For entrepreneurs, that moment of landing on an innovative business idea can be magical – and represents the beginning of a potentially transformative journey. From January through November 2025, the US Census Bureau recorded 5,125,775 new business application filings in the country. The subsequent steps, while not as exciting, are just as significant. Formally registering a company, for instance, may seem mundane, yet it's the foundation that ensures the legal and financial security of your burgeoning venture. Registering your company provides your business operations with a legal foundation and opens doors to several financial benefits and protections that an unregistered business cannot access.

Though this process may appear daunting at first, it's manageable when you divide it into small parts. By ensuring your company stands on solid legal ground, you're setting the stage for growth and expansion while protecting it against potential liabilities and legal disputes. Here are the key steps of the process.

What's in this article?

• What does it mean to register a company?
  
• How to register a company
  
• How much does it cost to register a company?
  
• Why is it important to register your company?
  
• How Stripe Atlas can help
  

What does it mean to register a company?

Registering a company in the US is the process of establishing a business entity formally and legally within a specific jurisdiction. This process generally involves recording the business's details with a government agency, thereby granting the business recognition as a legal entity that is separate from its owners. The registration allows the company to conduct business legally, assume liability and enter into contracts, while providing certain protections under the law. It also subjects the company to specific tax obligations and reporting requirements.

How to register a company in the US

To ensure a solid foundation for your new business, you need to register your company, a process that formalises your business's legal existence and provides a basis for many other aspects of business operation. The registration process might appear complex at first, but it becomes manageable when you divide it into individual steps.

Here are the steps to register a company in the US:

1. Choose a business structure

Before you can register your company, you need to decide on a business structure. Options include sole proprietorship, partnership, limited liability company (LLC), corporation, or nonprofit. The type of structure you choose will affect your company's operations, taxes, and the legal obligations of the owners.

2. Select and register a business name

You'll need to choose a unique name for your business, one that is not being used in your jurisdiction. Many state and local governments provide an online tool to check for name availability. Once you have chosen a name, you can register it with the relevant government agency. In some jurisdictions, you may also need to publish the name in a newspaper.

3. File formation documents and pay state fees

Depending on your business structure, you'll need to file certain documents to officially establish the business. For example, if you're setting up a corporation, you'll need to file articles of incorporation. If you're setting up an LLC, you'll need to file an operating agreement. These documents detail the purpose of the business, its operational structure, and the rights and responsibilities of the owners. Usually, there are fees associated with registering a business. These fees will vary depending on your jurisdiction and the type of business structure you choose. Depending on your jurisdiction and the nature of your business, you may also need to register for certain state and local taxes, such as sales tax, unemployment insurance tax, and state income tax.

4. Obtain an employer identification number (EIN)

In many countries, you'll need to get a tax identification number for your business. In the US, this is an employer identification number (EIN), and the IRS uses it to track your business's tax obligations.

5. Apply for required licenses and permits

Depending on the nature of your business, you might need to obtain specific permits or licenses to operate legally. This could include a sales tax license, health department permits, or a professional license.

After you complete these steps, your business is considered legally registered, and you're ready to begin operations.

How much does it cost to register a company?

The cost of registering a company depends on your business structure and the state where you're filing. For a simple business name registration, fees are relatively modest, typically ranging from US$10 to over US$100 depending on the state or county. If you're forming a limited liability company (LLC), expect to pay a state filing fee between US$50 and US$500, with states such as Kentucky and Mississippi on the lower end (about US$40 – US$50) and states such as Massachusetts and Illinois charging US$500 or more. Corporation formation fees follow a similar range – generally US$50 to US$300 for most states – though some states calculate fees based on the number of authorised shares, which can push costs higher for larger entities.

Beyond the initial filing fee, there are often additional costs to factor into your budget. Many states require a registered agent, which can cost US$50 to US$300 per year if you use a professional service. Some states also charge annual report or franchise tax fees to keep your business in good standing, ranging from a flat US$25 to several hundred dollars annually. If you work with an attorney or formation service to handle the paperwork, professional fees can add another US$100 to US$1,000 or more to your total. All told, many small business owners can expect to spend anywhere from US$50 to US$1,500 to get a company properly registered, depending on the state, structure, and level of professional assistance they choose.

Why is it important to register a company?

