LLC Registration, Corporate Registration, Sole Proprietorship or Partnership?

business were in operation throughout the United States in 2007 according to the Small Business Administration. According to the most recent census data published in 2005, there were 6 million firms with workers on a payroll and over 20 million firms without. The small business administration estimates that over 99% of the businesses in existence in the US employ less than 500 workers each.

Nearly every business starts its journey as a small startup. In the beginning, data exposes that 82% of the small businesses are financed by private loans or savings and loans from acquaintances and relatives. Thus, when these businesses start out to grow and flourish, private and public sector financing must become more available. As these small businesses begin to grow it becomes important and advantageous for the owners to reduce their personal liability and risk.

A checklist for starting out a business runs like this: pick out a business structure, choose a tax year, choose accounting method and payment of business taxes. incorporating your business becomes inevitable if you select a corporate or LLC structure. Choosing any corporate structure requires mandatory fillings with state and federal agencies. Choosing a sole proprietorship or partnership may be an acceptable route for some small businesses as mandatory registration is not immediately required in many cases which means that business activities can start almost immediately. If you determine to pursue the corporate structure for your business, you must also consider the costs of obtaining efficient legal and accounting advice that will ultimately be required.

The actual filing procedure is filling out proper forms and handing them over to state offices where incorporation is done. To help facilitate the process of incorporation many business owners would be wise to employ the counsel of an incorporating agency. These agencies file the papers in all the states required and provide some value added services including information of fees and duration calendars that vary from state to state. Many small business owners choose to incorporate their company in Nevada or Delaware, simply because these states are considered by many to be “corporate friendly”.

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Incorporating a Business
How Do You Incorporate a Business Name