Loading...

Legal Steps to Start a Business & Special Offer

image002So you have an idea and want to get that business off the ground – congratulations!!

When planning the steps to start your business, there are some legal aspects you don’t want to overlook. These steps may not be the most glamorous parts of starting a business, but you want to make sure the business is set up properly from the start to avoid issues down the road.

Here are my must-do steps to legally start a business followed by a special offer on CorpNet.com services:

1 – Choose a business name

Have an ideal name in mind for your business? That’s a great start, but before you get too attached and order those business cards you’ll want to make sure it’s legally available for use. You can do a corporate name search and/or check with your state’s Secretary of State database to see if the name is registered by someone else. I also recommend running a trademark search to see if someone has already filed for a trademark. If you search both places and the result is clear – great job! You should move forward with that name. If you find that the name is already in use – you may want to go back to the drawing board and brainstorm some other options.

2 – Choose a business structure

If you don’t officially form a business structure your default is to operate as a sole proprietor. A sole proprietorship does not separate your personal and business finances so if down the line your business is sued, your personal assets can be threatened.

Forming an LLC or Corporation will protect your personal assets from any liabilities of the company.

Forming an LLC, otherwise known as the Limited Liability Company, is a great option for businesses that want legal protection without a lot of paperwork.

The C Corporation requires more paperwork and formalities, which can be a headache for small business owners. However, this structure is ideal for businesses that plan to reinvest their profits back into the company, seek venture capital funding or plan to go public.

Another popular structure is the S Corporation. The S Corp does not file its own taxes but is treated as a pass-through entity. It is a great structure for a small business owner who can qualify as the IRS places limited both on the number of owners and who can be an owner.

Not sure what structure is best for you? Try the CorpNet Business Structure Wizard that can help you decide!

3 – Register your business name

If you are forming an LLC or corporation, this step automatically registers your name with the state. However, if you choose to operate as a sole proprietorship or general partnership, then you will need to register your business name by filing a Doing Business As (DBA).

Registering your business name ensures that you are legally able to operate your business under that name in the state and also ensures hat no one else can use the name in your state.

Ready to take these legal steps to start your business? Use CorpNet.com and for a limited time get 10% off any Deluxe or Complete order! Call us at 888.449.2638 for a free business consultation and mention SOCIAL10 for your discount!

5 Ways to Simplify the Payroll Process

Man writing a payment cheque at the table with calculator and glasses

Paying your employees on time can be a headache for small business owners looking to do the task themselves. It sounds simple, but when you factor in taxes, fees, and other regulations, it quickly becomes one of the biggest minefields associated with running a business. Fortunately, by following the tips below, you should be able to streamline your payroll processes with minimal effort on your end.

Direct Deposit

As the name implies, direct deposit is a system which enables you to send employee payments directly to their bank accounts without having to worry about costly paper checks or errors in your books. Most banks and online accounting programs support direct deposit out of the box. In many cases it’s included as part of the service packages or it’s offered for a nominal fee.

Easy to Use Payroll Software

Many business owners make the mistake of assuming payroll software is costly and difficult to use. While many tools have a subscription fee, many payroll software options pay for themselves by enabling professionals like yourself to focus on running your company. Additionally, when you have hourly workers or need to track paid-time off, payroll software enables you to automate scheduling, accurately check employee time, and have all essential information viewable within a central dashboard.

Outsource Your Payroll

Payroll is a fairly complex topic which is constantly evolving and difficult for many to understand.  Some of the reasons employers choose to process payroll themselves is because they feel it’s more cost effective, a way to protect against wage theft, or they want to maintain complete control to handle last minute changes. Although these are all valid concerns, when you consider the lost time and potential penalties for errors, outsourcing payroll becomes a much more attractive option.

When you’re looking for payroll processing companies, remember that you’ll routinely be communicating with their representatives. When you’re looking for a payroll service provider you’ll want to choose a company which is known for providing exceptional customer service. You should request references from current clients and also ensure the customer service teams can answer questions to your satisfaction.