Registering a company is important for several reasons:

• Protect your personal assets: Registering a company creates a separate legal entity, distinct from the individuals who own and manage it. This legal separation is particularly beneficial when it comes to liability. If the company incurs debt or is sued, in most circumstances, the personal assets of the owners or shareholders (such as their homes, cars, and personal bank accounts) are protected and cannot be used to settle the company's debts. This protection, known as the "corporate veil," is a key benefit for business owners.

• Secure your brand name: When you register your company, you secure your business name within your jurisdiction. This means no other business can register under the same name in that region, which helps protect your brand identity and prevent confusion among customers. It's important to note that registering your company doesn't replace trademark registration, which offers more comprehensive brand protection nationally or even internationally, but it's a key first step.

• Build credibility with customers and partners: Registered businesses are often perceived as more legitimate and trustworthy than unregistered businesses. Customers, suppliers, and partners may feel more comfortable doing business with a company that is registered because it demonstrates a long-term commitment and a level of seriousness around the business venture. Moreover, some businesses will deal only with registered entities.

• Unlock financial services and funding: Most financial institutions require businesses to be registered before they can open bank accounts, apply for loans, or access other banking services. If you need to raise money, investors will, typically, expect your company to be legally registered before they invest. If the business is registered as a corporation, it has the ability to issue shares of stock, which can be an effective way to raise capital.

• Operate legally and stay compliant: Registering your company brings it into the formal economy, which includes benefits and responsibilities. On one hand, your company might qualify for certain business deductions, credits, or other tax advantages that can lower your overall tax burden. On the other hand, you'll need to comply with tax laws applicable to your type of business, which might involve paying corporate taxes, collecting sales tax, withholding income taxes for employees, and more. It's important to consult with a tax professional to understand the specific tax implications for your business.

• Enter into contracts and agreements: As a legal entity, a registered business can enter into contracts, lease property, and conduct other business activities in its own name. This is important for many aspects of running a business, such as signing a commercial lease, entering into agreements with suppliers, hiring employees, and negotiating deals with clients.

While there are significant benefits to registering a company, it also requires fulfilling certain obligations and responsibilities. These may include annual reporting to the relevant authorities, maintaining accurate financial records, and complying with business laws and regulations. As a result, it's wise to seek professional advice to fully understand what registration means for the business and situation in question.

How Stripe Atlas can help

Stripe Atlas sets up your company's legal foundations so you can fundraise, open a bank account and accept payments within two business days from anywhere in the world.

Join 75K+ companies incorporated using Atlas, including startups backed by top investors like Y Combinator, a16z and General Catalyst.

Applying to Atlas

Applying to form a company with Atlas takes less than 10 minutes. You'll choose your company structure, instantly confirm whether your company name is available and add up to four co-founders. You'll also decide how to split equity, reserve a pool of equity for future investors and employees, appoint officers and then e-sign all your documents. Any co-founders will receive emails inviting them to e-sign their documents, too.

Accepting payments and banking before your EIN arrives

After forming your company, Atlas files for your EIN. Founders with a US Social Security number, address and mobile phone number are eligible for IRS expedited processing, while others will receive standard processing, which can take a little longer. Additionally, Atlas enables pre-EIN payments and banking, so you can start accepting payments and making transactions before your EIN arrives.

Cashless founder stock purchase

Founders can purchase initial shares using their intellectual property (e.g. copyrights or patents) instead of cash, with proof of purchase stored in your Atlas Dashboard. Your IP must be valued at $100 or less to use this feature; if you own IP above that value, consult a lawyer before proceeding.

Automatic 83(b) tax election filing

Founders can file an 83(b) tax election to reduce personal income taxes. Atlas will file it for you – whether you are a US or non-US founder – with USPS Certified Mail and tracking. You'll receive a signed 83(b) election and proof of filing directly in the Stripe Dashboard.

World-class company legal documents

Atlas provides all the legal documents you need to start running your company. Atlas C corp documents are built in collaboration with Cooley, one of the world's leading venture capital law firms. These documents are designed to help you fundraise immediately and ensure your company is legally protected, covering aspects like ownership structure, equity distribution and tax compliance.

A free year of Stripe Payments, plus $50K in partner credits and discounts

Atlas collaborates with top-tier partners to give founders exclusive discounts and credits. These include discounts on essential tools for engineering, tax, finance, compliance and operations from industry leaders like AWS, Carta and Perplexity. We also provide you with your required Delaware registered agent for free in your first year. Plus, as an Atlas user, you'll access additional Stripe benefits, including up to a year of free payment processing for up to $100K in payments volume.

Learn more about how Atlas can help you set up your new business quickly and easily and get started today.