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)
- Most formal business structure.
- This structure is often not recommended for small business owners because of double taxation.
- 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:
- Business Structure Wizard
- Converting a business from state to state
- Purchasing an established business
Keeping in touch with Nellie:
Instagram and Facebook: @NellieAkalp
Email: [email protected]