Choosing your business formation can be a daunting task. Should you choose sole proprietorship, S-Corp, LLC or something else? It’s a decision that will give you a headache in a heartbeat. If you’re not familiar with each of these business formations, here’s a brief rundown.
Sole Proprietorship: This is the easiest type of business formation. You hang out your shingle and start doing business (there may be local licensing requirements). The drawbacks of this type of business form is that the business is not separate from you, the owner. That means you could be personally affected if someone becomes unhappy with your business.
S-Corporation: This is named after the Subchapter S of the Internal Revenue code. An S-Corp is a simple type of corporation that protects its principals from personal liability. The corporation is not taxed, all profits (or losses) from the business pass through to the shareholders tax returns. S-Corps require some formal filings to remain valid.
Limited Liability Company: An LLC is a company form that also allows limited liability to its owners but has the option of being taxed as another business form. It typically requires less formal paperwork to maintain its status as an LLC.
Given the variety of possibilities for business formation, what do you do? First you’ll want to do your homework and decide which type will work best for you. Then you need to contact a company that can get you set up properly. In the past, it was necessary to contact an attorney who could get all of this set up for you. In 1996, when my company was formed as an S-Corp that’s what I had to do. costs ran just under $1000 to get everything completed.
But today, there’s another option. One online provider for forming your corporation or LLC is MyCorporation.com. Created by a Intuit, a trustworthy company that also makes QuickBooks, MyCorporation.com can help you quickly determine your business type and get you set up for much less than I paid several years ago. They offer lots of helpful information on their website to help you determine what structure will be best for your business.
Although I haven’t personally used this service, I’ve been hearing rave reviews. And that doesn’t surprise me coming from an Intuit company. I’ve placed my trust in their QuickBooks product since I began my business and they haven’t disappointed. I have the same high level of expectations for MyCorporation. Check them out and see if they can solve your business formation problems for you.
Get the FREE FOR A DAY deal from MyCorporation.com on 11/11/08 – one day only
If you know what type of business formation you want to set up, here’s a great one day deal for you. On Tuesday, November 11 only from 6am to 6pm PST (So you’ll want to wait until at least 9am Eastern time if you decide to take advantage of this offer), MyCorporation is offering a special FREE FOR A DAY promotion. For one day only, MyCorporation will process a new Corporation or Limited Liability Company for free. That’s a savings of $149 off regular service fees (note: document shipping, state fees, publication fees, and additional product fees are additional). To get your discount on 11/11/08, just enter offer code FREE149.