LLC Registration or Corporate Registration: Which is Best?

of Advocacy forecasts that in 2007 there were over 27 million businesses in operation in the United States. Census data show that there were 6.0 million firms with workers and 20.4 million without workers in 2005. 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.

Nearly every business starts its journey as a small startup. Individual loans or private financing are the backbone of most small business startups. Therefore, as these businesses commence to mature and expand, it is important that easier access to finance from banks and the public is available. The more growth the firm experiences the more the original founders commence to look for prudent ways to decrease their personal liabilities and risk in the business..

One of the first steps in starting a business is to develop a checklist: select a business structure, select a tax year, pick out accounting method and payment of business taxes. The need for incorporation arises if the business structure chosen is either a LLC or corporation. Either of these requires mandatory filing with state 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 begin almost immediately. If you pick out to take a more corporate route in the structure of your business, be prepared for a lot of mandatory legal requirements and compliance issues to be understood and addressed.

The procedure for incorporating your business is simply the act of completing the necessary paperwork and filing it with the appropriate state agencies in the state you choose to incorporate. To help facilitate the process of incorporation many business owners would be wise to employ the counsel of an incorporating agency. Using an incorporating agency can be beneficial in helping you prepare and file the proper paperwork with the Secretary of State in which you select to incorporate your business. This is why many small business owners pick out these types of services. Many small business owners pick out to incorporate their company in Nevada or Delaware, simply because these states are considered by many to be “corporate friendly”.

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LLC Registration