Multiple Ventures? How to Best Structure your Multi-Brand Business.

by NellieAkalp

1 February 3rd, 2012

I’m always in awe of the many talents of today’s entrepreneur…the wedding photographer who also writes children’s books, the copy editor who sells homemade soap, and the stay-at-home mom who doubles as a part-time caterer and jewelry designer. Today’s creative professionals often find themselves making income through a creative patchwork of diverse interests and talents.

Take Sue as an example. She recently called into the office with no fewer than five ventures. She has been selling children’s clothing, handbags, and craft supplies on Etsy. After a few solid years on Etsy, Sue was now ready to take the next step and launch her own websites outside of Etsy, as well as expand into handmade paper goods and home décor. Read More→

Categories business checklist, Business Tools, Choosing A Business Structure, Legal Tips, Running A Small Business, Small Business Tax Issues, Starting a Business, Women In Business
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Top 5 Reasons for Incorporating Your Business

by NellieAkalp

1 January 13th, 2012

Many small businesses consider themselves ‘too small’ to worry about incorporation. However, whetherowever, you’re a self-employed social media consultant or a landscaper, incorporating or forming an LLC (Limited Liability Company) can be a smart idea. Here’s why:

1–Liability protection: First and foremost, the LLC and the Corporation (C Corporation or S Corporation) protect the owner’s personal assets from any liability of the company. That is, if your company happens to be sued, your personal assets (i.e. property, savings accounts) are shielded from any judgment. Of course, lawsuits are worst-case scenarios and there’s a slim chance you’ll ever run into legal problems. However, if you’re sued as a sole proprietor, you’ll be sued personally. And that means everything – from your children’s college fund to your retirement savings – is at risk. Also keep in mind that creditor judgments can last up to 22 years, so you need to worry not only about protecting the assets you have today, but the assets you’ll have tomorrow.

2–Taxes: Federal income tax rates can be lower for corporations than for individuals. And as a corporation, you may be entitled to additional deductions.

3–Credibility: Adding ‘LLC’ or ‘Inc.’ after your company name boosts your credibility in the eyes of some customers and partners.

4–Business credit/capital: As a corporation or LLC, it can be easier for you to access a line of business credit. And forming a C Corporation will be essential if you plan to seek Venture Capital funding.

5–Added layer of privacy: With an LLC or a corporation, the company’s ‘registered agent’ goes on public record, and not your home or business address (in most cases).

Fortunately, the incorporation process has been greatly simplified these days, so there’s simply no reason to delay incorporating your business or forming an LLC.

Question: So how do you even go about filing all the necessary paperwork and making sure that you’ve done it all correctly?

Answer: With a reputable business fromation filing service such as CorpNet.com .

Our professional staff has the knowledge and expertise to help you every step of the way. From choosing a business structure to reserving a name to filing with the Secretary of State, CorpNet.com can make the filing process quick and painless.

It is possible to handle all of your business filings yourself. It will require doing lots of research to be sure you’re filing the correct documents, completing all of the forms, paying individual fees, and quite possibly hiring an attorney to advise you. With CorpNet.com, you have a one-stop destination for all of your business filings. Everything can be handled at once, and all for an extremely reasonable fee. Check out our list of filing services to get an idea of how we can help you to get started.

CorpNet.com can help right from the beginning, with a Starting a Business Checklist that lists everything you need to know in order to get your company up and running. Our Free Corporate Name Search lets you be sure that the name you’ve chosen for your company is available, and we can help you to reserve the name for your own use. CorpNet.com’s Free Incorporation Guide or Free LLC Guide to get all the details about the distinctions between the two structures. You’ll learn that overall, an LLC is the less formal entity. Of course, details may vary based on your specific circumstances, so take some time to educate yourself on these two business structures.

Let CorpNet.com apply for your Employer Identification Number (also known as a Federal Tax ID Number), the first step in incorporating your business. If you aren’t sure whether you need a business license, CorpNet will advise you, and file the application for you.