File Taxes Electronically

With payroll and other taxes, you’re obligated to meet deadlines and ensure you’re in compliance with laws on the books. By filing your taxes online, you won’t have to worry about postage costs, lost mail, or long lines at the post office. Most online filing services provide users with near-instant confirmation of your information being received. Some states even require businesses to file their taxes online, another reason your business should switch to paperless payroll workflows.

Consolidate Pay Schedules

When companies have hourly and salaried employees, they often maintain different pay schedules. For example, salaried employees might be paid monthly while hourly employees are paid weekly or bi-weekly. While it sounds fine in practice, juggling different schedules leaves plenty of room for error. If you’re not using a software, you can at least use an employee schedule template to help maintain your employees schedule as efficiently as possible. By paying all your employees on a set schedule, you’ll cut payroll costs, improve employee satisfaction, and have the peace of mind that you’re compliant with all relevant regulations.

Conclusion: A Dynamic Process

As a small business owner, you need to ensure you’re always able to keep pace with change. Even if you have a bookkeeper, payroll company, or accountant, it’s essential to at least have a basic handle on what’s going on. The best way to stay on top of these trends is to develop a trusted team of advisors and perform routine checks to ensure you have the right systems in place. While it might seem daunting at first, it gets easier once you’ve streamlined your payroll workflow.

Charles Costa is a writer and marketing analyst for Fit Small Business and other publications. He focuses on helping companies grow, one word at a time. His areas of expertise include software, hardware, biotech, finance and general technology. You can learn more about him at CharlesCosta.net.

Image: Adobe Stock

Selling Yourself: 5 Ways To Boost Your Business Confidence

Businessman removing a wooden card reading Confident from the poIn business, you can set yourself on the path to success by always striving to put your best foot forward. Unfortunately, that’s not always quite so easy to do—especially when you feel nervous or insecure. When we’re less than confident in our own selves, we tend to hold back, sometimes leaving the impression that we’re standoffish or uninterested in the people around us.

That doesn’t exactly endear us in the minds of others and it can cause us to seem less credible to potential clients.

As I’ve started and run businesses, selling my myself has always been an important ingredient to my success. And demonstrating confidence has played a key role in enabling me to do that and to earn the trust—and business—of prospects.

How To Rise Above Lack of Self-Confidence So You Can Sell Yourself

Even though you may not feel confident, there are a few things you can do to help you project a more confident, self-assured professional self.

When meeting with clients or mingling with others in the business community…

  • Prepare for the occasion. In advance of an event or meeting, make a checklist of everything you’ll need to take with you. Also, think about what you’ll discuss and anticipate questions others might have. Simply knowing that you know your stuff will help you stay calm and exude confidence.
  • Practice your elevator pitch. Over and over and over again—so you’ll be able to do it flawlessly without stumbling over words or forgetting key points. With enough practice, you can get to the point where your elevator speech will be on “auto-pilot,” and you won’t have to think twice about what you want to say when you’re in the moment.
  • Dress like you mean business. Even though many business events are far more casual than they used to be several years ago, always err on the side of professionalism. And of course, exercise good grooming and hygiene habits under all circumstances. Being put together and looking your best boosts confidence inside and out.
  • Act the part. Even if your self-assuredness is shaky, that doesn’t mean you have to be. Concentrate on presenting a poised presence despite your jitters. Chances are your outward demonstration of confidence will make you genuinely feel more cool and collected, too.
  • Let your authentic and genuine self shine through. Above all, this is the key to selling yourself with conviction no matter where you are and whom you’re meeting with. It’s what will set you apart and help you rise to any occasion.

So, the next time you’re feeling apprehensive about going out there and selling yourself, put your fears and insecurities to rest. With a little planning and attention to professionally presenting yourself, you can display self-confidence even when you may not have it in you just yet.

With a boosted business confidence, it may be time to make that venture legal by calling CorpNet anytime for a free business consultation at 888.449.2638. We would love to help you incorporate a businessform an LLCfile a DBA and more across all 50 United States!

