The following are the key steps in starting your own company- an LLC or an Inc.
1) Selecting the right entity structure : It is very important to determine if you would like to start an LLC or an Inc. There are various important tax and legal implications. Therefore, ens...
[Read More]Limited liability companies have gained popularity the past few years and here are the top reasons why:
1) Easy setup: Unlike other legal structures, LLC are the easiest to setup.
2) Lower taxes: There are tax benefits of starting LLC. Few states have lower franchise and ...
[Read More]Sole Proprietorship
A sole proprietorship is the most simplest form of business structure. It is also the easiest to start. As you are the sole owner of the company, you are fully responsible for the success or failure of the business. Any profits you generate will pass through the owner...
[Read More]An S Corporation is a pass-through entity which essentially means it does not pay taxes. Its members pay taxes once the profits or losses are distributed to them. As part of S Corporation setup, all owner employees will need to be paid reasonable salary according to the market/ industry rates. [Read More]
What is the difference between S corporation, C Corporation, and LLCs?
Firstly, its very important to learn about entity structure & tax classification which are 2 different elements outlined below.
1) Choosing the right entity structure - LLC/I...
[Read More]Is it possible to start a business without incorporating as an LLC or INC?
Ofcourse, yes. Infact LLC has gained popularity the last few years. Its definitely possible to start your business as a sole propreitor after you review the pros and cons of incorporating.
Please ...
[Read More]Sole propreitorships are the easiest to start. There may be additional business licenses required as per your industry, so please check out your state's website for additional details.
LLCs protects from personal liability. Also LLCs provides greater flexibility as you grow your business, ...
[Read More]DBA refers to 'doing business as'. Below is a simple explanation of when to register a DBA.
1) Sole proprietor: You are a sole proprietor and you do not want to use your personal name for privacy reasons. You can file a DBA-doing business as with your state and register a DBA. This will al...
[Read More]Is the activity a hobby or a business? If you are going to generate additional revenue through marketing, selling blog subscriptions or any related consulting activity as a blogger, then you can incorporate LLC. This applies if you are operating as a business.
If this is a hobby, then ex...
[Read More]Hi
We would highly recommend reviewing projected income for next 3 years with your CPA. Based on this information your CPA can help you select the best tax classification.
The 2 preferred are as follows : Single member LLC. You will be taxed as a sole propreitor. All income/losses ...
[Read More]Before you decide setting up your legal entity, we highly recommend that you discuss taxation with your CPA or tax professional. Request a report that outlines your estimated federal & state taxes based on your projected income. It should provide the following information.
Yes, you can operate multiple businesses under one legal entity.
Below are few pros and cons of operating under single vs creating multiple businesses under different entities.
Scenario 1 - Single LLC
The easiest way is to just keep 2 different bank accounts, credit and debit cards for your personal and business. This will eliminate lot of work and book keeping costs for your end of the year tax filing.
If for some reason, you used personal funds to pay business expenses then you can ei...
[Read More]Frequently asked question relating to hidden costs of LLC vs Corporations
LLC, in fact, have lower maintenance costs as compared to a C or S Corporation. Corporations may have additional compliances.
Depending on y...
[Read More]Hi
There are many states that have low LLC state filing fees like Arizona, New Mexico, Ohio, Mississippi, Missouri. ($50-$100 range)
However, for most non-residents, Delaware is very popular. This is because of the well-established business law processes & procedures in Delaware...
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There are many states that have low LLC state filing fees like Arizona, New Mexico, Ohio, Mississippi, Missouri. ($50-$100 range)
However, for most non-residents, Delaware is very popular. This is because of the well established business law processes & procedures in Delaware...
[Read More]It is not necessary to form LLC to get started. You can always register once your business grows. However, just from a business standpoint, your personal assets can be used to pay business debts if any.
Therefore, many chose to just start an LLC. Also, as your business grows you can opt fo...
[Read More]Each state may have different rules. Most states in their LLC application form and instructions, will provide you details of acceptable names/words that can be used.
For eg: In Texas, form 205 LLC application form - first line states Limited liability company, Limited company or an abbrevi...
[Read More]Starting a business today is much easier with so many online incorporation services and network of vendors who can provide you with all the basic needs to start your own business.
The following are the basic steps for launching your business :
1) Preliminary research phase: Understa...
[Read More]Starting a business today is much easier with so many online incorporation services and a network of vendors who can provide you with all the basic needs to start your own business.
The following are the basic steps for launching your business :
1) Preliminary research phase: Unders...
[Read More]No, you are required to be incorporated to use 'Inc'.
[Read More]In simple terms, from a business perspective- as the word indicates it is limited to your investment in your business.
So, if there are any personal assets - these cannot be used to satisfy business debts. This is a big advantage and is a layer of protection for the business owners.
Hi
Each state may have different rules. Most states in their LLC application form and instructions will provide you details of acceptable names/words that can be used.
For eg: In Texas, form 205 LLC application form - the first line states Limited liability company, Limited company ...
[Read More]The choice of entity structure really depends on your long term goals, are you self-funding or raising venture capital, your projected income for the initial few years etc.
