Intro:
Before you begin
Step 1:
Understand your options
Step 2:
Understand the advantages of incorporation
Step 3:
Understand the disadvantages of incorporation
Step 4:
Consider the S corporation
Step 5:
Understand LLCs
Step 6:
Understand sole proprietorships
Step 7:
Understand partnerships
Step 8:
Consider professional help

2torial #0907:
Learn2 Choose a Business Entity (Continued)

Consider professional help

If you have any doubts about which status your business should have, you should seek professional advice--especially if investment levels or potential profits are large. The process of registering your business is fairly simple. The real question is: what kind of business status should you seek? The following professionals can help:

Lawyers. Legal advice is invaluable along the road to running a successful business. Lawyers can help you draw up partnership and other investor agreements; ensure that you meet all requirements (particularly if you incorporate); understand any special liabilities your business may entail (so you can identify potential hazards); and understand how to register your business with state and local authorities.

Accountants. A good accountant can help you determine the tax consequences of the business entity you choose. In addition, an accountant may be able to advise you regarding the state in which you should set up your business. For example, Delaware and Nevada both offer special tax and fee breaks (and you don't even have to live or do business in these states to be registered there). On the other hand, such a move could actually increase your tax burden if you don't understand all the implications.

Incorporation specialists. Some companies specialize in shepherding new businesses by creating a corporation or LLC. They'll make sure the name you've chosen is still available, register your business, help you request the correct tax status, and handle the added paperwork if you decide to register your business in another state. Fees vary, but they're generally in the several hundred dollar range. You can find incorporation specialists on the Internet or in the yellow pages under "incorporating services."

Whether or not you seek professional help, take your time as you choose the right status for your business. The right decision could mean significantly more money in your pocket and, in some cases, much less red tape.

-end-

Learn More!

or

All steps at once
(printable version)