Image: Adobe Stock

Why Customers Love Us – CorpNet Reviews

Screen Shot 2016-05-12 at 2.43.23 PMWe’re back with another month of fantastic 5-star reviews of CorpNet.com services! The summer days are getting hotter, but we have the AC cranked up and we’re working hard ensuring happy customers across the board.

Here’s a look back at some fantastic 5-star reviews of our services these past few weeks. Do you need to incorporateform an LLC or file a DBA? Check out all of our reviews on TrustPilot and reach out anytime for a free business consultation at 888.449.2638.

Screen Shot 2016-07-13 at 3.41.52 PM

Screen Shot 2016-07-13 at 3.41.43 PM

Screen Shot 2016-07-13 at 3.42.06 PM

Screen Shot 2016-07-13 at 3.42.19 PM

Screen Shot 2016-07-13 at 3.41.28 PM

By | July 14th, 2016|CorpNet Reviews|0 Comments

5 Avoidable Mistakes Real Estate Investors Make With Their LLCs

Silver house key lying on a contract for house sale, lease, insurance or mortgage in a real estate concept, viewed low angle with focus to the tip.

With any investment property, liabilities come with the territory—faulty electrical wiring, broken stairway railings, black mold, and other possible flaws are all inherent threats. It’s no wonder savvy real estate investors decide to form LLCs (Limited Liability Companies) to protect themselves. The LLC legal business structure shields investors’ personal assets from liability associated with their investment properties. So with an LLC, your personal assets won’t be vulnerable if a tenant or visitor to your property sues you.

While forming an LLC can be done rather quickly and without any great degree of complexity, I’ve seen otherwise smart real estate investors make some serious mistakes that could put their benefits of being an LLC at risk. Here are some of the common errors you should avoid:

1. Not transferring the property deed to your LLC: Although this may seem like I’m stating the obvious, some real estate investors have forgotten this step! After you’ve formed an LLC, you need to sign a deed transferring the property to your LLC. You also need to record the deed with the county where your property is located. If you don’t take care of this, you personally will still be considered the owner of the property—and would therefore be the defendant in any lawsuit associated with it. Note that if your LLC purchases the property directly, you won’t have to worry about transferring the property deed.

2. Not creating a separate LLC for each of your properties: Do you have multiple investment properties? If yes, then you should establish an individual LLC for each property. That’s the way to get the optimal liability protection for each investment. For example, if someone sues Property 1, the only assets at risk are those belonging to LLC 1. Along with your personal assets being protected, so will be the assets from Property 2 (which is set up under LLC 2), and Property 3 (which is set up under LLC 3).

3. Not insuring the property under your LLC: To protect your property from liability and damage, you should buy a comprehensive landlord’s property insurance policy. Be sure to maintain written proof showing your LLC’s name is the one insured, so your insurance company won’t have a reason to deny coverage if you make a claim. If you have multiple properties/LLCs, obtain separate coverage for each one.

4. Not keeping your LLC in compliance: If you don’t maintain your LLC as legally required and a plaintiff proves that, your personal assets will be at risk in a lawsuit. Noncompliance pokes a hole through your LLC’s protective shield and makes your personal assets vulnerable. Different states have different requirements, so make sure you’re aware of them. Regardless of where your LLC is located, keep your personal funds separate from those of your LLC. Never commingle finances (i.e. keep separate bank accounts and credit cards for your personal self and your LLC).

5. Squandering money on an expensive lawyer to form your LLC: If you have a straightforward investment situation, you may not need a lawyer at all to form your LLC. A reputable legal document filing service can represent you and take care of all the paperwork and filings. That will save you money—money you can use toward your next real estate investment!

Forming an LLC is a powerful way to protect your assets and minimize your liability when purchasing investment properties. By avoiding the five mistakes I mentioned, you’ll have a much better chance of getting full benefit from the protection the LLC structure offers small business owners.

