Most people realize that starting a business isn’t easy. You have to have a strong idea, business experience, and resources to make everything happen. But the requirements for starting a business in Oklahoma are more approachable than you might think- especially once you figure out what type of business you want to start.
Stepsa to Getting a Tax ID (EIN) Number and Forming Your New Business in Oklahoma
- Oklahoma Means Business
- Forming a Business in Oklahoma
- Federal Tax ID (EIN) Number Obtainment
- Oklahoma State Tax ID Number
- Localized Licenses and Permits in Oklahoma
Oklahoma is a sparsely populated state, but it’s home to more than just open, rural areas. Centered between Texas, New Mexico, Colorado, Arkansas, and other states, Oklahoma has open access to much of the United States, and cities like Oklahoma City, Tulsa, and Norman represent thriving metropolitan areas that are attractive to entrepreneurs.
The Oklahoma Small Business Development Center is just one of the many resources available to Oklahoma entrepreneurs, and there are plenty of special grants and incentives available to certain industries and types of businesses. Thanks in part to those efforts, the state is currently home to more than 347,000 small businesses, which employ roughly 52 percent of the working population in the state- more than 712,000 people. And while economic growth in Oklahoma is slightly slower than the national average, there are plenty of strong opportunities for business owners looking to set up shop in the state.
When you have a business idea you feel confident about, your first major decision is what type of business structure to form. These are some of your main options:
- Sole proprietorships and partnerships. These types of businesses are by far the simplest, and the easiest to set up; the only real difference here is the number of people who own and operate the business. In these businesses, you’ll pay taxes on any money you make as an individual, as you would almost any miscellaneous income. You also won’t have any liability protection, leaving you vulnerable to business debts and liabilities.
- Limited liability companies (LLCs). LLCs are a way to formalize and separate your business, since LLCs are treated as distinct legal entities. They’re a little more complicated to set up, but give you more flexibility with taxes. You can withdraw profits or salary as you see fit, and pay taxes as an individual on whatever you take. In Oklahoma, there was once an additional annual LLC certificate fee of $25, but this is no longer active. As their name implies, these companies offer somewhat more liability protection than a simple sole proprietorship or partnership.
- Corporations. Corporations are by far the most complex business type, since there are demanding rules and regulations dictating how they may operate and how they must be formed. However, they’re easy to scale, and they allow you to issue public shares to raise funds, making them attractive for entrepreneurs with big visions for their companies. In terms of liability protection, no business structure is better than that of a corporation; like LLCs, they’re treated as completely separate entities. Corporations do come with higher tax rates in many cases, however; they’re responsible for paying taxes on all income on the federal level, and in Oklahoma, must pay a corporate tax rate of 6 percent on eligible income earned in the state. Since you’ll pay taxes on dividends and profits you withdraw as well, this can result in double taxation for owners.
As your business grows, you may be able to change your business structure to something that fits it more appropriately. However, it’s usually best to start with the "right" business structure for your company.
After you’ve decided on a business structure, you can get your business registered with the federal government, a process that will provide you with a federal tax ID, or employer identification number (EIN). You can think of this number like a social security number for your business; it will serve as a unique identifier, and you’ll use it when filing taxes. You’ll also need an EIN if you plan on hiring employees, or when you need to open an account in the business’s name.
You have a few choices for how to approach your federal tax ID number obtainment, but the fastest and easiest way is to use our federal tax ID obtainment services. We collect a few pieces of information about you and your business, and can get you set up with a number in a matter of a few hours.
Keep in mind you may also need to register your business at the state level, getting an Oklahoma state tax ID number in the process. If you think you’ll need to pay excise taxes (which apply to certain regulated products, like alcohol), or sales taxes for goods and services sold in Oklahoma, or if you plan on hiring employees, this registration process is a must.
When you’re ready to get your Oklahoma state tax ID, make sure to use our Oklahoma state tax ID number obtainment services. We make the process as quick and straightforward as possible, getting your business registered in a matter of hours in many cases.
Oklahoma has specific licensing, permit, and certification requirements for many businesses, including those involved in healthcare, consumer credit services, construction, and even retail. Even if you think your business doesn’t need a license or permit, it’s a good idea to explore Oklahoma’s state-level licensing requirements, and determine for sure whether you need additional paperwork and/or registration.
In addition to Oklahoma licenses, your business may be subject to local licensing and permit regulations; each city may have its own rules and restrictions. Before you decide which city to start your business in, and long before you begin operations, visit your local Chamber of Commerce or city website for specifics.
If you’re excited about starting a business, you should ride that momentum and get your company started as soon as possible. Get your business plan in order, then make use of our federal tax ID and Oklahoma state tax ID obtainment services to expedite the process!