E-Commerce Business
As an entity providing services or products to consumers, it is your legal obligation to register your e-commerce to acquire the licit rights to operate and be protected against potential lawsuits.
How to register e-commerce business in USA
1. Identify your legal structure
This is the primary step to registering your e-commerce company.
The category your business falls under will dictate your legal and financial obligations permanently. Here are the types of e-commerce business structures you should know:
- Sole Proprietorship or Partnership
- Limited Liability Corporation
- S Corporation
All requirements, taxes, and liabilities have their respective benefits and drawbacks so consider consulting a lawyer or a professional when selecting the best option for your business.
2. Register by state
There are variations in taxation when it comes to state levels, but if you're a sole proprietor or in a general partnership, there's no need to register by state- unless you're filing a DBA to operate under a business name.
Take note that you should register at the state where you formed the business, and you need to qualify or register as a foreign business entity at the state where you plan to offer your products/ services.
You should also have a unique business name to avoid infringement of other business trademarks. You can check it on the US Trademark Database.
3. Register locally
On a local level, permits are the main focus. These documents are what legalize your operations within your city and your state.
Do you need a license for e-commerce? Yes. In fact, there are different licenses to obtain before your company is up and running.
- Business Operation License
- Home Occupation Permit
- Occupational License
- Seller's Permit
- Sales Tax License
4. Applying for Employer Identification Number (EIN)
The EIN or Employer Identification Number is the equivalent of a social security for your e-commerce. The IRS issues this for tax and reporting purposes , and is also required by most financial institutions before opening a business account.
When you register an e-commerce business nowadays, the process is evidently more attainable compared to brick-and-mortar companies. In addition, when you do so, it gives a guarantee of full compliance as your operations scale over time.
Let us help you get your e-commerce entity in the right footing. D&V Philippines offers e-commerce finance and accounting solutions to startups who want to stay on top of their finances. You can grab our copy of our guide D&V Philippines Finance & Accounting Solutions for E-Commerce Businesses to know more about our specialized solutions or contact us today for a free consultation.