Do you need to form an LLC for your real estate investment properties?  Call CorpNet anytime for a free business consultation at 888.449.2638. We would love to help you incorporate a businessform an LLCfile a DBA and more across all 50 United States!

Image: Adobe Stock

Should You Hire Temporary Employees for Your Business?

30s young hipster man style working at office with ambient lightDoes this sound like you? You need help handling all the duties of your business, but you don’t want to hire additional permanent employees. Whether you’re looking ahead to holiday shopping season or suddenly need summer staff, temporary workers might be able to fill the bill.

Temporary workers can help a small business in many situations:

  • You are faced with sudden, unexpected demand for your product or service, but aren’t sure how long it will last.
  • You need workers to help with seasonal tasks, such as employees to help your accounting firm get through tax season or retail employees to handle the holiday shopping rush.
  • One of your permanent employees is on an extended leave, such as maternity or medical leave, and you need someone to handle their position.

The rise of the “freelance economy” has made temporary work more appealing for many people. Last year, the number of temporary workers in the U.S. hit an all-time high of 2.9 million, according to the Commerce Department. But temporary workers are also appealing to small business owners for several reasons:

  • Hourly temporary workers typically are paid less than hourly permanent workers in the same roles, the Commerce Department reports.
  • You don’t pay the workers directly, which saves you time and headaches dealing with payroll, withholding, insurance and benefits. Instead, the temporary agency handles payments to the workers. (However, keep in mind that the total, or “bill rate,” you’ll pay to the agency includes a fee for this service and any benefits the workers receive.)
  • If business slows down, you can let temporary workers go immediately, without having to provide any type of severance and without the emotional strain of laying off a permanent employee.
  • If a temporary employee doesn’t work out as expected, you can generally just request a replacement. No need for the time-consuming and costly process of advertising a job, conducting interviews and hiring a new employee.
  • If the temp does work out spectacularly, and your short-term need becomes ongoing, you can offer the temp a permanent job.

Most temporary workers are in industrial (37 percent) or office/administrative/clerical roles (28 percent), according to the American Staffing Association. But 13 percent work in professional/managerial roles; 13 percent work in engineering, IT or science fields; and 9 percent work in healthcare jobs. This growing specialization in the temp industry means it’s easier to find the exact type of temp you need.

Nor are temps just entry-level workers, the Wall Street Journal reports. Many skilled employees prefer temporary work for its flexibility and as a way to try out potential employers in hopes of getting a permanent job offer. (More than one-third of temps have received a permanent job offer from an employer according to the American Staffing Association.)

If you think temporary employees might be right for you, here are some steps to ensure a successful temporary hire:

  • Be clear with the temporary agency about your needs and expectations. The more specific you can be, the better fit they will be able to find for you.
  • Be sure you understand all the terms of the temporary agreement, including the fees the agency receives, whether you can make a job offer to a temporary employee and whether there are additional fees for doing so.
  • If you know going in that you want to hire temporaries with the potential to become permanent employees, ask about “temp-to-perm” arrangements. Not all temporary workers want permanent jobs, and you don’t want to find the perfect worker only to discover that he or she prefers being a temp.
  • Once temps come on board, treat them as you would any new employee — provide a work space, training and appropriate tools to do the job, and make sure they’re made to feel at home.

Is your business growing and you still need to Incorporate or form an LLC?  Call CorpNet anytime for a free business consultation at 888.449.2638. We would love to help you incorporate a businessform an LLCfile a DBA and more across all 50 United States!

Rieva Lesonsky is CEO of GrowBiz Media, a media and custom content company focusing on small business and entrepreneurship. Email Rieva at rieva@smallbizdaily.com, follow her on Google+  and Twitter.com/Rieva, and visit her website, SmallBizDaily.com, to get the scoop on business trends and sign up for Rieva’s free TrendCast reports.

