When beginning a business, you must decide what form of business
entity to establish. Your form of business determines which income
tax return form you have to file. The most common forms of business
are the sole proprietorship, partnership, corporation, and S
corporation. A Limited Liability Company (LLC) is a relatively new
business structure allowed by state statute. Legal and tax
considerations enter into selecting a business structure.
Please follow each of the links below to review each of the
different business types as defined by the IRS. You will also
want to bookmark this page as it also has import tax information
specific to the business type you chose.
Your situation may differ, however when forming a business please
consider the following. For a simple, in-home business with
limit liability risks you may wish to form a
Sole Proprietorship. Filing taxes is easy and you do
not have the tax penalties of that of a
corporation.
Partnerships, need to be considered carefully. You may
want to go in business with your best friend, however, and listen
carefully: BUSINESS CHANGES PEOPLE.
Things may be beautiful in the beginning...you work together
perfectly. Then one day either things are going extremely well
or extremely bad. You will turn on each other. STOP!
You are not the exception, it WILL happen. If you choose to
enter into this type of business, hire a
lawyer
to draw up a Partnership Agreement. Be sure and spell out
EVERYTHING, especially what to do if things go wrong.
Corporations,
S-Corporations and
LLC's. The most obvious benefit that these business types
have is they limit liability to the business entity. In most
cases the directors, owners or shareholders cannot be sued.
The negative side is the taxes are complicated and in the case of a
C-Corporation there is the issue of double taxation.
S-Corporations make it easier and less expensive to file taxes.
If you are a small business and want to limit your personal
liability, you might consider a
Limited Liability Company. It works allot the same as a
Corporation, however, taxes are similar to that of a
Partnership.
Dealing with the IRS does not have to be scary. You do not
have to be a tax expert, however even if you plan to hire a tax
consultant or an accountant you, as the business owner should be
aware of the forms needed to file each quarter or annually and some
of the tax laws that concern you. The IRS, believe it or not
has made it a little easier than most of us think. Here is a
link, that few people will find, but if you follow it and read the
material you will make things go allot smoother for you when it
comes to the IRS.
Click here to head to the online classroom.
Click here for a supplement to Lesson 10. The Lessons can
be viewed on your computer using
Windows Media Player and each lesson comes with a transcript.
Now that you have decided which type of business best suites your
needs, now it's time to file the paperwork. PLEASE follow the
steps below in the EXACT ORDER. You will same allot of time
and headaches.
- File with your
Secretary of State. You can either do a
Google Search
(Type your State and SOS) or click the link above
for a list...find your state then navigate to the Business form
section. If you are having trouble
email us and we will help you find the correct form for your
state.
- If you intend to have employees you will need to file an
SS-4 form with the IRS. Even if you don't plan to have
employees now, we recommend you file an
SS-4 and get your EIN (Employer Identification Number).
Some of your suppliers and other organizations, like your bank
will ask for this number. If you don't have EIN you will
have to use your social security number. If you do
not feel comfortable filing online you can
print the form and
mail it in or
call the IRS and they will issue you an EIN over the phone.
If you need instructions
click here. On Line 8a, the IRS wants you to list the
form you will file for your taxes if you are a Corporation.
Click on the type of Corporation above to get the form you will
file.
- Next, you may be interested in operating a DBA (Doing
Business As) or ABN (Assume Business Name)...either term is
interchangeable. For example. The parent Company of
Overnight Marketing is
Seek
Technologies, Inc. We filed a form with our state
letting them know that
Seek
Technologies, Inc. would be doing business as
Overnight Marketing. You will find this form on your
Secretary of State's
Business Form Page.
- Unless you are forming your business in; Alaska, Delaware,
Montana, New Hampshire, or Oregon you will have to apply for a
license or permit to collect sales tax. However,
numerous boroughs and cities in Alaska have their own local
sales taxes. Furthermore, the other four states impose
sales-type taxes on specific transactions, such as lodging
accommodations.
Click here for the link to your states tax revenue website.
Navigate to their forms page and look for your type of business
as some business have specific tax forms that you will need to
file. Most state websites will have a wizard to help you
choose the correct form(s). Some forms have filing fees
associated with them, make sure you don't forget your fee or
they will reject your application and you will have to start
over. If you are having trouble
email us and we will help you find the correct form for your
state.
- Your state may require city and county licenses where you
conduct business. Contact your
Secretary of States
office for assistance in determining if you need to apply for
these as well. Again, most state websites have a wizard to
help you determine the forms you will need.
Need help forming a business? Let the folks at
The
Company Corporation give you a hand. They will help you
fill out all the paperwork, file it in your state and act as your
Registered
Agent.
The
BEST form of marketing is Word of Mouth Marketing. What is Word of Mouth
Marketing? 
