Forming a New Business
Becoming an entrepreneur and creating a business is one of the most rewarding things a person can do, if they’re willing to put in the work. Coming up with a brand and concept is one thing, implementing everything you need to do behind the scenes is another. That’s where we come in.
Having a concrete business plan is part of it, but having a team to help guide you through the process is how you can ensure a successful business. We help new business owners avoid common mistakes and errors that often get overlooked or in the way of getting to your goals.
Here’s how we can help – we’ll start with the preparation of a BUSINESS PLAN to help you get a bigger picture of your potential marketing, management and financial strategies. Then we’ll discuss and determine START-UP CAPITAL needs including assessments of borrowing power (if needed). Once we get the bones of your business together, we’ll then start talking about a BUSINESS STRUCTURE that best suits your needs by evaluating state and federal tax advantages, legalities, ease of operation and portability. Next we’ll review with you the type of ACCOUNTING SOFTWARE you might need and prepare a CASH FLOW BUDGET so you know exactly how much money you need to keep your business afloat for the first few years.
We will accommodate HOME OFFICES, along with the preparation and filing of all required LINCENSES and PERMITS.
We will also help with INSURANCE and PAYROLL needs.
We’ll also help with setting up your business to accommodate a HOME OFFICE so you can
maximize your tax deductions, along with the preparation and filing of all required LICENSES AND PERMITS. Different businesses sometimes require different permits, and we know exactly
which ones you’ll need. Once we get all of this information, we can then prepare and file your application for a FEDERAL EMPLOYER IDENTIFICATION NUMBER. This means you’re well on your way to being a full-fledged business!
We’ll also help with INSURANCE needs, and when the time comes, PAYROLL. Yes, we can handle that, too.
HOW TO DECIDE WHAT TYPE OF BUSINESS ENTITY YOU ARE
This is often one of the most overlooked pieces of the business puzzle, yet one of the most important. You can read a hundred articles online about what type of business you are, you should get it right from the get-go from a professional who seeks to truly help your business
So what type of entity should your business be?
Sole Proprietorship
- The most common type of business, sole proprietorship means that only one person is in charge of the business. Net income is recorded via your personal income. If you generate net income, it is subject to Self-Employment Tax on top of income tax.
Partnership
- Generally made of two or more members or partners. Net income of the partnership flows to its partners. The net income or loss is reported via Schedule K-1. If a partner is an individual taxpayer, their portion of income or loss is reported on their personal return. The partner’s share of income may or may not be subject to Self-Employment Tax.
S-Corporation
- A legal entity that may have as many as 100 shareholders. An S-Corporation is similar to a partnership, but does have its differences. S-Corporations do not pay tax on income but passes income or loss through its shareholders via Schedule K-1. One aspect of S-Corporation taxes involves “reasonable compensation,” meaning that active officers and shareholders are required to have a “reasonable” salary to commensurate the nature of the business and their role.
C-Corporation
- No limit to the number of shareholders. C-Corporations pay tax on their net income rather than flowing it to shareholders. C-Corporations offer many opportunities for tax planning and fringe benefits that other entities do not offer. Profits may be distributed to the active officers and shareholders.
Limited Liability Companies
- Also known as LLCs, there’s some flexibility when it comes to choosing this as your type of business. LLC’s may function as sole proprietorships, partnerships, S-Corporations or C-Corporations.