Once your business is incorporated, CorpNet.com can continue to provide valuable services. If you make any changes to your corporate structure, our staff can file the appropriate Articles of Amendment. Take the worry out of filing your annual report with our service.

CorpNet.com can provide filing services in all 50 states. Our staff is professional, courteous and reliable, and all services are fully guaranteed.

Contact CorpNet.com today, and cross all of those business filings right off your list.

We look forward to incorporating your business for you and getting your business off the ground!

Good luck!

A portion of this original content by Nellie Akalp was written and published on BusinessWeek.

Categories business checklist, Business Tools, Choosing A Business Structure, Legal Tips, Running A Small Business, Small Business Tax Issues, Starting a Business, Women In Business
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Top 4 Startup Mistakes When Incorporating a Business

by NellieAkalp

1 January 12th, 2012

During the initial months of the year, savvy entrepreneurs rush to incorporate their businesses or form a Limited Liability Company (LLC). And with good reason, a corporation or LLC is essential to protecting one’s personal assets from any liability of the company. After all, if you’re sued as a sole proprietor or partnership, you’re sued personally – and that puts your personal savings and investments at risk.

Incorporating a business or forming an LLC is a relatively quick and painless process. However, while it may seem straightforward, there are some common mistakes that business owners make that can have a significant impact on their business:

1. Choosing the Wrong Business Entity

Your choice in business entities will shape the amount of taxes you pay and paperwork you contend with. It’s an important decision, one worth some research. The three most common types in the U.S. are the LLC (Limited Liability Company), S Corporation, and C Corporation. Here are a few things to keep in mind:

The LLC is great for startups that want the liability protection, but prefer minimal formality and paperwork.
The S Corporation is a pass-through entity for federal taxes (like the LLC). It should be used by startups that will make a profit soon after incorporation…and that profit will be distributed to the shareholders.
The C Corporation files its own tax report. It should be selected by those startups who plan to reinvest profits back into the company or seek funding from a VC.

2. Incorporating in Delaware or Nevada

Delaware and Nevada are hot states for incorporation, and for good reason. Delaware offers some of the most developed, flexible, and pro-business statutes in the country. And Nevada is increasingly becoming a popular choice for businesses due to its low filing fees, as well as the lack of state corporate income, franchise, and personal income taxes.

However, if your startup has less than five shareholders, it’s best to incorporate in the state where your business has a physical presence (i.e., where you live). Otherwise, you won’t actually reap any of the benefits, and you’ll be dealing with added hassles and costs of operating “out of state” A including: difficulties opening a business bank account, having to appoint a registered agent, and fees for operating as a ‘foreign entity’ in your own state.

3. Hiring a Lawyer to File the Forms

You don’t actually need to hire a lawyer to form an LLC or Corporation. If you’ve got a straightforward investment situation, you can use a legal document filing service to represent yourself to create a business entity. In the eyes of the law and IRS, your LLC or Corp will be just as valid than if a high-priced attorney sent in the documents for you.

4. Not Staying Compliant

Too many business owners think that their legal obligations are finished once their LLC or Corporation is formed. But, it’s critical that you keep your LLC or Corporation in compliance. If a plaintiff shows that you have not maintained your LLC/corporation to the letter of the law, he or she can seek recovery against your personal assets. In short, the corporation’s shield that protects your personal assets is pierced.

So, how do you make sure your corporation stays compliant? Keep your personal funds separate from those of the business (no commingling: this means keeping a separate bank account and credit card). Remember to send in your Annual Statement/Annual Report (if required by your state). And obviously, do not engage in any form of fraud.

By avoiding these common missteps, you can better protect your personal assets and minimize your personal liability; Of course, the biggest mistake of all is never forming an LLC or Corporation. So even if you’re putting 80-hour weeks to find new clients or launch a new website, make some time this year to incorporate. By getting your legal ducks in a row early on, you’ll be able to scale far more smoothly in years to come.

