Start A Business

Forming an entity can enhance the credibility and professionalism of your business.

Starting an LLC is also a smart way to protect your personal assets and build your business. With a few steps and the right documents, you can set up your corporation or LLC and be on your way to success. It will be great to sit down with you and you can share your dreams and concerns with me.

Steps to Start a business

1. Choose a Business Name:

Pick a unique name for your corporation or a name that includes “LLC” or “Limited Liability Company” and make sure it’s not already taken by checking your state’s business name database.

2. Appoint a Registered Agent:

A registered agent is someone who gets legal documents for your LLC. This can be you, someone you know, or a professional service authorized to do business in your state.

3.File Articles of Organization:

This document has basic info about your corporation or LLC like its name, address, and the names of its members. You file this with your state’s business filing office, usually the Secretary of State.

4. Create a bylaw or an Operating Agreement:

This is a document that outlines how your Corporation or LLC will be run and who is responsible for what. Even if your state doesn’t require it, it’s a good idea to have one to avoid future conflicts.

5. Get an Employer Identification Number (EIN):

An EIN is like a social security number for your business. You need it for taxes, opening a business bank account, and hiring employees.

6. Register for State Taxes and Get Business Licenses:

Depending on what your business does and where it’s located, you might need to register for state taxes and get specific licenses or permits.

7. Issue Stock Certification or Unit of Interest

Stock for corporation, or Unit of Interest for a limited liability company, also known as equity, represents a portion of ownership in the entity. When you buy stock, you are purchasing a piece of the company known as a share.

8. S Corporation if applicable

An S Corporation (S Corp) election is a special tax status that a business can choose with the IRS. It allows the business to be taxed differently from other types of corporations. Here’s what you need to know:

How Taxes Work

Pass-Through Taxation:

Normally, a corporation pays taxes on its profits, and then shareholders pay taxes again on their dividends (this is called double taxation). With an S Corp election, the corporation itself doesn’t pay taxes on profits. Instead, the profits go directly to the shareholders, and they pay taxes on their share. This means the money is only taxed once.

Things to Remember

Reasonable Salaries:

If shareholders work for the company, they must be paid a fair salary for their work. The IRS checks to make sure people aren’t avoiding payroll taxes by taking very low salaries and high dividends.

Profit Sharing:

Profits and losses are shared with shareholders based on how much of the company they own.

Pros:

Cons:

Choosing S Corporation status can help save money on taxes, but it comes with rules and paperwork. It’s a good idea to talk to a tax expert to see if it’s the right choice for your business.

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START A BUSINESS