If you're just starting out in business, you may hear the word corporation and think of a huge, multi-department, publicly traded company, but, in fact, even the smallest home businesses can benefit, in many situations, from incorporating. There are several different types of corporations, each with it's own benefits and drawbacks, as well as legal requirements, so it can be a little intimidating to decide how to incorporate your business, particularly if this is your first time starting a company. It's a good idea to consult a lawyer or business mentor before beginning the incorporation process, but here's a quick primer that should give you enough info to get started.
General Corporation
This is typically what people imagine when they think of a corporation, and it's the most common type. General corporations can have an unlimited number of shareholders whose personal assets are protected from the debts and liabilities of the business. Other advantages of a general corporation include various tax deductions for all kinds of business-related expenses, the corporation continues to live on even after the death of the owners, and raising funds is made relatively easy through the sale of stock. The disadvantages include a hefty amount of federal and state regulations and a higher cost associated with incorporating than many of the other options.
Close Corporation
A close corporation (or C-Corp), as the name implies, is much more closed than a general corporation. Most of the rules are the same, however there is generally a maximum number of shareholders in the 30-50 person range and stock must first be offered to existing shareholders before being sold to new ones.
S Corporation
An S-Corp is actually just a different tax strategy for existing corporations to be able to take, and if you are starting a home business, this is one to pay particular attention to. In a traditional corporation, profits would be taxed at the federal level, then dividends would be paid out to the company's shareholders, who would then report their earnings as income and pay taxes on that income. You can see how if you were a sole proprietor, you would be subject to paying tax twice on your profits under the general corporation rules. The S-Corp was created to avoid this double taxation by allowing all gains/losses to be reported once on the personal tax returns of the shareholders. You can see how this would be difficult for a large corporation with many shareholders, but works perfectly for a sole proprietorship, or a very small group of owners/shareholders.
Limited Liability Company
The LLC is perhaps the best choice for a home business, however, because it takes many of the advantages from all of the above. Like an S-Corp, LLC's are authorized for pass-through taxation, however an S-Corp has a long list of IRS restrictions that LLC's do not. LLC's still provide protection of personal assets from business debt and plenty of flexibility at the management level. Some potential disadvantages are LLC's do not have stock, which may make fund raising more difficult, they cannot exceed 30 years and many states require 2 or more members to form the LLC.
Mon, 04/2/2012 - 01:56 AM | viewed 422 times
In February, 2012, Facebook held its 'fMC Conference' which introduced upcoming features and changes to the site, including Timeline for Pages. All of these changes impact the way an entrepreneur or smb can best utilize their Facebook presence to increase traffic, interact with fans, and ultimately, convert these fans into customers. Here we'll take a closer look at the changes to Facebook, how you can use the new features to your advantage as part of your business plan, and some helpful tips on creating a successful Facebook promotion.
Sat, 03/10/2012 - 05:35 PM | viewed 492 times
In the initial stages of a business startup, most entrepreneurs recognize that they'll need the expertise of an accountant at various times, but few realize that they'll no doubt need the help of another professional, an attorney. Their logic would be that they don't plan on breaking the law or getting sued, so legal services aren't necessary. The truth is quite the contrary, however.
Sun, 03/4/2012 - 01:54 PM | viewed 531 times
Now that you've developed a great startup concept, and you're in the business plan development stage, the time has arrived to come up with the right name for your new endeavor. There are a number of differing theories on what makes a great business name, but one thing is certain, choosing the right name can play a big part in how your business is perceived by your customers, and it can make or break your image.
Sat, 03/3/2012 - 12:55 PM | viewed 411 times
On average, roughly 600,000 Americans start new businesses each year. If you're one of the millions more contemplating taking that giant step into business ownership, don't let fear of the unknown stop you. Some of the stumbling blocks for would-be entrepreneurs include indecision about the right kind of business, a fear of putting their money and time into a business that fails, or they may simply have no idea where to start. Generating an idea for a small business isn't always easy, but with some good advice and common sense, you can learn how to choose a viable concept.
Thu, 03/1/2012 - 12:16 PM | viewed 617 times
If you're a small business owner or an entrepreneur involved in your first startup, you're well aware of the impact that successful Facebook marketing can have on your bottom line. Finding your way through the maze of available apps and tools is time-consuming, tedious work. If you're on the hunt for the latest and greatest ways to reach a larger audience and build your business, check out our recommended Facebook tools and apps that are specifically geared toward taking full advantage of your fan page.
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