You’re about to embark on a long and exciting journey, one full of hard work and rewards: starting a new business. With wide eyes and big dreams, you’re about to enter the world of business ownership.
But beyond the initial thrill of the startup decision, there’s a lot to consider. In fact, if you’ve never done it before, starting a business can seem like an intimidating mountain of work. Out of all your responsibilities and tasks, you might not even know where to start.
But have no fear. The good news is that once you have everything planned out and understand the process, the formation process is smooth sailing. And this is your go-to guide.
Everything you’ve been wondering about, everything you need to do, every question you have – it’s all right here. By the time you’re through these 16 steps, you’ll be a bonafide business owner who’s prepared for sustained success.
1) Write a Business Plan
Jumping into this endeavor without goals, directives, or a sense of direction can lead to a scattered, unproductive business.
A business plan lays the groundwork for your future success. It helps you analyze key elements of your business and forge pathways to achieve your goals. Here are a few things you should consider including in your business plan:
- Executive Summary (a separate document that gives a complete overview of your business’ purpose, plans, goals, competition, opportunities, etc.)
- Company description
- Market Analysis (opportunities, competition, etc.)
- Managerial or organizational structure
- Products and/or services
- Marketing strategies
- Funding goals
- Financial projections
Business plans aren’t just great for internal operations, but they give your business legitimacy in front of potential investors, customers, partners, and more. Need help? Check out this guide from the U.S. Small Business Administration.
2) Decide on a Business Name
You might’ve come up with the perfect name right away. If so, consider yourself lucky. Sometimes, deciding on a business can be difficult, requiring brainstorming meetings and late-night rap sessions. That’s because your name is your business’ identity and reputation. It should be something that’s unique and memorable but also defines your business purpose.
You might have a creative, exciting name, but it has to meet a few requirements to be valid in Oklahoma. First of all, it needs to include the necessary terms dictated by its business type. For example, LLC names must include the words “limited liability company,” or an abbreviation like “LLC,” and corporation names must include “corporation,” “incorporated,” “limited,” “company,” or an appropriate abbreviation.
Once you’ve got that down, you’ll need to determine whether or not your desired name is available. You can’t use a name that’s already taken, so perform a business search to see if any other company has it reserved or registered. If not, you can go ahead and file your own name reservation or use it on your formation documents.
3) Decide on a Legal Structure
There are only a few types of business structures, but each one dictates some important parts of how your business will run.
The most popular types are the sole proprietorship, general partnership, limited liability company (LLC), S corporation, and C corporation. Most small businesses go with the LLC because of its unique blend of flexibility and personal asset protection.
However, you shouldn’t make this decision without reading up on all of your options. We’ve done plenty of research on each business type and developed side-by-side comparisons. Check out our LLC vs. Corporation and LLC vs. Sole Proprietorship comparison guides for a closer look.
4) Choose a Registered Agent
The Secretary of State needs a point of contact for your business, someone who will be available at your registered office address during typical business hours – 9am to 5pm.
This person is called a registered agent, and they serve as an intermediary with the state, receiving all of your company’s important legal communications and relaying them on to you. The Oklahoma registered agent ensures that no important state documents, deadlines, or payments fall through the cracks, so you’ll want to choose a person or company you trust.
You can choose either an individual or a business entity as your registered agent in Oklahoma, but they must:
- Be an individual Oklahoma resident or a corporation authorized for business in the state.
- Have a physical address in Oklahoma.
- Have a mailing address in Oklahoma (no P.O. boxes).
The registered agent plays an important role in maintaining your LLC’s compliance, so if you’re appointing an individual, you may want someone who understands how businesses run, like a manager, attorney, or other professional. However, Oklahoma’s parameters are fairly broad, so friends and family can be viable options too.
Or, you can choose a registered agent service instead. These companies take care of all your registered agent responsibilities, and some will even handle your business formation and biennial reporting as well.
Important: You must continuously maintain a registered agent on file with the Secretary of State. If your agent resigns or you appoint a new one, you’ll need to notify them by filing the appropriate documents.
5) Register Your Business
This is the big one, the step that officially creates your business. No matter which business type you choose, you’ll need to register it with the Secretary of State.
