How to Register Your Business Legally as a Freelancer in the United States

You’re ready. Finally. It’s your New Year’s resolution: starting a freelance business.

You’ve GOT THIS.

But then…you start trying to figure it out online and oh my gosh, there’s so much information. How do you make sure you’re doing it correctly?

My Corporate2Contract course breaks it down into the how but it also lists the pros and cons of different ways to register, if you should use your own name, have a business name, trademark, etc. 

But if you just want the basics, this post will  walk you through the process of legally registering your freelance business in the United States.

One fun thing to note - you don’t actually have to set up as a business in the US if you want to work as yourself as a freelancer. When a client sends you a W9, you only need to input your name and social number. I knew a consultant who did that and hadn’t registered legally.

However, that leaves no room for growth and certainly offers no government protection. I highly recommend registering your business.

Step 1: Choose Your Business Structure

The first decision you'll need to make is choosing the right business structure for your freelance venture. Freelancers often opt for a sole proprietorship or a single-member limited liability company (LLC). 

Sign up for the C2C course to learn more about the pros and cons and personal mistakes I made and why I chose to go the LLC route (it’s juicy).

Step 2: Choose Your Business Name

Selecting an appropriate name for your freelance business is crucial. It should be unique, professional, and relevant to your industry. The big question remains - do you use your own name? Or go for a business name that’s better for SEO?

Step 3: Register Your Business Name

Depending on your chosen business structure, you may need to register your business name with the appropriate authorities. If you're operating as a sole proprietorship and using your legal name, you typically don't need to register a business name separately. However, if you choose to use a different name for your business, you may need to file a "doing business as" (DBA) or a fictitious name registration with your local government/town hall.

If you're forming an LLC, you'll need to register your business name with your state's Secretary of State office. This step ensures that no other business in your state can use the same name. It’s more expensive - something to keep in mind - but the advantages of an LLC is that you can also register it in a different state than your own.

Step 4: Obtain an Employer Identification Number (EIN)

An Employer Identification Number (EIN), also known as a Federal Tax Identification Number, is required for tax purposes. You can obtain an EIN from the IRS for free. 

Yes, FOR FREE.

Don’t fall for scams out there that try to get your money to do it for you! Use this link to get one.

Even if you're a sole proprietor, having an EIN can help protect your Social Security number and make it easier to open a business bank account.

Step 5: Register for State and Local Taxes

Depending on your location and the nature of your freelance work, you may need to register for state and local taxes. This includes sales tax, use tax, and other business-related taxes. Check with your state and local tax authorities to determine your tax obligations.

Every state is different with this! It’s important to look up your local state laws.

Step 6: Open a Business Bank Account

Though optional, I highly recommend separating your personal and business finances, and if you’re an LLC, it’s required. Open a business bank account in your business name to track income and expenses accurately.

I know, there’s quite a few steps with setting yourself up, but make sure you do this correctly to ensure that your business is compliant and protected. Don’t forget - if you happen to get a client in the next few minutes (lucky you), you can just fill in your name and social and go that route…but not highly recommended.

By following the steps outlined in this guide, you can set up your freelance business on solid legal ground, allowing you to focus on what you do best – providing top-notch freelance services. Remember that consulting with a legal or financial professional can provide further guidance tailored to your specific situation.