Image: Adobe Stock

Four Small Business Freedoms That Make Every Day Like Independence Day

United States of America flag on a wooden background

Picnics, fireworks, sparklers, and red, white, and blue-themed decorations…every Fourth of July, many of us pull out all the stops to celebrate the freedoms we enjoy here in the U.S.A—and rightly so! We have a lot to be thankful for.

As my family celebrated this weekend, I also thought about how fortunate we are to be small business owners. In a way, every day is Independence Day for entrepreneurs who have taken charge of their own destinies. So what better time than this week to take pause to reflect on your freedom as a small business owner?

Small Business Freedoms Worth Celebrating

  • Autonomy to make your own decisions about the direction of your company – YOU steer the ship! As a small business owner, you decide which products and services you’ll provide. You also determine how small or large you want to grow your company and what type of business structure you want it to have. You might start out as a sole proprietor, or form an LLC, or register as an S-Corporation, or establish a C-Corporation. You have the freedom to pursue what makes the most sense for you.
  • Flexibility with your schedule – For me, this is among the biggest advantages of being a business owner. With our four children, having the ability to adjust my work schedule when needed—especially during the summer months when school is out—is invaluable.
  • Free will to create your own path to professional development – As a small business owner, you get to decide which skills and knowledge you want hone and perfect. Whether you opt to register for webinars, travel to attend conferences, or pursue an industry certification, you don’t have to ask permission to up your game.
  • Choice of whom you work with – Ah, this is a BEAUTIFUL thing. When you own your own business, you get to choose who will be on your team. That’s powerful, because you can work with people who have the right skills, work ethic, and attitude to propel your business forward and make work seem, well, less like work.

Starting and running a business may not be easy most of the time, but it gives you a lot to celebrate! As entrepreneurs, we have a lot of freedom to navigate where our companies will go and what our futures will hold. And that’s something to embrace and appreciate all year round.

Image: Adobe Stock

Nellie in the News: June 2016

nellie in the newsWhat an exciting month June was for the CorpNet team! We’ve been hard at work helping entrepreneurs incorporate a business, form an LLC, file a DBA and more across all 50 states.

Our CEO Nellie Akalp has been keeping just as busy sharing expert tips and advice across many podcasts and blogs. She is a fantastic resource for anyone starting a business so we definitely recommend you follow her on Twitter for the latest tips!

Here are some highlights from June and an upcoming speaking appearance where you can see Nellie in person.

Want Nellie to speak at your next event or share her tips on your podcast? Contact her today

Upcoming Speaking Appearances

Ellevate Network, Los Angeles

#GirlBoss: Stories from Female Founders

Nellie will join other female entrepreneurs in an enlightening panel discussion sure to inspire others!

July 26, 2016 at 7:00pm in Santa Monica, CA

More info and to register: http://bit.ly/292gDXh

 

Interviews & press Mentions

Small Business Advocate Radio – Tips on How to Name Your Company with Nellie Akalp http://bit.ly/1sNhEtn

Business Building Rockstars Podcast – Interview with Nellie Akalp http://bit.ly/1UlJeUL

Dave Bullis Podcast – Nellie Akalp discusses forming LLCs for film makers http://bit.ly/1sv9Ooe

HostGator – 30 Entrepreneurs Share the Best Advice Their Dad Ever Gave Them http://bit.ly/1OeDVdr

Digital 90210 – Interview with Business Expert Nellie Akalp http://bit.ly/1XVpezN

Business Leaders Radio – Interview with Nellie Akalp http://bit.ly/1rqR7kl

Fit Small Business – How to Create an LLC Operating Agreement http://bit.ly/1UQyWyY

Showcasing Women – The Legal Side of Naming Your Business: Webinar with Nellie Akalp http://bit.ly/1UXt6sN

Tenfold Blog – 32 Time-Saving Tips from Extremely Busy Business Pros http://bit.ly/295RrxN

 

Expert Contributed Posts

Accounting Today – How to Keep Your Accounting Business Compliant http://bit.ly/1RTgbGp

Forbes – Foreign Qualification: What It Takes to Do Business In Another State http://onforb.es/1OeDFev