LLCs: Limited liability companies are a popular business structure choice nationwide. Forming one requires you to file an Articles of Organization, which will put your LLC on record with the state. You can submit this Oklahoma LLC filing either online or by mail. Either method will cost a $100 fee.
Corporations: Your filing options are the same for a corporation, but you’ll be submitting a Certificate of Incorporation online or by mail rather than an Articles of Organization. This form’s fee is equal to one-tenth of one percent of the business’ total authorized capital, with a minimum of $50.
Sole Proprietorship/General Partnership: There are no official forms or fees to register as a sole proprietor or general partnership. Simply start doing business and that’s it! While this is obviously faster and easier, we recommend incorporating your business because of the personal asset protection LLCs and corporations provide.
Foreign Entities: Businesses that were initially formed out of state (called “foreign” entities) and are now expanding to Oklahoma follow different procedures. If this describes your business, disregard the Articles of Organization and Certificate of Incorporation. You’ll need to foreign qualify instead by filing a Certificate of Qualification for corporations or a Registration of Foreign LLC for LLCs. Foreign qualification is a bit more expensive – $300 for LLCs and a $300 minimum for corporations. Find electronic and paper forms for both business types on the Downloadable Business Forms webpage.
6) Get an EIN
The Employer Identification Number (EIN) is your ticket to doing state and federal taxes. It’s a nine-digit number, much like a Social Security Number, that identifies your business on tax documents.
If you’re forming an LLC, it will be considered a “pass-through” entity, so the business itself won’t pay federal income taxes. Instead, you and the other members will report income and losses on your personal tax returns.
But this doesn’t mean you can go without an EIN. If your LLC pays any type of business taxes – like Sales, Use, or Unemployment Taxes – or hires employees, you’ll need to get one.
Unsure if you need one? The IRS provides a useful “Do I need an EIN?” link on this page, where you can also apply for an EIN. If you go through the online application process, you’ll receive your number immediately.
Otherwise, you can submit a Form SS-4 by fax to (855) 641-6935 or by mail to :
Internal Revenue Service Operation
Attn: EIN Operation
Cincinnati, OH 45999
7) Open a Business Bank Account
LLC and corporation owners are required to keep their personal and business finances completely separate, or they risk losing their personal asset protection. To do so, you’ll need a business bank account.
The good news is that opening a business bank account is pretty simple. Just pay a visit to your bank’s local branch and sit down with one of the bankers there. You will need to present your formation documents, an EIN number, and some personal information. Then, you can direct all of your business income and expenses to that account instead of a personal one.
It doesn’t really matter which bank you choose, whether it’s a national giant like Chase or Bank of America or a small, local bank. However, it’s usually easiest to go with the one where you have existing accounts.
8) Handle Any Tax Obligations
Ah, taxes. They’re always part of the picture, especially when you run a business.
Familiarizing yourself with your business’ tax requirements will help you establish a solid financial plan going forward. LLCs don’t need to file a corporate tax return and pay federal income taxes, so you’ll handle these taxes as part of your personal return.
Corporations, on the other hand, will need to pay a Corporate Income Tax, while sole proprietorships/general partnerships will need to pay self-employment taxes.
There are a few other taxes your business may owe in Oklahoma, depending on its activities:
Franchise Tax: This tax is only required for Oklahoma corporations and amounts to $1.25 for every $1,000 of capital invested or used in the state. Foreign corporations will owe an extra $100 on top of this amount.
Sales and Use Taxes: If your business sells goods in the state, it will be subject to Sales and Use Taxes. Find plenty of information on filing, rates, and more on this page.
Withholding and Unemployment Insurance Taxes: Any business that hires employees must pay a Withholding Tax through the Oklahoma Tax Commission and an Unemployment Insurance Tax through the Oklahoma Employment Security Commission.
Miscellaneous Taxes: Depending on your business’ activities, it may be subject to a few other minor taxes. You can find a list of potential business taxes here.
Visit the Oklahoma Tax Commission website for more information on any of these taxes.
9) Find an Accountant
Sometimes it’s easier to hand off your financial responsibilities to a professional. Not only will an accountant ensures that your taxes are filed and paid correctly, but they might also find a few ways to save your business money.
Bookkeeping and tax procedures are time-consuming and require some specialized knowledge. Balance sheets, financial reports, cash flow, audits, and much more – an accountant can ensure that your company operates smoothly and streamlines its expenses.