CorpNet.com can provide filing services in all 50 states. Our staff is professional, courteous and reliable, and all services are fully guaranteed.

Contact CorpNet.com today, and cross all of those business filings right off your list.

We look forward to incorporating your business for you and getting your business off the ground!

Good luck!

A portion of this original content by Nellie Akalp was written and published on StartUpNation.com.

Categories Choosing A Business Structure, Legal Tips, Running A Small Business, Small Business Tax Issues, Starting a Business, Women In Business
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3 Reasons NOT to Incorporate as an S Corporation

by NellieAkalp

1 January 10th, 2012

The S Corporation has become one of the most popular business structures in America because of its tax advantages and other benefits – but what if you are trying decide how to incorporate a business and you’re not sure if an S Corporation is the right choice for you?

If you’re trying to choose a business structure, there are several reasons why an S Corporation might not be the right choice.

You’re a sole proprietor who doesn’t want the hassle: If you’re a solo entrepreneur or sole proprietor with a “payroll of one,” it might not make sense for you to set up the extra structure and formalities and compliance obligations that go with an S Corporation. If you incorporate as an S Corporation, you need to set up a board of directors, file annual reports and other business filings, hold shareholder’s meetings, keep records of your meeting minutes, and generally operate at a higher level of regulatory compliance than your business might need or want to deal with. You also will need to “do payroll,” to pay your employees, even if you’re the only employee. This can create extra costs and operational challenges. Instead of dealing with all this red tape and complexity, forming an LLC might give you greater simplicity and ease of doing business. With an LLC, as a sole proprietor you don’t have to create a board of directors or jump through as many regulatory hoops.

You want venture capital: S Corporations offer important tax advantages for small business owners – but there’s another side to that coin; the IRS only allows S Corporations to issue one class of stock. With an S Corporation, there are no “preferred shares” or specialized tiers of stock with special privileges or benefits for the shareholders. If your company wants to attract venture capital or “angel investor” financing, you might be better off as an LLC or C-Corporation, since venture capital investors often want “preferred shares” of stock in your company (as a condition of giving you their money).

You want to grow and go public: S Corporations are designed for smaller businesses and so there are limitations on ownership of an S Corporation. An S Corporation can have a maximum of 100 shareholders (married couples and families count as a single shareholder for this purpose). In contrast, big publicly traded companies that incorporate as C Corporations can have millions of shareholders. So if you have big growth plans for your business, incorporating as an S Corporation is probably not the best choice for your long-term future.

The 3 Biggest Tax Advantages to Forming an S Corporation

by NellieAkalp

1 January 4th, 2012

As anyone who has ever decided to start a business can tell you, paying taxes is one of the biggest challenges and drawbacks of being in business for yourself.

If you’re self-employed, you have to pay an extra share of self-employment taxes (the payroll taxes that pay for Medicare, Social Security, unemployment benefits and other ongoing government programs).

If you’re an employee, these taxes get withdrawn from your paycheck and you might not notice how much you’re paying. But even as an employee, payroll taxes add up to about 7.5% of your income (up to $90,000 – any income over that amount is taxed at a lower rate for payroll tax purposes).

When you start a business and become your own employer, if you’re paying taxes as a sole proprietor, you have to pay TWICE as much payroll tax as you used to pay as an employee – both the 7.5% employee share and the 7.5% employer share. This means that about 15% of your business income is going to payroll taxes. Read More→

Categories Business Tools, Choosing A Business Structure, How To Form an LLC, How To Incorporate a Business, legal aspects of a startup, Legal Tips, Running A Small Business, Small Business Tax Issues, Starting a Business, Startup
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Interested in forming an S-Corp? Read this first.

by NellieAkalp

1 December 27th, 2011

CorpNet has helped thousands of entrepreneurs start a business by forming an LLC or other business structure.