Huffington Post – Choosing Your Business Name is a Big Deal: How to Do it Right http://huff.to/1UDNm2x

Entrepreneur – 6 Ways to Help Your Kids Start a Business This Summer and Learn About Life http://entm.ag/1ZBVFjE

Secret Entourage – 5 Myths About Registering Your Business http://bit.ly/1UvhRul

Small Business Trends – What is a Trademark? Is Your Business Ready For One? http://bit.ly/1tt9WF3

AllBusiness – 7 Face-to-Face Networking Mistakes That Could Kill Your Professional Image http://bit.ly/2982Krf

By | June 30th, 2016|Nellie in the News, Uncategorized|0 Comments

How Outsourcing Can Help Grow Your Business

hiring or outsourcing concept handwritten on whiteboard

Small business owners and entrepreneurs wear many hats when building a successful venture. Something our owners know a lot about!

Sometimes all of the hats get too heavy and you need to outsource assistance to free up time to focus on your business services or product instead of tedious other tasks. Outsourcing help is beneficial to those starting a business who can’t afford to hire new employees. It’s so helpful that the outsourcing industry has flourished in the last 15 years from earning $45.6 Billion in 2000 to US$104.6 Billion in 2014, according to global outsourcing. The consistently strong growth of outsourcing means one thing: it works!

Outsourcing help comes in all shapes and forms. Many top entrepreneurs are relying on virtual assistants to help them manage tasks. Virtual assistants work online from a remote location and are contracted to perform non-essential and highly-specialized work. Here are a few successful outsourcing examples that may motivate you to hire someone for your small business:

  1. Tim Ferris

Tim Ferris used to own a supplement company called BrainQUICKEN. According to Tim, he had a brutal 14-hour daily work schedule when he managed the day-to-day operations of his business He could not find time for himself just to relax and unwind.

When the demands of work became overwhelming versus the returns, Tim decided to take a two- week vacation in Europe. He decided to delegate non- essential tasks to virtual assistants. Tim made a strict commitment to only check with his virtual assistants a few days during the week.

The experience was a revelation for Tim. He came back to work relaxed and rejuvenated. He sold BrainQUICKEN and wrote of his experience managing business with virtual assistants and outsourced work in the bestselling book “The Four- Hour Work Week: Escape 9-5, Live Anywhere and Join the New Rich” in 2007.

  1. Pat Flynn

Before he became one of the most popular bloggers, Pat did the 9- to- 5 grind in the concrete jungle. After he got laid off from his regular office job, Pat decided to become an online entrepreneur and started the widely successful blog, “Smart Passive Income”.

When he was a regular 9- to- 5 employee, Pat was earning a five figure salary per year. Four years into his blog, Pat started earning five figures per month!

For Pat, outsourcing services paid dividends in that he was able to allocate his time more productively. By delegating non- essential tasks to virtual assistants, Pat was able to focus more on the core functions of his blogging business.

  1. Michael Hyatt

Bestselling author, publishing company consultant, resource speaker, entrepreneur and blogger Michael Hyatt is a man who wears many hats.

Entrepreneurs are people who love challenges and they never say “no” to a great opportunity. But work eventually became overwhelming that Michael had a difficult time managing his choice of hats.

Michael’s decision of hiring a full- time employee versus hiring a virtual assistant hinged on its costs and benefits. It did not take long for Michael to opt for hiring a virtual assistant.

It cost him much less to maintain virtual assistant services and he was able to increase his productivity.

  1. Cody McKibben

Cody is a typical entrepreneur. He takes calculated risks, has a creative mind and thinks outside the box. He lives and breathes the entrepreneurial lifestyle and has made it his advocacy to help other entrepreneurs by sharing his experiences.

Cody is co- founder of The Digital Normal Academy, a company that guides entrepreneurs how to succeed at their chosen ventures by embracing the virtual lifestyle.

