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Most states require formal business registration in order to perform sales or services within their jurisdiction. This is most commonly handled by the Secretary of State and local tax agency. State requirements typically include the name and type of business, the primary products or services provided by the company and the legal names and residences of all owners or members in the company's ownership. State registration fees vary and may change at any time.
Federal registration also exists, primarily with the Internal Revenue Service. Companies must register with the IRS to obtain a federal Employer Identification Number that allows them to withhold taxes from employee paychecks. Companies in the United States may not employ additional persons without a federal EIN. The Internal Revenue Service, as of 2011, does not require a fee for this number, but may request proof of legal business status prior to issuance. The letter received upon registration with the Secretary of State and local tax commission should suffice for this requirement.
Legal registration of businesses may help protect the owners' assets, as in the case of a limited liability company or corporation, and allows complainants to view the publicly available information. State and federal requirements constantly change, and Business.com remains a great source for the latest information on business registration and other legal requirements for small businesses.