Legal Startup Tips with Nellie Akalp, Episode 91

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.

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.

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