Should I choose an LLC Registration or Corporate Registration for my Business?

Should I choose an LLC Registration or Corporate Registration for my Business?

According to the SBA, Office of Advocacy, there were an estimated 27 million businesses in the United States in 2007. Six million companies had workers and 20 million companies did not according to 2005 census data. According to the small business administration there were approximately 17,000 businesses employing more than 500 workers. This represents less than 1% of the calculated 27 million businesses in the US.

Starting out small is the beginning for most companies. In the beginning, data reveals that 82% of the small businesses are financed by individual loans or savings and loans from friends and relatives. Hence, when these businesses begin to grow and thrive, it is imperative that more financing becomes available from banks and public sector institutions. Moreover, the owners’ liabilities have to be reduced to decrease personal and business risk.

Before beginning a business one should consider a checklist that might look something like this: select a tax year (fiscal year), determine on an appropriate business structure and select an accounting method that works for your particular industry. incorporating your business becomes unavoidable if you choose a corporate or LLC Registration. Either of these requires mandatory filing with state agencies. If you select to structure your business as a sole proprietorship or partnership, registration may not be necessary and business activities could commence immediately. The more formal your corporate structure or LLC Registration is the more you must be prepared to invest in legal and accounting advice.

Incorporation is a fairly simple procedure, although each state calls for their own particular paperwork that must be filed with the secretary of state. One of the most frequent ways to start the incorporation process is to contract the services of an incorporating agency. Most of these incorporating agencies will handle the task of preparing and filing the unavoidable paperwork in whichever state you pick out to incorporate your business. Choosing a corporate friendly state, like Nevada or Delaware, may be a route you would choose to take, if your business is open to incorporate in a state in which you do not reside.

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