Cody has used virtual assistants in every facet of his business. Outsourcing services such as non- essential tasks and specialized work which did not fall under his core competencies helped Coby become more productive and save up on valuable costs.

  1. James Schramko

This highly successful Sydney- based entrepreneur left his regular job to become one of the best Internet marketers in the world. His blog can be found on page one on the number two spot for the highly- coveted keyword “Internet Marketer”.

For James, the value of hiring virtual assistants commiserates with the number of virtual assistants you hire. James did not hire just one Virtual Assistant, he hired an entire team!

By outsourcing that work, James was able to focus on his duties and responsibilities as an in- demand internet marketer.

  1. Brendon Burchard

Brendon went from being bankrupt to becoming an entrepreneur earning a seven figure income. He owns and operates The Experts Academy which hires business experts and consultants to teach you how to manage your business and career as an entrepreneur.

When he was bankrupt, Brendon hardly had enough money left to get help onboard his new venture. Hiring a virtual assistant was his only option and it proved to be a highly productive one.

According to Brendon, he started out with one assistant and delegated only the non- productive tasks so he could focus on growing the business. His virtual assistant rode the turbulent waters with Brendon in all of the ups and the downs. Today, The Experts Academy is one of the most successful business consultancy companies.

Outsourcing services is a proven effective strategy for growing your business. But make sure to qualify your virtual assistant to be sure you have found the perfect fit for your needs.

 

Felix Tarcomnicu is a virtual assistant with a passion for writing articles about entrepreneurship and businesses. He enjoys helping small businesses find the right outsourcing solution.

Image: Adobe Stock

By | June 28th, 2016|Business Operations, Business Tools|0 Comments

Can A Corporation Be A Member Of An LLC?

Concept Member message on wood boards. Macaroons and glass Tea on table. Vintage tone.Starting and running a business as an LLC (Limited Liability Company) offers some advantages to business owners who want liability protection, taxation flexibility, and credibility without complexity. Next to a sole proprietorship, it’s the business legal structure that’s least complicated and void of cumbersome formality. But if you’ve already incorporated a business, can that entity be a member of your LLC? And what could that accomplish for you?

Yes! Your Corporation Can Be A Member of Your LLC.

All states allow for other types of business entities (not only individuals) to serve as members of LLCs. Generally, there are very few restrictions limiting a corporation from being an LLC member. A corporation doesn’t even have to be incorporated in the same state as the one in which the LLC is organized.

In What Situations Does It Make Sense?

By having your corporation as a member of your LLC, you create an additional level of ownership, which may enable you to offer traditional perks such as retirement plans and give you added protection from liability. Like individuals who are members/owners of LLCs, corporate LLC owners can also take advantage of pass-through federal tax treatment.

Probably the most common situation in which a corporation will serve as the member of an LLC is in the scenario of a business owner creating a holding company and an operating company. The holding company owns all of the business assets and then leases them to the operating company, which uses them to run the business. In such a situation, a corporation could be the holding company and be a member of the LLC, which would be the operating company.

What Restrictions And Requirements Apply?

Although most states don’t place many requirements on members of an LLC, some do more closely regulate membership in a professional limited liability company (PLLC). Members of PLLCs (LLCs formed to offer professional services) often must be licensed professionals in their fields, therefore preventing corporations from serving as members of PLLCs.

Depending on which state you operate in, you may or may not need to disclose who your LLC’s members are. While some states don’t mandate an LLC to disclose its members, others demand that the LLC disclose its managers—so if an LLC is member-managed, it needs to disclose its members. Where required to disclose its membership, an LLC with a corporation that is a member will need to provide the corporation’s name, physical address and percentage of ownership in the LLC.

Don’t Go It Alone.

As you’re starting a business or considering changes to your existing company’s legal structure, make sure you get guidance from professionals who have your best interests at heart. And if you want to make sure all your business registration and other compliance tasks are take care of correctly, remember CorpNet.com is here to help make the process as simple and cost-effective as possible. Call for a free business consultation at 888.449.2638

Image: Adobe Stock