Shoud I select an LLC Registration or Corporate Registration for my Business?

here were 27.2 million businesses in the United States, according to Office of Advocacy appraisals. According to the most recent census data published in 2005, there were 6 million firms with employees on a payroll and over 20 million firms without. Small firms with fewer than 500 workers represent 99.9 percent of the 27.2 million businesses (including both employers and nonemployers), as the most recent data show there were slightly more than 17,000 large businesses in 2005.

Starting out small is the beginning for most companies. Individual loans or private financial support are the mainstay of most small business startups. So, as these businesses start to maturate and thrive, it becomes increasingly critical that access to financing from banks and public sources becomes available. Because of this proposed business growth business owners begin to look for ways to decrease their personal financial risk.

One of the first measures in starting a business is to develop a checklist: pick out a tax year (fiscal year), determine on an appropriate business structure and pick out an accounting method that works for your particular industry. If one chooses a “C” or “S” corporate structure or even an LLC structure, there becomes a need for incorporation. Choosing any corporate structure requires mandatory fillings with state and federal agencies. If it is sole proprietorship and partnership, registration is not required, and business activities may start immediately. If you choose 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 actual filing procedure is filling out proper forms and handing them over to state offices where incorporation is done. Filing the papers can be done by hiring the services 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. Most small business owners select to incorporate in states that are corporate friendly, this is why many firms pick out to incorporate in states like Nevada or Delaware.

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