How to Form a Company Online
Starting a business is not always easy. There are so many details to consider and tasks to complete, from writing your business plan to finding the right location for your office. Luckily for you, we've done all of that work for you. In this guide, we'll go through how to form a company online step-by-step so that you can get started on your new venture as soon as possible.
Find a Name
Choosing a name for your new company is an important step. It's the foundation upon which you will build your business, so spend some time thinking about what you want to convey to customers, investors, and potential employees.
If you already have a domain name that corresponds with the name of your company (e.g., www.examplecompanyname.com), then this part is easy, just make sure that it's available. If not, it's time to get creative. Think about what makes your business unique and how others might describe it in one or two words—this can help guide your choice of names in general terms rather than specific ones (e.g., "The Amazingly Amazing Company")
Find a Legal Structure
There are many options when it comes to forming a company. Here are the most common ones:
- Sole proprietorship: You own and operate the business by yourself.
- Partnership: You create an agreement with another person or multiple people, which states that you will be equal partners and share profits and losses.
- Corporation (C-corporation): This type of business structure is owned by shareholders who have limited liability for the debts of the company.
- S-corporation : Similar to a corporation but taxed under Subchapter S of Chapter 1 of Title 26 of U.S. Code (26 USC § 1361 through 26 USC § 1375), making it attractive for small businesses whose owners want minimal paperwork and taxes.
Handle Trademarks and Copyrights
- Make sure the name you want to use isn't already taken. Do a search at the US Patent and Trademark Office website, or even just Google it.
- Register your trademark with the USPTO if it's not already registered. You can do this online, but it costs more than $400 (as of this writing), so before you pay up, make sure there isn't another way to do it that doesn't cost so much money.
- Register your copyright with the US Copyright Office if you're creating an original work—like a book or painting—and want to protect yourself against copycats who might try to sell copies of what you've created without paying royalties on their sales.
Open a Bank Account
You'll need a bank account for your new company. There are many different types of accounts to choose from, but the most common is an ordinary savings account. You don't need to open this account through the company's website, instead, you can go into any local branch and ask for help setting up an account in person.
Obtain Licenses and Permits
Depending on your location, licenses and permits may be required to operate a business. If you're unsure, check with your local government to find out what kind of licenses and permits are necessary for your type of business.
You'll need the following:
- Business license (if required)
- Tax registration number (for most countries)
- Employer identification number for employees (for U.S.-based companies only)
Protect your Company with Insurance
Insurance is a way to protect yourself from financial loss. You may not be able to completely eliminate all risk, but insurance can help ensure you aren’t left out in the cold if something bad happens.
Insurance isn't a substitute for good risk management—it's an essential tool that helps minimize risk and prepare for situations that are out of your control. There are many different types of insurance, each protecting against different things: property damage or destruction; liability claims against you and your company; legal expenses in case someone sues you; theft or loss of equipment or materials; natural disasters like fire or floods; and more.
You'll need different amounts of various types of business insurance depending on the size and complexity of your company, how much money it makes each year (and whether it generates profit), where its location is located geographically (some states have stricter regulations than others), who will be working with them (employees vs contractors/vendors), etc. So we're going to focus on general guidelines here rather than specific numbers because they vary widely depending on these factors.
Write your Business Plan
Before you start looking for investors and hiring employees, it's important to write a business plan. Here are some things to keep in mind when writing your plan:
- Make sure that you include all of the necessary details. Investors will want to know exactly how you intend to make money, and this means providing a detailed breakdown of projected expenses and revenues, as well as market research on competitors' products or services.
- Don't forget the executive summary. The executive summary is supposed to be brief (between one-and-a-half pages) but gives an overview of why investing in your company is worth it (or not). Letting investors know what makes your company unique or different from others will help them decide whether or not they want to invest in it.
If you're looking to form a company online and need some help, we hope this guide has been helpful. While it's certainly not the only way to form a company online, these steps should get you started on your journey.
Starting your own company is exciting, but it can also be intimidating. You’ll need to make sure you have all the right paperwork in place and that you understand how everything works before launching your new venture.