If you've read through our Credibility Checklist (and if you haven't, we highly encourage you to do so), you know we've challenged you to consider how legit your business looks. And, one of the first questions on that Checklist is: are you registered with the Secretary of State.
This is another way of asking: have you incorporated your business as an Inc. or LLC? It may seem like a formality to establish a legal entity for your business, but there are countless benefits to doing so. When you do business without a structure, you are, by default, considered a Sole Proprietor. This can be a very costly way to do business, often leaving you with higher or additional (read: Self-Employment Tax) taxes and less deductions. Not to mention the scariest part: you are personally liable for anything that happens to your business from bad employees to law suits.
There is no reason to put yourself - your family, your assets - at risk! Not convinced? Here are our Top 5 Reasons to Incorporate your business...today!
1. Keep what you love safe from your business.
Being an Entrepreneur is not for the faint of heart. One of the main reasons people are afraid of starting a business is risk! Forming a Corporation/LLC as soon as possible in your business is critical because, in most cases, it separates your personal life and assets from the risks of owning your company. Without a formal structure, the liability is yours and yours alone.
2. You will (usually) save money.
Sole Proprietors are often the highest taxed, most audited and hardest to finance companies that exist. The creation of S-Corporations and LLC’s allow businesses to capture business operating expenses in a personal return, even before making a profit. This gives you a world of options when you start to make money.
3. Show the world you mean Business!
When you form a Corporation/LLC you are putting the world on notice that you have arrived and you take your business seriously. Therefore, so should everyone else. When you form your Corporation/LLC, those records are public and are published far and wide by numerous listing sites. Translation: customers have a better chance of finding your business.
4. It will simplify your life.
People often think that forming a Corporation or LLC will complicate things. Often, the reverse is true. By maintaining a separate name, bank account, contracts and taxes, life gets simpler and you can find separation between business and personal.
5. Protect your credit and make funding easier.
While there are no guarantees you will get funded, the sooner your business exists separately from you, the faster it can build its own financial identity. By waiting to form your Corporation/LLC you are delaying the start of your financial history which can make it harder when you do need to borrow money.
In Summary
Sole Proprietorship, which is the default "structure" given to individuals who choose not to form an LLC or Inc, are viewed as an extension of you. You add a level of protection between you and risk by forming a corporation. Registering also creates an indisputable record of when you started your business, handy for legitimacy and possible competitor naming conflicts. By forming your Corporation or LLC now, you also have finality to your name, meaning registrations, business licenses, bank accounts, tax ID numbers, branding and media are established for the long haul. Less change means you get to focus on what your good at: running your business.
Here at EasyBizStart, we have over 20 years' experience in business formations and legal structures. We can get your business registered in any of the 50 states and also talk to you about preferred state incorporation, where tax advantages could exist, if that's an option for your business. We are knowledgeable and our pricing is fair, and you get the benefit of everything else EasyBizStart has to offer - from coaching to phone systems, bookkeeping and more. If you would like more information about incorporating your business, contact us for your FREE - and totally confidential - consultation: startnow@easybizstart.com | 775-800-5501.