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Do I Need To Register My Business?

by Skyldust
12 replies
I did web design work as a freelancer and now I decided it would be more profitable to start a company. I have no business partners yet, but I do intend on hiring after the business gains some traction. I've already set up a website and planned everything out. On the site, I referred to myself as a company (which I do intend to become), but I am not registered. Would that be a problem? If so, what steps would I have to take.

I live in NJ.
#business #register
  • Profile picture of the author Carsten Tiensuu
    To run a business and show that you are legit to future business partners, you need to register your company. Business partners would try to do a background research on you, and if you do not show up anywhere no one will work with you if they are professional.

    I wish you luck with your company, seems like a good idea.
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    • Profile picture of the author Skyldust
      Thanks.

      I decided to split the difference and clearly state that I'm a freelancer on the site, but keep the business URL
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    • Profile picture of the author DonaldElder
      Originally Posted by Carsten Tiensuu View Post

      To run a business and show that you are legit to future business partners, you need to register your company. Business partners would try to do a background research on you, and if you do not show up anywhere no one will work with you if they are professional.

      I wish you luck with your company, seems like a good idea.
      Exactly, to run any business you have to register your company first. You will got your correct business partner, when you will show your presence in the market. So, before thinking about any other factors, first make your business registered.
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  • Profile picture of the author angiecolee
    Talk to a small Biz attorney.

    At least in California, you have to be registered if you're taking money from someone else in exchange for services, and that includes freelancers. Plus there's Uncle Sam to consider. The IRS gets kinda crabby if they think you've stiffed them.
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  • Profile picture of the author gjabiz
    Originally Posted by Skyldust View Post

    I did web design work as a freelancer and now I decided it would be more profitable to start a company. I have no business partners yet, but I do intend on hiring after the business gains some traction. I've already set up a website and planned everything out. On the site, I referred to myself as a company (which I do intend to become), but I am not registered. Would that be a problem? If so, what steps would I have to take.

    I live in NJ.
    Some freelancers have companies, a simple Doing Business As (DBA) which satisfies the IRS which is the real reason for registering.

    A freelancer can then become a LLC, Subchapter S or a full blown Agency type (while remaining a one man band).

    Check with a NJ attorney in your home town, most consult for very small fees, or do your homework. The advantages to being "registered" are often as not, protection advantages for your personal assets, if something goes wrong.

    IF you have penciled this out, like you claim you have, then I would think knowing the route you want to take would be part of that planning, eh?

    gjabiz
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  • Profile picture of the author Triplescan
    Legally wise probably you should register but otherwise is not a problem. Only that the clients will expect you to do projects faster if you say you are a company it means that you are not the only one who does all the work. So advertise yourself as a freelancer for now and when you will have some business partners you can register. Good luck!
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  • Profile picture of the author flesterking
    which country are you from? its better to register atleast a small firm name - you have a lot of benefits by doing it.
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  • Profile picture of the author Tsnyder
    Originally Posted by Skyldust View Post

    I did web design work as a freelancer and now I decided it would be more profitable to start a company. I have no business partners yet, but I do intend on hiring after the business gains some traction. I've already set up a website and planned everything out. On the site, I referred to myself as a company (which I do intend to become), but I am not registered. Would that be a problem? If so, what steps would I have to take.

    I live in NJ.
    Any time you do business in a name other than the one
    on your birth certificate you need to go to your local county
    office building... probably the county recorder... and complete
    a fictitious name registration (DBA). This lets the world know
    that when they do business with "XYZ" company they're actually
    doing business with you.

    This actually has nothing to do with the IRS. It has everything to
    do with giving the public fair notice of who they're doing business
    with.

    P.S. This is true for every state in the United States. Other countries
    may have different rules. I noticed that the OP is in New Jersey.
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  • Profile picture of the author amenwolf
    I've got the doors closed in my face many times before.
    By just saying I'm a freelancer without a business.

    Some clients are just paranoid like that.. But I won't blame them.

    Anyways, having a registered business builds more trust.
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  • Profile picture of the author DWolfe
    Here is the direct link to the New Jersey Division of taxation site NJ Division of Taxation - Starting a Business in NJ This has the information you will need to fill out, if you are starting a new business in NJ.

    You should make sure you request the paper work 15 days before starting your business according to the site. You will also want ST-3's forms for business purchases.
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    • Profile picture of the author kilgore
      Whether or not you need to, the bigger question is should you and if so, how. As mentioned, you can do a DBA or incorporate as a company. I went the LLC route for a lot of reasons including:
      • I have a partner and need to be able to share ownership
      • I wanted the liability protection incorporation provides
      • I wanted to be able to separate the company's brand from my personal identity, which will hopefully make it easier to sell the company should I decide to go that route (and if someone wants to buy it!)
      • I love filling out forms for the government!!!
      That said, none of these may be important to you. For instance as a sole proprietor you may be able to get some liability protection as an addendum to your homeowner's insurance policy. But maybe not. And what would happen if you designed a website for a client, the site got hacked and they sued you? Perhaps unlikely, but not too far out there either.

      The advice above about talking to a small business attorney would certainly be your safest bet. At the very least I'd go to the library and try to find some books on the legal aspects of starting a business. Personally, I like the NOLO ones (e.g., Incorporate Your Business - Legal Books - Nolo) but there are plenty of others out there too.
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  • Profile picture of the author jordangracia
    I think yes, that's one of the rules right when it comes to building a business. A business permit is a must. But since we are doing online business, i'm not sure about that. I think you still have to register it before going online. That's my opinion at least.
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