Learn the complete legal process for starting your own business in the USA — from registration and licensing to tax setup, compliance, and protection. A step-by-step guide for new entrepreneurs and investors.

Starting a business in the United States can be one of the most rewarding decisions of your life — but before you launch, it’s vital to understand the legal process that ensures your business is legitimate, protected, and positioned for success.

Whether you’re a U.S. citizen or an international entrepreneur, following the right legal steps will save you from future headaches and build a solid foundation for your brand.

1. Choose the Right Business Structure

Your first step is deciding how your business will operate legally. The main types of business structures in the U.S. include:

• Sole Proprietorship – Simple to set up; owned and operated by one person.

• Partnership – Shared ownership between two or more people.

• Limited Liability Company (LLC) – Offers liability protection with flexible tax benefits.

• Corporation (C-Corp or S-Corp) – Ideal for larger businesses seeking investment or going public.

Choosing the right structure affects your taxes, liability, and legal obligations, so it’s wise to consult a legal or tax expert before registering.

2. Register Your Business Name

After choosing your structure, the next step is registering your business name — often called a Doing Business As (DBA) or Trade Name.

This registration ensures no one else in your state can legally operate under the same name.

You can check availability and register your business name through your state’s Secretary of State website or the U.S. Patent and Trademark Office (USPTO) if you want national trademark protection.

3. Obtain a Federal Employer Identification Number (EIN)

An EIN, issued by the Internal Revenue Service (IRS), acts like a Social Security number for your business.

You’ll need it to:

• Open a business bank account

• File taxes

• Hire employees

• Apply for business licenses or permits

You can apply for an EIN free of charge on the official IRS website.

4. Register with State and Local Authorities

Each U.S. state has its own rules for business registration. Depending on where you operate, you may need to:

• Register with your state revenue agency for tax purposes

Obtain a sales tax permit

• File a Certificate of Formation or Incorporation (for LLCs or corporations)

• Register as a foreign entity if you’re doing business across state lines

• Always check with your state’s business registration portal for specific requirements.

5. Obtain Necessary Business Licenses and Permits

Depending on your industry and location, you may need federal, state, or local licenses before opening your doors. Examples include:

• Health and safety permits (for restaurants or salons)

• Professional licenses (for legal, medical, or accounting services)

• Import/export licenses (for international trade)

You can use the U.S. Small Business Administration (SBA) License and Permit Finder to determine which permits apply to your business.

6. Open a Business Bank Account

Once your business is legally registered, open a separate bank account under your business name.

This keeps your finances organized, protects your personal assets, and helps build business credit — which is essential when seeking loans or investors.

7. Understand and Comply with Tax Obligations

Different structures have different tax requirements. Common U.S. business taxes include:

• Federal income tax

• State income tax

• Employment tax (if you have staff)

• Sales tax (for product-based businesses)

Work with a certified accountant or tax consultant to ensure compliance and take advantage of any deductions or credits available to you.

8. Protect Your Business Legally

Legal protection safeguards your brand, ideas, and operations. Key steps include:

• Trademark registration for your business name or logo

• Contracts and agreements for clients, employees, and suppliers

• Insurance coverage, such as general liability or workers’ compensation

• Privacy policies and terms of service (for online businesses)

These protect you from disputes, lawsuits, or loss.

9. Maintain Ongoing Compliance

After setting up your business, you must stay compliant by:

• Renewing business licenses annually

• Filing required tax returns and reports

• Keeping accurate financial records

• Following labor and safety regulations

Regular compliance ensures your business remains in good standing and avoids penalties or suspension.

10. Consider Immigration and Ownership Laws (For Foreign Entrepreneurs)

If you’re not a U.S. citizen, you can still legally start a business in the USA.

However, you’ll need to understand:

• Visa options (such as E-2 Investor Visa or L-1 Visa)

• Rules for owning vs. working in your business

• Requirements for opening a U.S. bank account as a foreigner

Consult an immigration lawyer to guide you through these legal details.

Starting your own business in the United States involves more than just a great idea — it requires legal precision, proper registration, and ongoing compliance.

By following these steps carefully, you not only avoid legal trouble but also build a business that can grow confidently in one of the world’s most competitive markets.