Your Ultimate Guide in Starting A Business (Part 2)
Wanting to start a business and knowing where to start one are two very different things. There’s an incredible allure to starting your own business, but how do you get started? If you want to know the complete guide of starting a business, you may want to read part one of this article…
Where To Start Your Business
While you may register a corporation in any state, most business owners find it more convenient to do so where they reside, and it’s usually the most economical option. There are, of course, rare exceptions.
The Benefits of Registering in Your Home State
There’s a convenience element to consider, even if your home state has greater taxes and levies. It’s a lot easier to take care of the paperwork when government offices are close by, and you’re familiar with the rules and processes.
Plus, there’s a significant probability that your home state will consider you to be doing business there, so you’d have to register the company in your home state anyway, using a foreign qualification, even though you formed it outside of the state.
If you start your small business outside of your home state, you will almost probably need to register as a foreign corporation and choose a registered agent in your home state. However, if you need to foreign qualify your corporation in the state(s) where it does business, the benefit of these lower taxes and fees is lost.
Find out which legal business entity is most suitable for you.
When starting a new firm, you must pick a business structure that is appropriate for your purposes. Here’s a quick rundown of options to help you figure out which one is best for you.
Benefits of an LLCs
A limited liability corporation, or LLC, is one of the most common structures for persons beginning a new business. This business structure keeps your personal and business funds separate, and your accounts are unaffected if your firm is sued or declares bankruptcy.
There are procedures, costs, and tax structures connected with forming an LLC, just as with most other businesses. An LLC, on the other hand, is reasonably simple to establish up and maintain.
Making a Sole Proprietorship Application
The simplest sort of business to start is a sole proprietorship.
There are no partners, officers, or shareholders to answer to, so you have total power. There are no government fees or paperwork to complete, no yearly reports to submit, and no public disclosures required.
On the other side, you won’t have any partners to assist you in getting your concept to market, your assets won’t be secured, and you won’t have access to investors when you’re getting started.
Creating a DBA
Though it doesn’t provide the same level of liability protection as an LLC, you’ll probably want to set up a DBA if you want to operate under a name other than your company’s legal name or if you’re a sole owner, a name other than your name.
There are a few small expenses and requirements to fill out, such as publicizing your DBA name in local print media.
Creating a Business Corporation
A corporation, like an LLC, is a legal entity that separates the business from its owner (s). A corporation, unlike an LLC, must have stockholders and a board of directors, and it will also distribute stock to its owners.
Corporations with less than 100 shareholders can function as an S company rather than a C corporation for taxation purposes.
When deciding on the optimal structure for your company, consider the advantages and disadvantages of each option. It is best to compare the different business structures; let us know in the comments which one of these fits your business the most? Read part three for more information about creating your own business…