Deciding to incorporate a company can be complicated. If you’re trying to choose between forming an LLC or incorporating as an S-Corp, C-Corp or other business structure, keep in mind that each type of company has its own unique requirements, limitations and benefits.

One of the most popular business structures that our customers choose is the S-Corporation. The S-Corporation has become the most common corporate entity in America, with over 3 million small businesses filing taxes as S-Corps.

If you’ve ever wondered about the advantages of an S Corporation instead of simply forming an LLC, then read on for some insights. Read More→

Categories Business Tools, Choosing A Business Structure, How To Incorporate a Business, legal aspects of a startup, Running A Small Business, Small Business Employees, Small Business Tax Issues, Starting a Business
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Do you really need to incorporate as an S Corporation?

by NellieAkalp

1 December 22nd, 2011

The S-Corporation has become one of the most popular business structures in America, with over 3 million small businesses incorporated as S Corps and/or filing taxes as S Corps. Many entrepreneurs love the flexibility and tax advantages that go with this choice of business structure.

However, the S Corp has certain complications and drawbacks as well. Depending on your business, you might not need or want the extra levels of details and “hoops to jump through” that go with incorporating as an S-Corporation.

Here are a few questions to consider if you’re trying to decide between incorporating as an S-Corporation or simply forming an LLC: Read More→

Categories business filing service, Business Tools, Choosing A Business Structure, How To Incorporate a Business, Legal Tips, Small Business Tax Issues, Starting a Business, Startup
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How to decide between an LLC and S Corporation?

by NellieAkalp

1 December 20th, 2011

Here at CorpNet, we hear from entrepreneurs every day who are trying to decide the best way to start a business or incorporate an existing business. We offer free business consultations to help people learn the ins and outs of choosing a business structure, and one of the most frequently-asked questions we get is “How can I decide between an LLC and S-Corporation?”

Most small business owners want to limit their personal liability and protect their personal assets from those of the business. Any business structure, whether it’s an LLC, S Corporation or C Corporation, can achieve this goal of personal asset protection.

The biggest differences between forming an LLC and incorporating as an S-Corporation arise when you start to look at the more complex issues of taxation, corporate structure and regulatory compliance.

If you’re a new entrepreneur or longtime small business owner who’s trying to figure out how to choose between an LLC and an S-Corporation, here are a few considerations to keep in mind:

S-Corporations require extra paperwork: If you choose to form an LLC, your day-to-day experience of running your business is not likely to change. If you’re a sole proprietor who forms an LLC, you still can keep doing business the same way as before, you keep paying taxes the same way as before, and in general, you get the protections of incorporating without a lot of extra hassles and red tape. This is not the case for an S-Corporation. If you form an S-Corporation, you need to assign a Board of Directors, hold annual shareholders meetings, file multiple business filings throughout the year, set up formal payroll processes, and deal with various other paperwork, accounting and regulatory hurdles that you don’t need to worry about with an LLC or sole proprietorship. Many sole proprietors should think hard about setting up an S-Corporation: are you really ready for the extra complexities and costs that go with incorporating as an S-Corporation? Depending on the nature of your business and your goals, you might be better off with an LLC.
S-Corporations can be tricky for sole proprietors: Many sole proprietors want to get the tax savings of an S-Corporation to avoid paying that dreaded extra share of self-employment taxes. (If you form an S-Corporation, the company does not pay any taxes and the earnings can be passed through to the individual owners/shareholders – and those earnings are then taxed as “employee income,” without incurring the extra 7.5% of self-employment taxes.) However, there can be a few hurdles for solo entrepreneurs who want to incorporate as an S-Corporation. As a sole owner of an S-Corporation, you need to pay yourself a salary and also assign a “distribution” of the company earnings. The distribution amount is free from self-employment tax. However, you need to be careful about how high to set your salary – if you pay yourself too low of a salary (hoping to minimize your self-employment taxes), you might get audited by the IRS and have to pay tax penalties. But if you set your salary too high, you run the risk of overpaying your self-employment taxes. This situation is complicated and we encourage you to talk with a professional tax adviser prior to deciding to incorporate as an S-Corporation.
S-Corporations require owners to be U.S. citizens or permanent residents: The business world is more international than ever before – so if you’re starting a business with partners from other countries (or located in other countries), an S-Corporation is probably not the best choice. Under U.S. tax laws, owners of an S-Corporation must be U.S. citizens or permanent residents – but this restriction does not apply to LLCs or other business structures. This is a small but important consideration if you or your business partners are not U.S. citizens or permanent residents.

