Sunday, April 4, 2010
Incorporating Your Small Business
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If you have a small business there comes a point in time when you will need to make a decision on whether or not you need to incorporate.
Almost every small business starts as a proprietorship or a partnership and as they grow they ponder over the idea of incorporating.
One of the primary advantages of incorporating your business is that it offers limited liability. If a business is under a sole proprietorship the liability of the business is the responsibility of the proprietor. When the same business is incorporated, the responsibility will depend on the amount of stake or share in the company.
Another salient feature of incorporation is that if you have a debt under the name of the corporation you as an individual will not be held responsible for it. With a proprietorship or partnership, a similar debt would have resulted in the seizing of your assets.
The second most important advantage of incorporating your small business is continuance. In comparison to a sole proprietorship a corporation has a larger life span. In fact legally it has an infinite life span.
If the company shareholders leave the company, die or if the ownership changes. A corporation will always exist.
Business is driven by capital and as a corporation it is easier to raise capital. Influx of capital or funds will help the business to develop, grow and bring in more funds. When you incorporate your small business, you are not only able to borrow as a corporation, but you can also sell shares and raise equity capital.
If the key benefits of incorporating are in line with your companies goals you can begin the process of incorporation.
- The first step to incorporation is to choose a corporate name and have a proper business address. You can not run corporation out of home unlike with a sole proprietorship.
- Secondly, you need to select the state in which you will be incorporating. Your home state may not be the best state for incorporation. You should Chose the state that will derive maximum benefit.
- Thirdly, you need to select the type of corporation that will most benefit your company. Speak with your accountant, business consultant and/or legal consultant to determine what type of entity will be the best for your business. It may be a LLC, an S corporation or maybe a C corporation.
- The next process is to choose the type of share. As a corporation, you can issue common stock as well as preferred stock.
- Next, you will need to obtain a Certificate of Incorporation, which is normally available with the Secretary of State's office.
- Lastly, you need to process and file your incorporation documents. This process can be taken care of by a registered agent or an attorney.
Article Source: Chris Howard
Labels: incorporating, incorporating your small business, small business, your small business
Thursday, April 1, 2010
How to Incorporate Your Small Business
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When you are looking to incorporate, small business solutions can include online incorporation. There are several online services available that provide all of the forms and information needed so that you get the type of incorporation that is appropriate for your business needs.
When you think about how to incorporate, business owners have several options available. You might choose the LLC, or limited liability company structure, an S-Corporation or C-Corporation format, or a non-profit incorporation model. With all of these business structures, there are forms to fill out and fees to pay in each state in which you will do business.
An LLC combines the advantages of being a sole proprietor with the tax and liability protection advantages that come with incorporation. An LLC can be made up of only one person--other structures require a board of directors. In this format you will usually pay self-employment tax on profits you take out of the business. No shareholder meetings are required, and the recordkeeping is easier than in other incorporated business structures.
When you are incorporating, business owners often choose the C-Corporation model. In this format, you will need to elect a board of directors, and a group of shareholders must take major business decisions under consideration. The board of directors handles the daily management of the company. You may sell stock in your company to shareholders, which is a great way to raise money for business purposes, and you can deduct the cost of employee benefits from your business tax obligation. C-Corps are required to hold annual meetings and keep minutes of them. This format often works best for larger businesses.
An S-Corporation is named after the Subchapter S code of the Internal Revenue Service's tax laws. The shareholder/owner can pass corporate earnings and profits straight onto his or her personal tax return, and all workers at an S-Corp must receive "reasonable compensation standards," according to the IRS. S-Corp dividends are required to be distributed to shareholders based the number of shares they own.
When you say to yourself that it's time to incorporate my business, online incorporation can be a great first step in meeting that business goal.
Article Source: Wayne Hemrick
Labels: how to incorporate, how to incorporate your small business, s corporation
Monday, March 29, 2010
Legal Book Review - Incorporating Your Small Business
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If so, there is a book that I would highly recommend, and one that I have in my own personal library. Interestingly enough, this book has been on my library shelf for 30-years. And when I was clearing out all the old books, donating some and giving others away, I decided to keep it. Not because I could use this same book today to incorporate a business, I can hire a lawyer to do that.
Rather, because I think the history, and arguments for and against incorporating a small business are discussed at length, and they still play today. The name of the book is;
"How to Incorporate; A Handbook for Entrepreneur and Professionals," by Michael diamond and JL Williams, 1987.
Boy, have things changed since 1987, still much of the philosophy and definitions of course and all the history is the same, but the forms are much different and now there are LLCs which they didn't have at all back then. This book is extremely interesting because it helps us understand the evolution of corporations in America both large and small. The flow of business law is quite interesting in that regard. Indeed, I hope you will please consider this.
