Starting A Small Business Checklist: Paperwork, Legalities, And Tax Requirements

Key takeaways

• Choose a business structure early, because it shapes your taxes, liability, and paperwork.
• Apply for a federal EIN and any state tax IDs before you hire or open a bank account.
• Secure the right licenses, permits, and insurance for your industry and location.
• Keep business and personal finances separate, and set up bookkeeping from day one.

Choose a name for your business (DBA)

A DBA, or doing business as, is the public name your business operates under. Deciding on a name is a crucial step, because it reflects what your business is about and appears everywhere, including business documents, advertising, and tax filings. The requirements for registering your DBA vary by your business structure and location, so check with your state and local government offices and websites.

Before you select a business name, make sure it is not taken. Most states have online databases to help. Visit your Secretary of State to check if your business name is free and learn how to register it. Also, check with the US Patent and Trademark Office to make sure your name is not trademarked or in use in another state.

Once you choose a name, you will want to protect it. Even if you do not build a website right away, reserve your name and register your site. Check availability at a domain registrar and reserve it. You may also want to trademark your name, depending on your business.

Choose a business structure and register your business

Your business structure is the legal setup of your company. It shapes your taxes, personal liability, and the forms you file, so it is worth getting right early. According to the IRS, your form of business determines which income tax return form you file. The common forms are the sole proprietorship, partnership, corporation, S corporation, and limited liability company (LLC).

You will need to determine which structure is best for your small business, since it also influences deductions. Consult with a professional to weigh the pros and cons of each. Most small businesses choose a sole proprietorship, a partnership, or an LLC.

Get your federal and state tax IDs

No matter which business structure you choose, you will likely need a federal EIN, also called a Federal Tax ID. You can get an EIN directly from the IRS for free. To apply, fill out an SS-4 or apply online.

Some states also require you to register at the state level and create a State Tax ID. For a State Tax ID, visit your state’s website. You may also need to register your small business locally, so visit your local government website to understand how to proceed.

The IRS offers free guides for new businesses:

• IRS Publication 583, Starting a Business and Keeping Records
• IRS Publication 334, Tax Guide for Small Business
• IRS Tax Calendar for Businesses and Self-Employed

Apply for licenses and permits

Many small businesses need licenses or permits before they can open. What you need depends on your industry, your location, and the type of work you do. A home bakery, a construction firm, and an online shop each face different rules.

Check requirements at the federal, state, and local levels, since each can apply its own. Your state and local government websites are the best place to start. When you are unsure, ask a professional so you do not miss a required permit.

Open a business bank account

A business bank account keeps your business money separate from your personal money. That separation makes bookkeeping cleaner, simplifies taxes, and helps protect your personal liability under certain structures.

Banks typically ask for a few documents to open the account. In most cases, that includes your EIN and your business registration paperwork. Call ahead or check the bank’s website so you can bring the right items with you.

Set up your bookkeeping from the start

Track your income and expenses from day one. Clean records make tax time faster, reduce filing errors, and give you a clear view of how your business is doing.

Early on, pick an accounting method and a tool that fits how you work. Melio syncs bill payments with accounting tools like QuickBooks and Xero, which can help keep your books up to date. Choose the setup that matches your needs, and consult a professional if you are unsure.

Get insurance for your small business

Insurance protects your small business from costs that could otherwise set you back. The right mix depends on your industry, your location, and whether you have employees.

Talk to a licensed insurance provider about the coverage you need. Many owners start with general liability, plus any coverage your state requires. A provider can help you match a policy to your specific business.

File taxes and insurance for employees

If you plan to hire employees, make sure you file the correct tax and insurance forms. Use the W-2 Wage and Tax Statement form for employees who receive a wage, salary, or other compensation.

• Workers’ compensation insurance covers your employee in case they are injured while on the job. Consult your business insurance provider about the right policy.
• Unemployment insurance covers your employees in case of job loss or termination and is paid as part of your payroll tax.
• Disability insurance gives your employee a percentage of their income if they are injured or become ill and cannot work for a period of time.

Note: If you hire contractors, freelancers, or other service providers, you report their pay on a Form 1099-NEC, not a 1099-MISC. Beginning with payments made in 2026, the reporting threshold rose from $600 to $2,000 per payee. Melio helps you classify and export a CSV file of all payments relevant to your 1099 forms, making it easier to prepare your taxes.

Get your small business started

Opening a small business means there is a lot to do to get started. Making time to organize the paperwork and get your ducks in a row now will free you from future problems and help build a foundation for long-lasting success. Get out there, put in the work, and remember to have fun. Sign up for Melio to manage your business bill payments in one place.

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