This is the seventh part of a multi-part series that will help prospective entrepreneurs to develop the tools they need for a successful business venture.

Now that you’ve picked the perfect name for your new business, it’s time to make it official by taking the next step: registering your business. This is determined by your location and business structure.

Most small businesses simply need to register their business name with state and local governments. If you conduct business as yourself using your legal name, you don’t need to register at all. However, if you don’t register your business, you could miss out on personal liability protection and legal and tax benefits.

The process of registering your business in Alabama begins at the Alabama Department of Revenue website. My Alabama Taxes (MAT) is a one stop shop for filing tax returns, making payments, viewing letters, managing accounts, and other transactions with the state.

Prior to application, it is necessary to have your information on hand, including your legal name, the location of your business, contact information, the start date of your business, and the North American Industry Classification System (NAICS) code. If you’re not registering as an individual, you’ll also need officer/owner information, your federal employer identification number, date of organization or qualification, and the entity subtype.

The NAICS code is the standard used by Federal statistical agencies in classifying business establishments. Remember “Rocketfuel Java” from part six? The NAICS code, easily found with the lookup tool on their website, will be 722515: “Beverage” (e.g., coffee, juice, soft drink) bars, nonalcoholic, fixed location or “Coffee shops, on premise brewing.” However, if Rocketfuel Java is a coffee shop on wheels, its NAICS code will be “722330, “Mobile Food Services.”

Most businesses don’t need to register with the federal government with the exception of getting a federal tax ID. However, you may want to register for trademark protection or, if you’re starting a nonprofit, tax exempt status.

If you’re selling a unique product or service, trademarking your business, brand, or product name will help set you apart from your competitors, as well as preventing customers from confusing your business with someone else’s. Once again, it’s necessary to do your research in advance to ensure you aren’t potentially infringing on an existing trademark and risking expensive legal challenges down the line.

Another important step in registering your business involves establishing a federal tax ID number, also known as Employer Identification Number (EIN). This works much like a personal social security number, but for your business, and they allow your small business to pay state and federal taxes.

Your federal EIN is used to pay federal taxes, hire employees, open bank accounts, and apply for business licenses and permits. It’s free to apply and needs to be done right after you register your new business.

If any of these apply to your business, you must get an EIN for tax purposes:

Your business has employees
Your business is a corporation or is taxed as a corporation
You have a multi-member LLC
You have a Keogh plan or solo 401(k) retirement plan

Even if you’re not required to get one, getting an EIN can provide an extra layer of protection for your small business because it will help you to separate your personal finances and personal life from your business. This has the added benefits of simplifying your accounting and bookkeeping, as well as limiting liability in the case of a lawsuit.

Some other benefits of having an EIN is that it’ll reduce your chances of an IRS audit for certain types of tax deductions such as home office deductions and it can help to prevent identity theft–once you have an EIN you don’t have to provide your personal Social Security number to clients or vendors with whom you do business. Instead, you can provide your EIN. Although these aren’t immune to identity theft either, it’s much less prevalent than consumer identity theft.

The IRS assistance tool will guide you through the process, and as soon as it’s verified, your nine-digit EIN will become active.

The Alabama Department of Revenue’s MAT tool will also walk you through the process of registering for state and state-administered local taxes. Once you register online, it taxes approximately 3-5 days to receive an account number.

As always, if you have questions or need assistance, The Catalyst Center for Business & Entrepreneurship and the UAH Small Business Development Center/Procurement Technical Assistance Center (UAH SBDC/PTAC) can help by putting you in touch with expert advisors at no cost.

Now that you’ve registered your business and filed your tax info, only two steps remain before your business is up and running–we’ll take a look at these in part 8 of our guide to establishing a successful small business.