Legal Startup Tips, Episode 91

with Nellie Akalp on February 11th, 2016

Most freelancers begin as sole proprietors. It’s an inexpensive way to start, especially when you’re trying to land your first few clients or when freelancing is really just a side-gig.

But as you start to grow, how do you know what type of legal business entity is right for you?

Let me introduce you to Nellie Akalp, an entrepreneur and legal business expert.

Who is Nellie Akalp?

Nellie is a mom of four children who is married to her husband and business partner of 18 years. She and her husband started their first online legal document filing service in 1997 in their small apartment living room after purchasing a domain name for $100. In 2005 that company was acquired by Intuit for $20 million.

They soon found out that the corporate way of Intuit was not a good fit for them so they stepped down from the previous company and took a few years off. Too motivated to retire young, the couple got back to work in 2009 and launched CorpNet.com where they help entrepreneurs start, grow and maintain their ventures. Throughout her career, Nellie has formed well over half a million LLCs for entrepreneurs across many industries.

Nellie’s Legal Startup Tips for the Entrepreneurial Community

I’m so excited for this episode – it fits snugly within our topic this season of growing your business skills.

Join us as we talk about topics like business structure basics, why incorporate, what state to incorporate in, when to incorporate, and other legal startup tips. Hear her entrepreneurial story and be inspired to go after YOUR business dreams.

Watch this episode

Episode Transcript

Essential Tips for Business Startups:

You need comprehensive services when setting up your business.
If you are providing a service or product that is generating income, you are going to be taxed.
CorpNet provides a Business License Compliance package to help you set up a business in your state. They work strictly in the US and can help with research in Canada and Europe with a business forming within the United States.
If you do not set up your business structure then you are considered a Sole Proprietor where there is no asset or liability protection. Any income will be reported on a Schedule C as part of your personal income tax.
There are three business structures (Corporation, S-Corp and LLC)

Corporation

Most formal business structure.
This structure is often not recommended for small business owners because of double taxation.

S Corp

Starts out as a C Corp by filing an article of Incorporation with your state.
You then file a subchapter S with the IRS (form 2553). This avoids double taxation as a small business owner.
This structure allows asset and liability protection along with credibility with an added layer of privacy.
You can be an employee of an S Corp.

LLC – Limited Liability Corporation

Nellie Akalp refers to this structure as “You get to have your cake and eat it too.”
You have the benefits of liability, asset protection and privacy.
There are minimal formalities with an LLC.
Anyone can become an LLC (Trust, an Estate, a non-US resident).
You do not take a paycheck from an LLC. You take a draw.

Pro Tip: Always work with your tax adviser, CPA or Financial Adviser to find out what the best setup is for you as a small Business Owner.

Note: Not all states require the registering of fictitious business names or DBAs.

Links for this Episode:

Keeping in touch with Nellie:

Twitter: @CorpNetNellie
Instagram and Facebook: @NellieAkalp
Email: [email protected]
Phone: 1-888-281-7111