Article Source: Lance Winslow
Labels: book review, incorporating your small business, legal book review, your small business
Friday, March 26, 2010
Incorporating a Small Business: S corporations versus C corporations
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The similarities between S and C corporations are as follows:
- Both S and C corporations are both separate legal entities that offer limited liability protection. If, for example, the corporation is sued only the corporation's assets are at risk. The assets of the board members or CEO are usually safe.
- An S Corporation is essentially a C Corporation that has a special tax status with the IRS, created by filing form 2553. The articles of incorporation that are filed with the state are same.
- Both entities must hold annual shareholder's meetings. Meeting minutes must be kept with the corporate records. Failure to follow this procedure can result in a judge's decision to 'pierce the corporate veil' and hold the corporation's owners personally liable for any penalties or debts.
- S and C Corporations differ greatly with regards to taxation. With S corporations any income or loss generated by the business appears on the personal tax return of the owners. This is often referred to as a "pass-through" tax entity.
- C corporations are often referred to as separately taxable entities. As you've probably already guessed, any gains or losses do not appear on the owner's personal tax records.
The reason is this: Dividends paid to the small business owners from corporate profits may be taxed twice. The IRS can tax both the corporation and the owner.
- C Corporations can have an unlimited number of shareholders while S Corporations are restricted to no more than 100 shareholders. As a small business owner this shouldn't be much of a problem.
- S corporations cannot have shareholders that reside outside of the United States. Practically anyone can own shares of a C corporation, regardless of where they reside.
- Also, S Corporations ownership is largely restricted to individuals. C Corporations, other S Corporations, LLCs, partnerships and many trusts cannot own shares of an S corporation. C corporations can sell shares to individual or other legal entities.
Article Source: Jacob Wren
Labels: C corporations, incorporating, incorporating a small business, S corporations, S corporations versus C corporations
Tuesday, March 23, 2010
The Advantages of Incorporating Your Small Business
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Incorporation could be the right step for you if you're planning to grow your business going forward. Incorporation will make it easier for you to attract additional funding, either in the form of capital investment or loan finance. Also, should your business hit financial difficulties in the future, incorporation will give you limited liability protection from the company's debts and liabilities. We'll discuss these benefits more fully below.
Firstly, let's discuss why incorporating your small business makes it easier to raise additional funding for the growth of your company.Incorporation provides your business with a formal share structure, and so the issuing and valuation of shares becomes significantly more straightforward, making it easier to raise funds via additional capital investment.
Incorporation also gives your company increased credibility with the financial institutions and therefore makes it easier to attain additional finance.
Next let's look at the subject of personal liability protection.
When you incorporate your small business, it's status changes to become a totally independent legal entity. As a result, you get personal liability protection from any debts incurred by the business. Once incorporated, as a shareholder you will only be personally liable for the debts of the company up to the amount of equity you invested in the newly formed company.
In other words, the business's creditors will only be eligible to payment of amounts owed from the assets of the incorporated company and not from the personal assets of the shareholders and directors.
Personal liability protection is obviously one of the most attractive benefits of small business incorporation. It effectively removes the risk to your personal assets that comes with being the owner of a small business.
As well as the benefits already mentioned, there may also be tax advantages to incorporating your small business.
Before you decide for sure to start the small business incorporation process, you should always seek professional advice from a qualified financial expert, as individual circumstances are different.
Article Source: Richard Taylor
Labels: advantages of incorporating, advantages of incorporating your small business, incorporating your small business, small business
Saturday, March 20, 2010
What to Consider When Incorporating a Small Business
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Labels: business, incorporating a small business, what to consider when incorporating a small business
Friday, February 19, 2010
Avoid the #1 mistake that KILLS new websites
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Today I have a new resource to tell you about that will stop you
from making the common start-up mistake that KILLS many new
websites...
It's called the "Ebusiness Start-Up Handbook," and it's a
must-read for anyone who wants to build a profitable long-term
ebusiness on a solid foundation.
Download it, and you'll avoid wasting massive amounts of time and
money getting your new business started.
What I like most about this Handbook is that it uses simple
language and lots of examples and graphics to clearly explain the
step-by-step process you need to follow to find a lucrative
online market with minimal competition.
Start your website *without* doing this critical groundwork first,
and prepare for a long and costly battle...
You'll struggle to attract visitors, to get ranked in the search
engines, and to convert the few visitors you do get into buyers.
Worse, you could find yourself going head to head with the
Internet's toughest -- and most well-funded -- competitors, like
Amazon.com and eBay.
The "Ebusiness Start-Up Handbook" was produced by the experts at
the Internet Marketing Center, who have generated over $100
million in sales online, so you know you can trust their advice.
I highly recommend you take the first step toward financial
independence by downloading this Handbook right away. You'll be
giving your new website its best chance of success.
Download it now at: Ebusiness Start-Up Handbook
Labels: e commerce, e commerce start up, earn extra money, earn money, earn money at home, earn money online, ebusiness, ebusiness ecommerce, ebusiness solution, ebusiness solutions, ebusiness strategies
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