Help me incorporate a small business!
January 12, 2010 11:25 AM Subscribe
Any tips on incorporating a small business?
My wife and I would like to incorporate (LLC) a home business for tax and liability reasons. Nevada is not too far away so the plan is to incorporate there.
I have a couple of books on the matter but other than that I am pretty darn green in the matter of incorporation. I know my business and I know how to make money at it but I've never incorporated before.
Anybody have any horror stories or gotchas or pot holes I should know about the act of incorporating? Anything you have would be welcome.
(This is under "law and government" rather than "work and money" because I'm interested in snags and problems in the "government" side of starting a business--that is the act of incorporation. Thanks.)
My wife and I would like to incorporate (LLC) a home business for tax and liability reasons. Nevada is not too far away so the plan is to incorporate there.
I have a couple of books on the matter but other than that I am pretty darn green in the matter of incorporation. I know my business and I know how to make money at it but I've never incorporated before.
Anybody have any horror stories or gotchas or pot holes I should know about the act of incorporating? Anything you have would be welcome.
(This is under "law and government" rather than "work and money" because I'm interested in snags and problems in the "government" side of starting a business--that is the act of incorporation. Thanks.)
My wife and I needed to form an LLC for accounting and tax reasons.
After doing a little searching, she did the application online (State of Michigan, michigan.gov) and mailed the papers with the fee to the state.
Done.
posted by Drasher at 11:46 AM on January 12, 2010
After doing a little searching, she did the application online (State of Michigan, michigan.gov) and mailed the papers with the fee to the state.
Done.
posted by Drasher at 11:46 AM on January 12, 2010
Best answer: IANYL. That said, the Good Admiral Haddock is correct. You don't incorporate an LLC, you form and register it -sometimes where it is located, sometimes in a "convenient" state with liberal registration and tax laws. You should investigate your own state's business organization laws and also consider where you may be held to be taxable, depending on the location of your business and the state of registration for the LLC. You can easily do this without a lawyer, but legal and tax advice should always be considered before forming any business, no matter how small. There are books, websites, and often local government or business community organizations that can assist you in the process for little or no cost.
You can form and register an LLC in a matter of hours. You can use a service or do it yourself, usually downloading the forms from your state corporations office.
And, remember, when incorporating or forming an LLC, you are creating a legal entity that requires frequent tax and financial reporting requirements. Check your county government's website. Many have pages on the steps to establish and register a business within their jurisdictions. For example, home-based businesses often need to obtain permits to operate in residential zones, even when the location is merely an office or location where company records are kept. The formation of an LLC is usually a smart move for small business owners, but its formation does create an ongoing obligation for regular reporting and accounting, including the filing of separate tax returns and reports to partners. Generally a much easier process than forming the old "S" corporations (which are still a good option for some), but still an action that will force your business to remain organized and in ongoing compliance with a number of state and local entities.
posted by flyingrock at 12:02 PM on January 12, 2010
You can form and register an LLC in a matter of hours. You can use a service or do it yourself, usually downloading the forms from your state corporations office.
And, remember, when incorporating or forming an LLC, you are creating a legal entity that requires frequent tax and financial reporting requirements. Check your county government's website. Many have pages on the steps to establish and register a business within their jurisdictions. For example, home-based businesses often need to obtain permits to operate in residential zones, even when the location is merely an office or location where company records are kept. The formation of an LLC is usually a smart move for small business owners, but its formation does create an ongoing obligation for regular reporting and accounting, including the filing of separate tax returns and reports to partners. Generally a much easier process than forming the old "S" corporations (which are still a good option for some), but still an action that will force your business to remain organized and in ongoing compliance with a number of state and local entities.
posted by flyingrock at 12:02 PM on January 12, 2010
to add to flyingrock's comment, though the formalities may seem picky, not following them, whatever they may be, could be a Very Bad Thing, since doing so may dissolve the liability protection you enjoy by forming an LLC.
posted by craven_morhead at 12:09 PM on January 12, 2010
posted by craven_morhead at 12:09 PM on January 12, 2010
Response by poster: @flyingrock
For example, home-based businesses often need to obtain permits to operate in residential zones, even when the location is merely an office or location where company records are kept.
Thanks. That's an example of the kind of thing I'm looking for.
Any other specific detailed "heads up," nightmares, war stories, or gotchas would be appreciated.
posted by Lord Fancy Pants at 3:30 PM on January 12, 2010
For example, home-based businesses often need to obtain permits to operate in residential zones, even when the location is merely an office or location where company records are kept.
Thanks. That's an example of the kind of thing I'm looking for.
Any other specific detailed "heads up," nightmares, war stories, or gotchas would be appreciated.
posted by Lord Fancy Pants at 3:30 PM on January 12, 2010
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Also, geographic proximity has nothing to do with anything. Do some research and thinking as to whether the LLC laws of another state (e.g., Delaware) might be more suitable for you. Good luck with your venture!
posted by Admiral Haddock at 11:36 AM on January 12, 2010