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Set up a company the government can pay.

No office, employees or past contracts needed. You do need a real legal entity, a bank account in its name and a clean SAM.gov registration. Most people finish in two to four weeks.

Start here

  1. Pick a structureLLC for most; S corp election later when profit justifies payroll.
  2. Get the EINFree from the IRS, online, in minutes. Never pay a site for it.
  3. Open the bank accountIn the company's exact legal name; SAM.gov pays into it.
  4. Register in SAM.govFree: SAM.gov charges nothing to get a Unique Entity ID, register your entity or keep the registration up to date. You get a UEI and a CAGE code. A UEI alone is not a registration: only a full registration lets you apply for federal awards.

Pick a structure Decide onceAsk a CPA

Four choices; three are real. Many people start as an LLC and elect S corp status once profit justifies payroll.

Structure
Good for
Watch out for
LLC
Most new contractors. Cheap to form, protects your personal assets, profits pass through to your personal return.
Self-employment tax on all profit unless you elect S corp taxation later.
S corporation
Profitable companies where you want a salary plus distributions to cut self-employment tax.
Owners must be U.S. persons, 100 shareholders at most, one class of stock.
C corporation
Raising outside investment, or planning to sell the company.
Profit is taxed at the company and again when paid out as dividends.
Sole proprietorship
Testing the waters only.
No liability protection, and it looks thin to a contracting officer. Most people skip it.

The paperwork, in order 7 items2 to 4 weeks

Each item takes a day or less; the waiting is the state registry and SAM.gov.

  1. NameBroad enough to cover services and products you might add later. Check your state's business registry and the USPTO trademark search before you file.
  2. Registered agentThe person or company that accepts legal papers for the business in your state. You can be your own if you have a physical address there.
  3. EINApply free on IRS.gov. Never pay a third-party site for this.
  4. Business addressA virtual office with mail handling is fine for most service and supply work. A post office box or a mail drop (a UPS Store box) fails validation in SAM.gov: use the physical address where you do business (a home address is fine for a home-based business). Some licenses need premises that can be inspected.
  5. Bank accountIn the company's legal name, matching your IRS records exactly. SAM.gov pays you through this account by EFT.
  6. Domain, website and e-mailA one-page site and an e-mail on your own domain, not Gmail, make you look like a company rather than a side project.
  7. State and local licensesYour state's business license rules and any trade licenses for the work you do.

Register in SAM.gov FreeAt least 10 business days (10-15 on average)

SAM.gov is where every company that takes federal money is registered. Anyone who charges you to "register" is filling in forms you can fill in yourself.

  • Create a Login.gov account and sign in at SAM.gov
  • Choose "Register Entity", full registration: "Unique Entity ID only" lets you subcontract but not bid
  • Legal name and address exactly as the IRS has them; SAM validates against public records, and this step causes most delays
  • Core data, financial information, points of contact, representations and certifications
  • Get the UEI and the CAGE code; renew every 365 days
The rest of this guideCore
  • Set-asides and certifications
  • CMMC Level 1: a yearly self-assessment when Defense work involves Federal Contract Information
  • Before you bid
Read it with the 7-day trial

Put the codes in your company profile →

General information, not legal or tax advice. Official sources: SAM.gov, IRS EIN, SBA certifications, SBA federal contracting, DoD CMMC, FAR 52.204-21.