Pick a name for your label. The name should creatively capture what you want to accomplish as a business and appeal to the demographic of the label's music. It should be short, sweet and effective.
File your name with the government. This procedure varies by state (see Resources below). To ensure that the name that you've chosen is available, check with the proper authorities and have them look up the name in the database.
Decide what type of business you want to be. There are three types, all of which are popular options. First, sole proprietorship involves a single-owner company in which profits, losses and risks are the responsibility of one owner, according to the Rap Coalition. Second, a partnership is a business in which two or more partners share the risks and rewards evenly. Third, a corporation is a separate legal entity and limits the owners' liability. The owners in a corporation are more like stockholders and their personal assets are not affected if the company fails. All are valid, and all have risks. Pick which one is right for you.
Use your record label's name as the name on your company. If you choose to make your company a corporation and your record label's name is Candy Apple Records, your business name may be Candy Apple Records. This means no one can use the name as long as you are an official business.
Get a tax ID number. The IRS allows you to apply online, by mail, by FAX or phone. Once you are an established business, you will often be required to provide your tax ID number in a variety of situations.
Find talent. Depending on your target genre, find a group or artist that is profitable, talented and well-connected. Because you are a small business, you don't have the resources to turn any band into the next big thing, so you must be careful in choosing the talent for your record label.
Market your bands and your label. These two kind of go hand in hand. When you market your bands, you are marketing your label. Stay well-connected with publicists and marketing experts. Try to get free and cheap work out of them at first. Marketing can be expensive, but basic research will reveal there are unconventional methods of guerilla marketing worth looking into.