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 figures. Census data show that there were 6.0 million business firms with workers and 20.4 million without workers in 2005. The small business administration calculates that over 99% of the businesses in existence in the US employ less than 500 workers each.

For many, the journey begins 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 friends and relatives. Hence, when these firms grow large, it is imperative that more financial backing becomes available from banks and public sector insitutions. As these small businesses start out to grow it becomes important and advantageous for the owners to reduce their personal liability and risk.

A checklist for commencing a business runs like this: step one pick out from the available business structures one that meets your needs, choose a fiscal tax year, pick out an appropriate accounting method. If one chooses a “C” or “S” corporate structure or even an LLC structure, there becomes a need for incorporation. Mandatory paperwork filing comes with choosing either of these corporate structures. If it is sole proprietorship and partnership, registration is not required, and business activities may start out immediately. In the cases of LLC and corporation, a lot of legal counsel, understanding the filing procedure, tax compliances, formation of business structure as per the type of corporation and the role of management and members are 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. Most of these incorporating agencies will handle the task of preparing and filing the necessary paperwork in whichever state you select to incorporate your business. Many small business owners select to incorporate their company in Nevada or Delaware, simply because these states are considered by many to be “corporate friendly”.

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