There is a major difference in how profits are distributed in each of these entities and also how losses will be hand...
[Read More]It really depends on your type of business, your projected income for the first few years etc.
As a sole proprietor, your personal assets can be used to pay business debts. Also, if there are any law suits, you may be held personally liable. Therefore, many prefer opening LLCs or corporati...
[Read More]You can operate any business as a sole proprietor. One exception which I would like to mention is :
Businesses that require Professional licenses: Few professions like attorneys, CPAs etc require a license to operate a CPA & law firm. So, unless you have a license you...
[Read More]Yes, a sole proprietor can outsource accounting or tax work. In fact, many businesses outsource these services so they can focus on their core business.
** Our response to question posted on quora
[Read More]In short, it is not required to start LLC for Amazon business. You can start out as a sole proprietor but there are few risks. Your personal assets may be used for payment of business debts etc.
There are few advantages of incorporating and also based on your projected income, there ar...
[Read More]n general, there are many benefits of establishing your business as a LLC. For eg: personal assets cannot be used for business debts. Also, all contracts and agreements are now between your LLC and the healthcare providers/physician networks etc
From a tax perspective, certainly establishi...
[Read More]EIN is assigned by IRS to the legal entity that was created. Employer identification number is not changed by the change in ownership. Therefore, a short answer to your question is you do not need a new EIN if only the ownership of the LLC has changed.
Also, you will need new EIN only if i...
[Read More]In general, most states allow you to operate any business activity under one LLC as long as it is for lawful activity.
Scenario 1 - All under one LLC
From tax & accounting point of view, the costs will be lower if you keep all your businesses under one...
[Read More]Before you decide to setup either an LLC or an INC, we highly recommend that you discuss taxation with your CPA or tax professional. Request a report that outlines your estimated federal & state taxes based on your projected income. It should provide the following information.
It really depends on your projected income for the next 3 years.
The 2 popular ones for Physicians are usually Sole Proprietor i.e Single member LLC. Under this tax classification, all income and losses will flow through the LLC. So, net business income/loss will reflect on your 1040 Indiv...
[Read More]Firstly, its very important to learn about entity structure & tax classification which are 2 different elements outlined below.
1) Choosing the right entity structure - LLC/INC
2) Choosing the correct tax classification- sole proprietorship ( 1 member LLC), P...
[Read More]Conversion to LLC to C Corporation is complex. This is a major decision. You will incur compliance costs & also your CPA a will need to close LLC books and handle all tax/payroll compliances.
Also, as a business owner/founder you will later realize that your time will be spent on con...
[Read More]An important step is also choosing the right tax classification and understanding your sales tax nexus as you are a online company. This is so you avoid any surprises later.
LLCs can be taxed as S, C, Sole proprietor(single member) or partnerships (multi member).
Before you form you...
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This question does not provide sufficient information. The best way to handle this would be to discuss your projected financials with a CPA for the first 3–5 years.
A short answer to your question, converting from S to C Corporation is relatively easier, less time consuming and...
[Read More]Hi
Assuming you already have your business plan and other items to get started, the following are the basic steps:
This is one of the most FAQ on Quora. Please see below article from our blog.
Overall, it depends on your projected income or losses initial few years. I would highly recommend that before setting up your entity you understand how profits or losses are handled.
For one member busine...
[Read More]There are many websites for LLC formation. In addition to this, many CPA firms also provide this service. The main advantage is that they can help you evaluate your tax situation & suggest the best options. Also, many offer accounting and business consultation services which you may find very...
[Read More]Delaware is a very popular choice for technology businesses. Also, most Fortune 500 top companies choose Delaware because of the well-established business law system.
This is also a very popular question on Quora, so a short response would be if you are raising VC capital or banks then C C...
[Read More]Hi
It varies by state.
In many states, as soon as your application has been accepted and the company has been registered, you will be able to download a copy from the state website.
I am assuming by stating ‘original certificate’ you are referring to the stamped copy from...
[Read More]It depends on various factors.
In most situations, your bank should be able to assist. They may not allow any new transactions.
An important point to note is that you should ensure your books and taxes are handled properly. They should reflect this new activity and you should file your final tax return.
Secondly,...
[Read More]You can choose a registered agent and provide that in your company formation documents. The other option is choosing a mailing address service that collects mails on your behalf, they may also serve as your registered agent eg: Virtual offices
** Based on our response provided on...
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It depends based on your long term goals. Sole proprietorship is the easiest to start but has some risk. Your personal assets may be used to pay off your business debts if there are any legal issues.
For this reason, many choose LLCs. There is an additional advantage of incorpora...
[Read More]This is also a FAQ on quora. Usually, Delaware C Corporation is a popular choice for SAAS. Delaware is popular because of the well established legal system. Many top Fortune 500 companies were established in DE.
Secondly, eventhough you are registered in DE you may need to register again i...
[Read More]In general, the majority of tech startups choose C Corporation if they plan on raising venture capital. They are incorporated in Delaware and also have another entity in CA or the state they are physically located.
We also see many S Corporations especially technology consulting businesses...
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