Sure, initially that sole proprietorship, LLC, or corporation worked for you (or rather, it didn’t cause any issues) but now you’ve got reason to think twice about whether it’s the best business structure for your brand.

Why You Should Consider a Change of Business Structure

Maybe you started your business as a sole proprietor, but now that you’ve grown, you feel you’d benefit from incorporating or forming an LLC. Maybe you started a business so long ago, the LLC wasn’t an option in your state.

Maybe you want to sell the business in a few years, and want a business structure that will make transfer of ownership easier. Maybe you realize that operating as a C Corporation is overkill for your little business, and you want to take advantage of tax savings you’d realize with an S Corp.

Or maybe you want to bring on investors, and you’re finding that they’re not keen on giving money to an LLC, and prefer to work with a corporation.
Whatever your reason for considering changing your business structure, there are benefits to doing so.

Benefits to a Better Business Structure

If you’ve been operating as a sole proprietorship, you already know from reading this blog that your personal assets are at risk. That alone is reason enough to switch to an LLC or corporation.

If you’re thinking of changing from a C Corp to an S Corp, you’ll be able to take advantage of the S Corp’s pass-through taxation. Whereas C Corps are taxed twice (once on the profits of the corporation, and again on the shareholders’ profit), S Corps are taxed only on the owner’s personal tax return. That usually results in fewer taxes paid. By the way, that pass-through taxation is also one of the benefits of the LLC.

If you want to convert an LLC to an S Corp, you’ll be more attractive to investors, who prefer the latter structure for companies they put money into.

When to Incorporate and/or When to Form an LLC

If you’re convinced that a change in business structure is right for your business, now the question is around timing. I suggest converting your business structure before any major events come up, like funding, transfer of ownership, or selling the business. You want your business structure paperwork to be approved before any major business transaction.

The business structure you choose should feel right, and it should provide your business with ample benefits.

If you’re ready to change business structure formats, check out our free Business Structure Wizard to find the one that’s best for you.

The post Is Your Business Structure Really Working for Your Business? appeared first on CorpNet.

Choosing a business structure can be a tough decision for the new business owner. CorpNet wants to make the process easier.

This free, online tool helps small business owners navigate the process of picking the right business structure for their new business.

Launch the Wizard

The post LLC vs. PLLC: Which Structure is Right for Your Business? appeared first on CorpNet.

Yet too often, that initial passion is dampened by the realities of running the show. Working for yourself or starting a small business is difficult work. There’s no guidebook or map to show you the way. You might encounter a few bad customers, people who don’t pay their bills, competitors who undercut you, and business partners who don’t treat you fairly. With too much work, entrepreneurs can become tense, anxious, and unhappy.

If you think that happiness is overrated in business, think again. Research from the University of California, Riverside found that people who are happy are successful in many areas of life, and this success is partly due to their happiness (not vice versa). When you’re in a good mood, you’re more confident, energetic, and better able to work toward new goals. In short, a happy entrepreneur is a better entrepreneur.

With that in mind, here are five tips for staying happy amidst the inevitable stress and challenges of entrepreneurial life:

1. Don’t be afraid of failure

If you’re scared of failing, you’re going to be miserable as an entrepreneur. Failure is practically a rite of passage for successful entrepreneurs. Valuable lessons can be learned through the experience; you’ve probably heard that some VCs won’t invest in an entrepreneur who doesn’t have one failed business under his or her belt.

If you’re anxious about what might happen, think about the worst-case scenario. If your business or app falls flat on its face, how long will it take you to recover? How long will it take you to find a new job? Start a new business? In most cases, the worst-case is not as bad as you may think.

2. Don’t get bogged down in the negative

When you’re passionate about what you do, it’s hard not to take each critique personally. However, as an entrepreneur, bad news and rejection are just part of the game. For example, you might be rejected by an investor or incubator program. Your latest release may get a lackluster press review or your blog post got a few negative comments.

You can’t waste your time dwelling on each rejection, or honing in on the one negative comment. That’s a recipe for bitterness. Most importantly, by removing emotion from the situation, you’ll be better able to take away valuable lessons from each critique in order to tweak your product, pitch, etc. as needed.

