Most Black owned businesses make the dangerous mistake of assuming they do not need to incorporate if they are online. Protecting your business – online or off – should be your first priority if you are serious about building a legacy. The process is cheap, easy, and could save you from losing everything you have worked hard to build.

By creating a formal business, you can protect yourself from lawsuits, personal attacks, and abuse from other entities.

Here are the 5 easy steps to incorporating your online business

Step 1: Choose A Unique Business Name

According to the Small Business Administration, more than 1,000 businesses start up every day. This means it is getting harder to find short, easy business names. As a Black Business, you will need to come up with a creative business name for your business. But before you go crazy, there are a few rules you should know:

1. Your business name must be easy to say and spell

As a company, we have seen business names that are words spelled backwards. We have seen business names that are made up words. And we have seen business names that are misspelled words. All of these are bad ideas that make it harder for your target audience to remember and find your business:

Incorporate your Black Owned Business

Use the correct spelling of any word you use as your business name, and choose a word that is as easy to spell and say as possible.

2. Your business name must be related to what you do

It’s not hard to figure out what Dave’s Auto Sales is all about. You can probably guess what CoCo’s Cakes can do for you. Now try to guess what Abrakebabra does. That’s a real business that makes kabobs. Not only is their name hard to spell and say, but you have no idea what they do off the bat.

Your business name should make it easy for customers to understand what you can do for them. This should go without saying but some business names will blow your mind.

3. Your business name cant be used by anyone else

You don’t want to choose a business name that someone else is using. Once you start to generate revenue, that company can come out of the blue and destroy you with trademark lawsuits.

But how do you know if someone else is already using your name? There are three ways to find out:

Do an online search

This is far from the best way of finding out if your business name is available, but its a good start. If a company is already using your name chances are they have an online presence that will show up.

If nothing comes up in Google, click here to see if the domain name is available for sale and snatch it up if it is not. Even if you don’t create a website with the domain name, you are stopping someone else from stealing it from you.

Hell, you can buy your domain name for just .99¢ at Godaddy with our coupon so there’s no excuse. Go to and get it crossed off your to-do list.

Do A Trademark Search

A trademark is granted by the United States Patent and Trademark Office for a word, phrase, or symbol that identifies the source of a product or service. The owner of a trademark has exclusive rights to the trademark and can stop anyone else from using it at the State and Federal level.

Go to the USPTO website (click here) and do a basic word mark search for the name you want to use.

Have Your Lawyer Check The Name Before Incorporating

A name check is part of the incorporation process. Your lawyer or the company filing your application will check with the State automatically to make sure no one has already registered under your name.

Step 2: Choose A State

You can legally register your business in any state that you like, but there are advantages and disadvantages to every state. Advantages can include lower annual fees, low or no corporate taxes, and fewer regulations. Disadvantages can include requiring you to be physically present in the state, keeping strict records, or having a specific number of board members.

Delaware is by far one of the best states to form a business in. Major publicly traded companies like Apple, Google and Wal-Mart are all Delaware corporations.

For years, Delaware has worked hard to create a corporation-friendly environment. You can form a corporation more quickly in Delaware than in just about any other state. Delaware doesn’t collect corporate taxes from businesses that are located out-of-state, and doesn’t tax royalty payments. The state also protects the identities of the corporation’s directors and shareholders.

Step 3: Choose Your Structure

There are many different business structures available in the United States today. But most Black business owners can limit their choices to one of the big 4 (in order of complexity):

  • Sole proprietorship
  • Limited Liability Companies
  • S Corporations
  • and C Corporations

While you should always consult the company or individuals through which you organize your business, here is a basic comparison chart of the four.


If I had to suggest one business structure to start out with, it would be a Limited Liability Company. They provide you with an initial measure of protection and tax benefits without the investment that corporations demand.

We used to file for our corporate status. Click this link and bookmark it to get started quickly. We chose because it was much less expensive than LegalZoom with more personalized customer service.

Step 4: Get an Employer Identification Number

An employer identification number (EIN) is a nine-digit number assigned by the IRS. It is used to identify the tax accounts of employers and certain others who have no employees. The IRS uses the number to identify taxpayers who are required to file various business tax returns (that’s you) so yes, you need one.

The good news is that EIN’s are free and easy to get. Just click this link to go to the IRS website to get yours. DO NOT pay for these, they are free!

That’s it! While the 4 steps above are easy, they are not simple. As an entrepreneur it is important for you to do your homework and understand the concepts above.  If you have questions, leave us a comment below.