Buyer Guide to Incorporation
How to Incorporate Your Business
Starting up a business and maintaining its profits at a steady rate is an extensive, yet rewarding experience. Hours of research is required when configuring a specialized and specific business plan, finding the appropriate vendors to work with, hiring experienced management and seasoned employees, and marketing your business to your target audience.
One of the important decisions you have to make about your business is the legal entity you want it to operate under. Granted, after you choose the legal entity you can change it later on as your business emerges; however, by making the right decision early in the start-up process, you will not have to worry about it later.
The most common business entity types you can choose from are a sole proprietorship, limited partnership, limited liability partnership, limited liability company (LLC), S corporation, or C corporation. Most businesses today form either a corporation or LLC after carefully reviewing the common characteristics associated with each and discussing with a qualified lawyer or CPA.
The common characteristics people review and research before choosing a legal entity include formation and whether or not you have to file with the state; duration and what happens to the company if you should die; liability and your responsibilities as the owner; operational requirements and how many laws and regulations you need to abide by; management and how much control you will have on the company’s operations; and most importantly, taxation and what tax and non-tax issues will affect you as the owner.
As you go through these characteristics with each entity, you should also start to write down your specific plans and goals for your company in order to make the right choice. There are other factors besides the ones above that will be relevant to your situation based on your needs and expectations.
Speak with an attorney specifically about your business situation and your industry to get a general overview and recommendations. Other individuals and business owners with similar business models can also assist with recommendations.
Choosing the right incorporation company for your business can be a strenuous task, but with the right resources and information, it can lend you and your business certain protections from liabilities and other matters. Remember to speak with a qualified professional such as your business lawyer first to get all the facts and figures. After you have all the information needed to make a solid decision, there are plenty of online resources to help you with the process.
In this guide, we’ll walk you through the different types of entities, general terminology, issues and general characteristics associated with each, costs and benefits, our tips for success and then help you compare pricing from several incorporation companies.