3. Silence the inner critic

If you have perfectionist tendencies (as many entrepreneurs do), you’ll have to learn to let go. As an entrepreneur, success is tied to actually launching a product, a website, blog, mobile app, etc. If you try waiting for perfection, you’ll never make any headway. Once you’ve gotten something to 80% or 90%, it’s time to put it out for the world to see. Waiting to get that final 10% can significantly impede your progress – you might miss a market opportunity or let a competitor enter first. Remember that perfection is unattainable; sometimes ‘good enough’ is actually the smartest target.

4. Make time for yourself

Many people become entrepreneurs in order to have more control over their career or life, yet soon find themselves pulled in countless different directions. Instead of one boss, you’ll need to answer to ten different clients and investors. When you’re facing too many deadlines and too many people wanting your time, it’s easy to become tense and grouchy.

It’s important to take charge of your own schedule and set your own agenda. Instead of trying to please everyone, focus on the things that are a priority for your business. Actively manage people’s expectations; you can still say yes to everything, but frame it in terms of what’s realistic for you. And if you’re working seven days a week, you’ll burn out sooner and lose the passion you originally had. At least once per week (if not once per day), make some time to do something you love.

5. Remember why you started the business in the first place

When times get tough, it’s important to tap into that original passion that drove you to start a business in the first place. Maybe you wanted to build an awesome game or content curation tool. Maybe you wanted to make it easier, faster, or cheaper for people to do x, y, or z. You started your business because you wanted to share something with the world and you wanted to make a difference. When the stress or negativity is starting to drag you down, just step back and remember what has been driving you in the first place.

Editor’s Note: This was originally written by Nellie Akalp for Open Forum.

The post 5 Tips for Being a Happier Entrepreneur appeared first on CorpNet.

The S Corp can lower self-employment taxes

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• Know your LLC registration number: If you have incorporated your contracting business, make sure to include the LLC registration number on your application to the California Contractors State License Board (CSLB). According to a recent news release from the CSLB, many contractor LLCs have been rejected for a contractor license because they did not include an LLC registration number on their applications. When you form an LLC in California, you should get an LLC registration number. If you hire CorpNet to help incorporate your business, we can manage the paperwork and deliver you all of the relevant documentation once your business is officially on file with the state.
• Make sure your application is consistent with the Secretary of State information: When you incorporate your business by forming an LLC, you have to file a Statement of Information with the California Secretary of State’s office. Part of this Statement of Information includes reporting how many employees you have and who the key personnel are within your LLC. If you want to get a California Contractors State License, your state license application needs to be consistent with what is on file at the Secretary of State’s office, for example, with the same names and number of personnel. If there are any discrepancies, this can cause a delay in getting your California state contractors’ license approved.
• Don’t delay – form an LLC: In previous years, contractors who had incorporated as LLCs were ineligible for California state contractors licenses. This restriction kept many contractors from forming an LLC. Now that the state has lifted this restriction, we expect to see more and more contractors forming LLCs and incorporating their businesses, due to the personal asset protection and other benefits of incorporating. This means that there will likely be a backlog of applications as hundreds of LLCs file for state contractor’s licenses, and hundreds of other California contractors decide to form an LLC for the first time. So if you’re a California contractor who wants to form an LLC, don’t delay. Talk to CorpNet today and we can give you a free business consultation to figure out your options for forming an LLC. Then we’ll work with you every step of the way to file the paperwork and get it done right.

CorpNet is ready to help contractors form LLCs to do business in California with a California state contractor license. Please contact CorpNet today for a free business consultation and we’ll help you navigate the process of managing your business filings.

We’ll help you understand your options to incorporate with the right business structure. We can help you incorporate as an S-Corp or form an LLC to get your business up and running. We help entrepreneurs start a business by managing the necessary 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. If you require California business licenses or permits, we can help with that too!

The post Obtain Your California State Contractors License with an LLC appeared first on CorpNet.

You Get Sued

While most business owners are horrified at the prospect of being sued, it can happen, so it’s important to protect your business against this occurring. If you operate as a sole proprietorship and the judge says that you now have to pay this angry customer or supplier $10,000 and you don’t have that money in your account, guess where it comes from? The court can legally take your car, house, or other assets to pay that debt if the business is running dry.