NOTE: CorpNet does not give tax advice and this article does not claim to do so. Please consult with a professional tax adviser before making any final decisions about whether to incorporate as an S-Corporation (or other corporate entity) and how to handle your corporate and personal income tax responsibilities.

Are you ready to incorporate as an S-Corp or form an LLC to get your business up and running? Talk to CorpNet! We help entrepreneurs start a business by managing the business filings to incorporate a company. Whether you want to form an LLC or S-Corporation or other corporate entity, CorpNet can help you choose a business structure with a free business consultation.

Categories How To Form an LLC, How To Incorporate a Business, incorporation service, Running A Small Business, Small Business Employees, Small Business Tax Issues, Starting a Business, Startup
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Year-End Business Checklist

by NellieAkalp

1 November 14th, 2011

As the days are getting shorter and the calendar is quickly ticking off the final days of 2011, we all start thinking about holiday shopping and travel plans. But if you’re a business owner, no matter the size and scale of your business, it’s also that time of year to make sure you’ve got everything squared away for the New Year.

This is a reprint of a guest post written by me that originally appeared on Mashable and I want to share it with you.

Small Biz Checklist: 5 Important Tasks for the End of the Year

When it comes to some legal decisions, if you wait until you write your New Year’s resolutions, it will already be too late. So here’s a snapshot of some of the things you should be thinking about while it’s still 2011…

Inactive Business? Close it before 2012!

Maybe you formed an LLC for a graphic design business a few years ago or you started an online venture with a few friends. But over the past year, you’ve focused on your full-time day job, haven’t actively promoted this business, have no revenue, no customers…In every sense, you’ve basically closed your business – but you still need to file a formal termination of that LLC or Corporation. Otherwise, you can still be charged fees associated with the business. You’ll still be expected to file an annual report (where applicable). You’ll still be required to submit tax returns to the IRS and state.

In short, you’ll need to file “Articles of Dissolution” or a “Certificate of Termination” document with the Secretary of State within the state that your Corporation or LLC was formed (and in most cases, you’ll need to settle any owed taxes before you can do this). Along these lines you should also cancel any kind of permit or licenses you hold with the state or county. And if you’ve been using a fictitious business name, you’ll need to file an abandonment form. Again, make sure to take care of these matters while it’s still 2010. There’s simply no reason to pay an extra cent in fees toward a business you know you’re retiring. Put that money towards your next venture instead!

Started a New Business? Incorporate Before 2012!

If you’ve started a new business in 2011 and still haven’t incorporated or Formed an LLC, you might want to do so before 2011. Of course, bear in mind that your corporation’s ‘start date’ is not retroactive. Any tax benefits you might receive apply from the date you incorporated (i.e. if your corporation forms on December 11, you’ll still need to fill out your taxes as a ‘sole proprietor’ for all the previous months in 2011). For this reason, incorporating or forming your LLC is the one legal issue which might be better deferred until 2012. But be aware that January is the absolute busiest time of the year at your state’s secretary of state office, so by waiting until January, you will be at the mercy of a long backlog. Don’t worry, we’ve got your back…you’ve got a great option of selecting a ‘Delayed Filing’ with CorpNet. This means you get all your paperwork submitted now, and it will be held and filed on the first business day of 2012 (where you’ll be at the front of the line).