This can be expensive depending on the complexity of your finances, but the benefits an accountant offers can be well worth it.
10) Create an Operating Agreement
An operating agreement constructs a framework of procedures and standards for your business. This is where you can lay out processes for member conduct, asset allocation, compensation policies, voting procedures, dissolution, and much more.
While operating agreements aren’t technically required in Oklahoma, they are essential to your business’ stability and success. They provide a safety net in legal disputes and legitimacy in front of banks, courts, government agencies, and other businesses.
You can either draft one yourself using an online template, or you can hire an attorney or an incorporation service to take care of it for you.
Once you’ve drafted your agreement, it must be approved by each of your LLC’s members, then filed with the rest of your business documents. You do not need to submit it to the Secretary of State.
11) Acquire the Necessary Licenses
So, you’ve filed your formation documents, so your business is officially on record with the Secretary of State. But that doesn’t mean you’re necessarily ready to start doing business quite yet. Before you can open your doors in Oklahoma, your business might need to obtain one or more licenses, depending on its purpose and activities:
Professional Licenses: Certain occupations require licensure from specific state boards before doing business in Oklahoma. These licenses are located on different sections of the state website, so search for your specific occupation if you’re unsure.
Environmental Permits: If your business produces emissions or hazardous waste, or otherwise affects Oklahoma’s land, air, or water, it may need a permit from the Department of Environmental Quality.
Retail Licenses: Any business that sells retail goods in the state will need a Sales Tax Permit through the Oklahoma Tax Commission.
Contractor Licenses: Many contractors require specific licenses through their respective state boards. You can find information on the Department of Commerce website.
Local Licenses: Your specific city, county, or municipality might have its own licensure requirements. Take a look at your local government’s website to find out.
12) Consider Business Insurance
Even though it’s not pleasant to consider, there’s always a chance that unforeseen events might take a toll on your assets.
While forming an LLC or corporation offers some personal asset protection, additional business insurance can also protect your business assets in cases of lawsuits, damages, etc. You can acquire insurance for your business products, vehicles, specific occupations and much more.
If you hire employees, you’ll also need to get workers’ compensation insurance. SBA.gov has a useful guide for determining which forms of insurance your new business might need.
13) Build a Website
Your company’s digital presence is just as important as its physical one. Like it or not, most potential customers will find your business online, and if you don’t exist online, you’re missing out.
But don’t worry, you don’t need to be an HTML or web design expert to build a website. Sites like WordPress and Squarespace make it easy to construct an elegant and responsive website, no coding necessary. But if you’re not comfortable or confident doing it on your own, you can always hire a professional web designer to take care of it for you.
14) Launch Social Media Accounts
Making your mark on the digital landscape doesn’t start and end with your website. Most successful businesses also have a robust social media presence on multiple platforms. Facebook, Twitter, and Instagram are all great ways to connect organically with potential customers and develop your brand voice.
Just don’t forget to publish consistent social media content, or you’ll have trouble building a base of followers.
15) Understand Ongoing Oklahoma Requirements
After you’ve launched your business, things will likely be moving at 100 miles per hour as you evolve and grow. But in all of the excitement, you can’t forget your state’s ongoing compliance requirements. Every state has its own annual or biennial business requirements.
Every Oklahoma LLC is required to file an Annual Certificate each year by its anniversary date, the day it was originally formed. This form costs $25 and can be submitted online or by using a hard copy.
Instead of an Annual Certificate, corporations must pay an Annual Franchise Tax by July 1st every year. This tax amounts to $1.25 for every $1,000 of capital invested or used in the state, and the maximum tax is $20,000. Foreign corporations must also pay a $100 Annual Registered Agent fee.
16) Check Out Oklahoma Small Business Resources
You’re not on this journey alone. There are plenty of free resources available to make starting and growing your business a smoother, easier process.
SBA.gov is a go-to spot for valuable knowledge on starting a new business in Oklahoma. This site provides not just general information essential to starting, running, and growing your business, but also state-specific resources like this Oklahoma Small Business Resource Guide and the page for Oklahoma’s SBA district office. Equipped with these tools and the info in this guide, you’ve got a solid foundation on which to build your business’ long-term success.