Incorporating, on the other hand, separates your personal assets from the business. Creditors can never touch your personal assets if you are sued as a corporation.

You Get a Big Tax Bill

If you operate as a C corporation, you can be taxed twice: once on the profits of your company, and then again as a shareholder receiving dividends from the company. Who wants a bigger than necessary chunk taken out of their bank account?

Forming an S Corporation, on the other hand, means you’ll only be taxed once, and you’ll reap the benefit of pass-through taxes. That means that you simply report your business’ profit and loss on your personal taxes, and don’t have to file separate tax documents for the company.

You Want to Get Investor Funding

Your startup needs a cash infusion asap. The problem is, you’re a sole proprietor, and none of the venture capitalists you’ve talked to will touch your business. They want to work with incorporated startups so that their own assets can’t be touched, should you be sued or go bankrupt.

The easy solution here is to incorporate! Once you do, you’ll open your business up to more funding opportunities.

You Want Your Kids to Take Over the Business

While you can turn your Sole Proprietorship over to a family member, it amounts to them having to create a new business name and structure entirely to do so. A Corporation, on the other hand, will outlive you, and you can transfer ownership easily.

You Need Partners

Whether you need partners because you need investment, or you’re looking to bring shareholders with diverse experience into your company, you want to compensate them for their involvement in your company. The easiest way to do that is to incorporate so that you can allocate equity to each shareholder.

Now that you see specific scenarios where being incorporated is a benefit, why not incorporate a business with CorpNet? We’re here to answer your questions and get you the best business structure for your needs. Call us today!

The post Incorporate a Business: the Best Way to Protect Your Assets and Save Taxes appeared first on CorpNet.

Now, I appreciate advice as much as anyone, but there are certain pieces of advice that I could have done without when I started both of my legal filing services. Here are the ones you can ignore.

1. Find the Right Time to Launch

Folks, I’ll be honest. There’s no ideal time to launch your business. Life will always get in the way. And if you strive for perfection before you even reveal your products to the world…well, you’ll be waiting a long time.

Instead, be okay with imperfection. The faster you start your business and get your products out there, the sooner you can get feedback from your customers and go back and improve your offerings.

2. Quit Your Job

This is a rather absolute piece of advice, and can’t be applied to every wannabe entrepreneur. The question is: do you have enough money to quit your day job? You’ll need 6-12 months of savings to cover both your personal expenses and your business expenses.

You might be better off starting your business while you continue to have the security of a steady paycheck. Then when finances allow and you’ve got a steady customer base, cut the cord.

3. Expand What You Offer

In fact, the opposite is actually true. The more you narrow your products or services, the better you’ll do. While it might seem that offering more things to more people would increase sales, what it actually does is dilute your efforts.

Do a couple of things, and do them really well. You’ll become known for that.

4. You’re the Only One Who Can Do Everything Right

Actually, you’re more likely to get in your own way. Sure, when you first start out, you do everything out of necessity. But then you get busy. That’s when you should start hiring help in areas like marketing, accounting, design, and admin.

5. Do What You Love

Most newbie entrepreneurs don’t realize that, yes, while you start your business because you love this thing, this industry, this activity, after a while you usually end up not doing it. Let’s say you love to cook, so you open a restaurant. But after a few months, you’re so mired in administrative tasks that you don’t have time to cook. So you hire a chef.

You’ll still be in a field you love, but go into starting a business with open eyes and realize that you may be behind a desk more than anything else.

6. Enjoy Your Flexible Schedule

Again, there is truth to this for many business owners, but if your customers want your products during the hours of 10 to 5, that’s when you should be open. No one likes coming to a retail store that’s got up and down hours. Stick to what your customers expect.

Want my advice? (I’m smiling as I write that) Listen to all advice, then take it with a grain of salt. Apply it to your specific case, and take what you can from it.

The post 6 Pieces of Advice You Shouldn’t Listen to When Starting a Business appeared first on CorpNet.