Already Incorporated? Be Corporate Compliant!

If you’ve gone through the work to incorporate your business, make sure you keep it in good standing. Most states require some form of an annual report filing (some every year; some every two years). If your state requires you to file this report, there is a specific due date for filing each year – in some cases, it’s on the anniversary of your business’ incorporation date; in other cases, it’s when your annual tax statements are due; and in some cases, it’s at the end of the calendar year. Be sure to know your specific filing deadline and if you don’t, give us a call and we can take care of the filing for you. Missing this deadline can result in penalties and late fees – and worst case scenario, your company can be subject to suspension or dissolution.

File Corporate Amendments Before 2012!

Did you change your address? Drop the ‘.com’ from your official company name (or any other name change)? Authorize more shares? Did a board member or director leave the business? Any time you make a change to your corporation or LLC, you can basically count on having to file an official notification (referred to as an “Amendment”) with your state. In many states, these are called Articles of Amendment.

There’s no need to struggle with trying to figure out the precise nature of your amendments and the proper forms you need to file. Let CorpNet (R) handle the details of filing your Articles of Amendment for a minimal service fee…this way you can rest assured that they will be filed quickly and accurately – and economically!

Visit our Articles of Amendment section to learn how we can assist you in filing the necessary paper work to file the Articles of Amendment for your Corporation or LLC quickly and affordably.

Tie Up ANY Legal Loose Ends before Year-End!

The end of the year presents a perfect opportunity for you to tie up any loose ends that you’ve put off throughout the year. For example: Did you File a DBA (Doing Business As) for your business name? Do you need to file for a trademark? Did you get a Tax ID number (Federal Employer ID Number)? Are all your necessary licenses and permits in order?

While December may be a busy month, be sure to set aside some time to address your administrative obligations. In some cases, taking care of an issue in 2011 can help save you money in fees and penalties moving forward. And in other cases, you can cross a few more things off your list to start fresh in 2012.

CorpNet’s professional staff is here to assist you every step of the way… And once you know what you’re required to file, we can take care of the details for you!

Of course, if you have specific legal questions or concerns, you should consult an attorney for sound advice.

Categories business checklist, Choosing A Business Structure, Legal Tips, Running A Small Business, Small Business Tax Issues, Starting a Business
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Avoid the Top Five Incorporation Mistakes

by NellieAkalp

1 November 8th, 2011

Forming an LLC or incorporating a business can be a relatively quick and easy process. And it’s an undeniably critical step to protecting one’s personal assets from any liability of the company. However, while incorporating may be straightforward, small business owners often make a few common mistakes that can have a significant impact on their business. Are you guilty as well?

Categories business checklist, business filing service, Choosing A Business Structure, corpnet.com, How To Form an LLC, How To Incorporate a Business, incorporation service, legal filing service, Legal Tips, Running A Small Business, Small Business Tax Issues, Starting a Business, Startup, startups, Women In Business
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Archive for Small Business Tax Issues

Multiple Ventures? How to Best Structure your Multi-Brand Business.

Top 5 Reasons for Incorporating Your Business

Top 4 Startup Mistakes When Incorporating a Business

3 Reasons NOT to Incorporate as an S Corporation

The 3 Biggest Tax Advantages to Forming an S Corporation

Interested in forming an S-Corp? Read this first.

Do you really need to incorporate as an S Corporation?

How to decide between an LLC and S Corporation?

Year-End Business Checklist

This is a reprint of a guest post written by me that originally appeared on Mashable and I want to share it with you.

Small Biz Checklist: 5 Important Tasks for the End of the Year

Inactive Business? Close it before 2012!

Started a New Business? Incorporate Before 2012!

Already Incorporated? Be Corporate Compliant!

File Corporate Amendments Before 2012!

Tie Up ANY Legal Loose Ends before Year-End!

Avoid the Top Five Incorporation Mistakes

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