Resource Center / Small Business

Why You Should Register Your Business

Written by Live Oak Bank

Why You Should Register Your Business

Registering your business is a smart move for many small businesses. While it isn’t necessarily required, registering your business will give you distinction in the marketplace as well as many other advantages. Registration gives your business a unique identity and can offer tax benefits, legal benefits, protection from personal liability and better access to banking, loans and capital.

From simply registering your business name to registering with various state and federal agencies, you will discover the advantages as you navigate the requirements. Registering your business is not hard to do, and you will find the benefits more than make up for the time and effort you put into the registration process.



Registering your business establishes your company as a legitimate contender in the marketplace. It indicates that your company is here to stay, which gives your clients reassurance that you are reliable and committed to longevity. Even if you are operating your business under your personal name, having the distinction of being a registered business adds credibility to your venture. Having that official registration will significantly improve your company’s reputation.


Name Protection

You have likely put lots of thought and time into selecting your company name. By registering your business name, you are helping protect your company’s identity and secure it for the future. This will help ensure that no one takes your name or that a competitor will try to operate with the same name. It also helps protect your brand identity. If you have a unique logo or slogan, you can also file for a trademark to protect that from being copied or stolen.


Liability Protection

Ideally, you want to keep your personal assets and finances separate from your business finances. Registration establishes your business as its own legal entity. This can help protect your personal assets in case your company goes into debt or faces other liabilities—if, for example, you are sued one day. Having that separation will help protect your personal assets from creditors and lawsuits.


Legal Benefits

Registration with the appropriate agencies helps you remain compliant with federal, state and local regulations. By properly registering your business, you can demonstrate that you are following the appropriate laws and will be viewed as a legitimate operating business in the case of a lawsuit.


Tax Benefits

By registering your company, you get to choose what type of business you are operating. By reviewing the types of businesses—sole proprietorship, partnership, corporation, or limited liability company (LLC)—you can decide which best suits your company. This allows you to decide what type of business you are rather than the government deciding what type you are by default.

When registered with the IRS, your business will be assigned an Employer Identifying Number (EIN), which is required if you are hiring employees. The EIN establishes your business a legitimate legal entity with the appropriate tax status. The EIN is required for compliance with bookkeeping and accounting regulations. Following these regulations demonstrates that your business is paying taxes, that employees are covered under the appropriate insurance and that your company is properly reporting income to the government.

There are also many other tax benefits depending on the type of business you conduct, such as insurance premium deductions, deferred tax payments, and income splitting. The type of designation you select will impact your ability to take tax deductions and could allow you the possibility to reap the benefits of small business incentives.*


Business Banking

You will need to show that your company is properly registered if you choose to open a business banking account, like Live Oak Bank’s business savings and business checking options. Opening such an account is a smart business move. For one, it helps you stay legally compliant with your accounting. It also protects you by keeping your personal activities separate from your business activities. Business banking also offers more security for your company—for example, you can apply for a line of credit to be used in emergency situations or for pressing business needs. Establishing a credit card account can help you with preliminary purchases as well as set up credit history for your company.

Furthermore, business banking provides benefits to your customers and employees. For example, including merchant services offers purchase protection and keeps customers’ personal information secure. And, of course, giving your clients a business name for payment purposes instead of your own name is viewed as more professional.


Access to Capital

If you decide to apply for loans, banks will require that you are a registered business. And if you seek investment capital, you will find that investors prefer to invest in businesses that are properly registered. It is easier to secure capital if you are a legitimate company.


Employee Management

Operating as a registered business helps streamline the management of your employees. You can hire employees and issue paychecks according to the law. Registering in your state will also allow you to collect state taxes for your employees.


Conducting Business

There are areas of business where registration is required or entitles you to other perks. For example, if your company is applying for government contracts, you are required to be registered. By registering your business, you might also be entitled to supplier discounts to which you might not otherwise have access. Wholesale rates are often only available for registered businesses. Having the official paperwork is required for these situations.


Once you decide to register your business and reap all these benefits, you’ll need to determine how and where to register. You may register as a sole proprietorship, partnership, corporation, or limited liability company (LLC). We break all that down and help you make the right decision in our How Should You Register Your Business article. You can also download our complete guide.


Guide To Registering Your Business




*Live Oak Bank does not provide tax advice. Please consult with your accountant.

Guide To Registering Your Business

Download our Registering Your Business Guide to learn all of those advantages and decide which of the four main designations is best for your business.

Subscribe via Email

We're committed to your privacy. Live Oak Bank uses the information you provide to us to contact you about our relevant content, products, and services. You may unsubscribe from these communications at any time. For more information, check out our privacy policy.