1. Where You Incorporate Matters

Many business owners think they should incorporate in a state like Nevada so they won’t have to pay state taxes, but the opposite is actually true. Whatever state you operate in, that’s the state that will require you to pay taxes on any sales that originate in your state. So there’s no getting around paying your state taxes simply by filing your incorporation paperwork in another state.

2. You’ll File Your Income Tax Like Always

If you set up an S Corporation, you’ll continue to pay your taxes on your personal income tax forms like you always have. An S Corporation is not taxed separate from its owners or shareholders, and corporate profits and losses are “passed-through” and reported on the personal income tax returns of the shareholders, much like a partnership.

3. Your Personal Assets Will Be Protected…Usually

One of the biggest reasons I see business owners decide to incorporate is to keep their personal assets separate from those of the business. And they will be…in most cases. However, if you personally guarantee a loan or use your personal credit card to pay for a business expense, you enter gray territory and your assets might be used to pay for any business debt your company can’t cover.

4. You Can Raise Capital, but May Have Restrictions

Depending on the type of corporation you choose, you may be able to raise funds for your business. With an S Corporation, there are limits to how many shareholders you can have, so check to see what those limits are before you work with any outside investors.

5. You’ll Need to Keep up With Annual Paperwork

A corporation is more structured than an LLC in that you have to submit your Annual Statement and/or Annual Report to remain compliant. It’s a slight bit of legwork, but it’s easy enough to stay on top of with CorpNet’s corporate Compliance Portal. We even send you a reminder when it’s time to file paperwork!

6. It’ll Help You Boost Your Business Credit

Once you incorporate, you will be able to take out business loans and credit cards in the corporation’s name. This helps separate your personal and business finances, and helps you begin to build credit under your business name.

7. Your Nonprofit Can Even Be a Corporation

If you run a nonprofit business for charitable, educational or other purposes, you may qualify for a nonprofit corporation. Nonprofits cannot benefit the owners: all money above operating costs must be used to further the goals of the nonprofit. All expenses are thus tax-free. Approval is needed at both at the State and Federal (IRS) level.

8. You’ll Probably Need to File Two Tax Returns the First Year

Unless your corporation gets approved January 1, you’ll likely have your first year as a corporation split between being a sole proprietor part of the year, and a corporation the rest. So you’ll have to file two tax returns for the two types of businesses. For example, if your corporation was formed on June 1, you’ll need to file as a sole proprietor (or whatever your previous entity may have been) from Jan. 1 – May 31 and then file as a corporation from June 1 – Dec. 31.

9. You Don’t Need a Lawyer to Incorporate

Contrary to what you might think, a lawyer is not required to incorporate. You can do it yourself, if you don’t mind a bit of paperwork and hoops to jump through, or you can let CorpNet take the reins and get back to focusing on your business.

10. Customers Will Take You More Seriously

It’s a subtle thing, but you might see more business as a result of incorporating it. Having that “Incorporated” at the end of your business name instills trust in people, and they’re more willing to spend money with you.

Still not sure if incorporating is right for your small business? Download our free Incorporation Guide for more information.

The post 10 Things You Should Know About Incorporating Your Small Business appeared first on CorpNet.

Relationships Matter. A Lot.

You know that networking is important, but when you get busy, it gets moved to the back burner. But extraordinary entrepreneurs make the time to connect with others because they know those relationships are the cornerstone of their business.

Nurturing those relationships isn’t about walking into a networking event and spraying your business card around. It’s about sending a link to a contact for an article you think he would enjoy. Inviting a colleague to coffee to catch up. It’s about spending time with the people you’ve met in your business endeavors and really listening to them. If sales or referrals will come from it, it’s not going to be because you pushed your agenda; they’ll come because people being to trust you and want to help you.

You’re Never Done.

So you’re the #1 company selling whangdoodles in your town. That’s great. But will you be #1 tomorrow? It’s important to never rest on your laurels and constantly strive to find innovation in your company.

Both companies and products become extinct. Just look at Kodak, who once was king of film. Once its products died off, the company struggled to find a foothold in a changing market. Better to constantly adapt and innovate than to have that much bigger of a hill to climb once you tumble down.

