Incorporation is a necessary step that small business owners must take in order to launch their company to the next level. As intimidating and complicated as the process might seem, it doesn’t have to be so difficult!
Turning your small business into a corporation can be done quickly and effectively with the right guidance, preparation, and legal framework.
Business Incorporation: The Basics
By definition, incorporation is the process of registering your business as a corporation. This offers specific tax advantages and liability protection to owners depending on the location and nature of the company.
There are four types of corporations in the United States: S-corporation, C-corporation, Limited Liability Company (or LLC), and Non-profit. Here’s a brief overview of each type of business corporation:
- S-Corporation: Whereas C corporations are taxed separately from its owners, S corporations are not. S corps are only allowed to have 100 shareholders, and owners elect to pass tax income through those shareholders rather than at the corporate level.
- C-Corporation: C corporations are corporations that are taxed separately from its owners. C corps have no limit on the number of foreign or domestic shareholders they can attain
- Limited Liability Company (LLC): Compared to C and S corporations, LLCs are much more flexible company structures that are best suited for single business owners for tax and organization purposes.
- Non-profit: Not-for-profit organizations are different than C-corps, S-corps, and LLC company structures in that any and all extra revenue is used to supplement business goals rather than for personal profit.
Each corporation has its own set of unique registration requirements and advantages. Do your research or consult expert incorporation services advisors like National to discuss which type of corporation is best for your business.
Top 3 Benefits of Incorporating Your Business
- Personal Asset Protection: Incorporating your company will help you to reduce risk and protect your personal assets. Creditors can only seek payment from your corporation and not your personal belongings, like your home, cars, and other properties.
- Build Business Credibility: Credibility is the key to success for businesses of all sizes. Your business will become more credible and gain the trust of investors, employees, and potential customers after earning the “Inc.” at the end of its name.
- Achieve Your Financial Goals: Corporations receive the financial assistance and services they need in order to achieve their business goals much easier than small businesses and startups. Corporation owners are offered better terms, lower rates, and larger amounts as opposed to small business owners.
If you’re interested in protecting your assets, increasing your credibility, and acquiring more capital, then let’s discuss how to incorporate your business.
How to Incorporate Your Business in 3 Simple Steps
Depending on the nature of your business and where you’re registering your corporation, the incorporation process typically takes up to six weeks. Follow these three simple steps to expedite the process, and complete your registration as easily and efficiently as possible.
- Have A Plan: Before you register your company, you will need to answer specific questions in order to complete and file the necessary paperwork. Some of the many important details you will need to figure out before incorporating your company include a business name, registration location, corporation type, nature of the business, a board of directors, how to record meeting minutes, etc.
- Contact An Expert Advisor: The incorporation process can be complex and stressful for business owners who don’t have any legal knowledge, but it doesn’t have to be. Expert advisors are readily available to help you handle all of the lengthy paperwork and legal document requirements. Incorporation experts at National provide you with the best legal framework to eliminate risks and submit your application in as little as 24 hours.
- Free Consultation: Many incorporation service providers offer free consultations to business owners who are looking to register their company. All you have to do is fill out a simple questionnaire, then you’re on your way to obtaining your incorporation status.
Incorporating your business doesn’t have to be so hard. With the right preparation and help of expert advisors, you can expect a fast, successful incorporation experience that covers all of the legal bases so you don’t have to worry about a thing.
Key Next Steps After You Incorporate
Now that your business is officially a corporation, you need to take care of a few important things to ensure you’re operating lawfully and you’re able to take full advantage of the tax benefits of incorporating:
- Handle all the legalities. Contact your county or city to find out what licenses and permits are required for your industry, and obtain all that are necessary. Without the right licensing, you could be subject to fines or even lose your business. You also need to apply for an employer identification number (EIN) from the IRS in order to open a bank account and file taxes for your corporation.
- File a Doing Business As (DBA) form. A DBA enables you to legally do business under an entity name instead of your own. If you plan to operate using more than one form of your company’s name, you’ll need to file a separate DBA for each one.
- Establish a business bank account. Close any existing accounts for your business under its previous structure, and open a new one specifically for the corporation. Having an account just for your business fulfills the legal obligation to keep corporate and personal funds separate. Establishing an account also makes it easier to get a loan or line of credit in the future.
- Talk with an accountant or tax advisor. Corporations have different tax obligations and perks than sole proprietorships, and professional advice takes the confusion out of all the associated paperwork. Find someone who has experience working with businesses in your industry and who knows how to leverage your corporate structure to minimize the overall tax burden.
Take Your Business To The Next Level In 2019!
Are you ready to incorporate your small business? Contact our team of expert advisors for a free consultation! Call (877) 482-3008 or fill out our 10-second form online to sign up, and get started with the registration process today!