You Need to Be Able to Accept Criticism…and Act On It.

No one likes being criticized. No one. And yet it’s a part of being a business owner. Your customers will tell you what’s wrong with your product. Your employees will tell you what’s wrong with your company culture. You can choose to act on these comments or ignore them. Just realize that the path you choose will determine your business’s future potential.

This is a Lifelong Journey.

You may not have seen your business as one that you’d be doing for the rest of your life when you first started it, but it’s quite possible that you will be a lifer when it comes to entrepreneurship. Whether that’s through a single business or multiple endeavors, you’ve got to face the fact that you may never be an employee again. For most of us, that’s great news. But it’s imperative that you see the big picture (and long game) and make your decisions accordingly.

Start your dream business today Start with the CorpNet Business Structure Wizard to determine which business structure structure you need to establish your new business and leave the rest to us. It’s free and easy… and you can file your new business paperwork online when you’re done!

The post What Successful Entrepreneurs Know (That You Don’t…Yet) appeared first on CorpNet.

• Get the Support of Your Family First – Even if your family isn’t involved in the day-to-day of your business, you still need their support and understanding. After all, this business is certainly going to affect them. You may have to work late or miss a family event from time to time. Make sure you communicate what your family should expect up front so no one is left feeling like they weren’t prepared for the repercussions you becoming an entrepreneur will cause.
• Set Goals Early and Often – I think a lot of newbie entrepreneurs don’t think about setting goals when they first start a business. They just want to get the business started and begin making money! But setting goals is a really easy way to set your sights on where you want to go. You might not hit your sales target for the quarter, but if you do your best to get there, you’ll likely do better than you would have without that goal. And goal-setting isn’t a one-time thing! I like to set New Year’s Resolutions for my business at the start of the year, but I also add to my list throughout the year. Make sure you measure your results against those goals and take actions to do better next time.
• Protect Yourself – I can’t tell you how many times I have told new entrepreneurs: protect your business and yourself! Forming a corporation or filing an LLC is such a simple thing to do, but the benefits extend long beyond your first year. Sure, you assume your business will never be sued, but there are no guarantees in life. At least if you’re running an LLC or corporation, your personal assets can never be touched if that does happen.
• Get Help as Soon as Possible – I get it. You’re really smart, and probably a Type-A personality to boot. You think you can do everything in your business, but the truth is: you can’t. At least, not for long. So the sooner you hire a freelancer, intern, part-time, or full-time employee, the sooner you can grow your business. Even if you think you can’t afford it, find a way. Start out with a small budget for just a little help, and as that helps you increase sales, increase that budget.
• Be Open to Ideas – Don’t be a know-it-all in your new business! Instead, be willing to learn from other entrepreneurs and find inspiration all around you.You’ll never stop learning, so be willing to find lessons even in your mistakes.
• Don’t Have Competitors; Have Partners – This doesn’t work for everyone, but consider whether the companies you consider the competition are real threats. Could you possibly partner with them so that you both end up with more business? Sometimes another company has more work than they can handle and would be willing to give some to you.
• Establish Your Expertise – You may not feel like an expert right this minute, but trust me: it won’t take long before you know a ton about your industry. Use that knowledge to your advantage and start sharing your wisdom with the world. Write great blog content to attract people to your site, and share your information through your social media channels.
• Be Willing to Take Risks – You’re already a bit open to risks, or you wouldn’t be starting a business! But don’t be afraid to try new things, implement ideas, and think big. The risks may be bigger, but so will the rewards be.
• Use Tools to Look Smart – I’m an advocate of having the right tools for the job. If something can be done faster and better by using software or an application, I’m all over it. So spend some time researching tools that will make your operations, sales, and marketing more efficient, then invest in them.
• Invest in Your Company’s Growth – Speaking of investing: do it. It’s too easy to say “I can’t afford that” and never spend even $10 to grow your business. But you aren’t doing yourself any favors that way. Spend what you can afford, and if you’re putting your money in the right places, that budget for growing your biz will grow with it.

The post Just Starting a Biz? Nellie’s Top 10 Pieces of Advice appeared first on CorpNet.