/Nellie Akalp
Nellie Akalp

About Nellie Akalp

Nellie Akalp is an entrepreneur, small business expert, speaker, and mother of four amazing kids. As CEO of CorpNet.com, she has helped more than half a million entrepreneurs launch their businesses. Akalp is nationally recognized as one of the most prominent experts on small business legal matters, contributing frequently to outlets like Entrepreneur, Forbes, Huffington Post, Mashable, and Fox Small Business. A passionate entrepreneur herself, Akalp is committed to helping others take the reigns and dive into small business ownership. Through her public speaking, media appearances, and frequent blogging, she has developed a strong following within the small business community and has been honored as a Small Business Influencer Champion three years in a row.

Should I Incorporate Now or At The Beginning Of The Year?

So you want to change your business structure from a sole proprietorship to an LLC or a corporation? Great! But you might be wondering if you should make it effective now, or wait to file your paperwork until the New Year.

If you’re one of those hyper-organized people, like me, you probably love the idea of having a neat and tidy January 1 effective date. After all, who wants to deal with filing two sets of tax forms—one for the period of time in this year when you operated as a sole proprietor and another for the part of the year the new structure was in place? But at the same time, I’ll bet you want to have all your ducks in a row right now, so you don’t risk filing too late and facing the same situation next year.

Sigh. What’s an entrepreneur to do?

Delayed Filing To The Rescue
Guess what? Most states offer a Delayed Filing option. It provides you a way to perfectly time the effective date of when your business officially changes to your new structure of choice.

Delayed Filing enables you to submit your application for whichever business structure you’ve chosen, but delay the actual incorporation date until a specific date in the future. In short, it lets you control your effective date of incorporation or LLC formation.

Whether you want to make a clean break with a January 1 start date or you have reason to schedule your new structure to take effect on some other date next year, you can get the paperwork out of the way now. That leaves you with one less task to take care when you need to be focused on marketing strategy, customer service, and all else.

Nice, right?

When To Submit Your Delayed Filing
You can use the Delayed Filing option at any time of the year. Check with your state to find out how far in advance you need to file. The requirements vary from state to state. Typically, you would need to file between 30 to 90 days before your requested effective date.
What To Do
When filling out the online forms to form an LLC or incorporate, indicate the number of days after filing that you want your business structure to be effective. When registering your business structure for a delayed start date, your Articles of Incorporation (or Articles of Organization) will need to reflect that effective date, as well.

Final Words of Insight
Even though the end of the year is near, you still have time to submit a delayed filing for January 1, 2017. You will, however, need to use the fast track service to expedite review and approval by your Secretary of State department in time for your intended start date.

Worried you won’t be able to handle the filing details with the busy holiday season upon you? Contact us! We’ll be happy to help you file your paperwork now, so you can get right down to business in the New Year.

 

5 Qualities That Give Veterans An Entrepreneurial Edge

Veterans Day gives us pause to reflect on the sacrifice and service of our women and men in the military. We enjoy many freedoms because of their bravery and selflessness. Indeed, we owe them a debt of gratitude.

I admire and respect veterans for many reasons. Among them are the fine qualities that make them not only outstanding individuals but also seriously effective entrepreneurs.

What characteristics and skills do veterans bring to the table that can help them succeed in business?

  • Courage – Many veterans have faced adversity, danger, and fear most of us will never fathom. Their courage when confronted with risk gives them a competitive edge because they have learned to stay calm, cool, and collected when the pressure’s on and things seem uncertain.
  • Determination – “When the going gets tough, the tough get going.” Veterans embrace this and live by it, which can help them immensely as entrepreneurs. Although there’s no sure thing in business, the one thing you can bet on is that times will get tough now and then. Business owners need a heightened degree of determination to weather the storms and stay the course.
  • Commitment – With their strong sense of commitment to the cause, veterans put their all into achieving their goals. That’s a tremendous asset in the business world where not only is strategy important, but also is the drive to put forth the effort and energy to get results.
  • Resilience – Sometimes the rigors of entrepreneurship will knock down even the best of us. Because veterans have the strength of character to rise above challenges, they are well equipped to bounce back when facing tough circumstances.
  • Versatility – Along with resilience, veterans’ ability to roll with the punches and adjust strategy when needed can fuel their success in business. Their adaptability can help them pivot gracefully when market changes, competitive pressures, or the regulatory environment dish out unexpected challenges.

Veterans have traits we should all have and hone as entrepreneurs. So while we celebrate their contributions to our country on Veterans Day, let us also remind ourselves of what we can learn from them so we become more effective business owners.

Are you—or someone you know—a veteran who is thinking about starting a business? Check out CorpNet.com’s business filing services that simplify starting and running a business. Our Business Structures Wizard is a great place to begin as you decide on which business legal structure might be best for you.

 

                               

By | November 8th, 2016|Events & Announcements, Running A Small Business|0 Comments

Which Candidate Will Be The Best President For Small Business?

Quite the question, right? But relax, I’m not here to get on a political soapbox and tell you who to vote for. Rather, I’m encouraging you to think about what’s important to you as a business owner and as an individual.

I’ve observed that Republicans typically tend to push for less regulation and encourage more business boosting initiatives than politicians in the Democratic Party. And the Democrats tend to push for initiatives that are in the interest of the middle class, the class that includes most small business owners. Of course, what candidates say they’re going to do and what actually happens don’t always match. Good intentions don’t always come to fruition because there are many obstacles that stand in the way of execution. Sometimes plans that sound too good to be true end up being just that after more research into their feasibility is done. And sometimes, sadly, candidates simply don’t follow through on their promises.

If you review each candidate’s website, you’ll see what their intentions are for small businesses. Below, I’ve listed what stands out to me:

Trump’s Pro Small Business Initiatives:
• Putting a stop to overregulation that makes it difficult to start and run a business.
• Lowering the business tax rate from 35% to 15%.
• Renegotiating trade agreements so American companies have a fair shake when pursuing doing business with other American companies.
• Increasing the production of American energy onshore and offshore (which potentially—eventually—would cut energy and transportation costs for all Americans, including small businesses).

Clinton’s Pro Small Business Initiatives:
• Stimulating small business lending by easing burdens for community banks and credit unions.
• Allowing entrepreneurs to defer student-loan payments with no interest while they start their businesses.
• Offering incentives to state and local governments to cut the red tape involved in starting a new business.
• Simplifying the tax filing process and creating a standard income tax deduction for small businesses.
• Cracking down on big businesses that don’t pay or late pay small businesses.

Devil Is In The Details
Clinton’s website goes into more detail about her proposals than does Trump’s, giving us some peace of mind that she has thought things through. But could her position on some other key hot button issues (like health care and raising the minimum wage) hurt small businesses in the long run. As for Trump, will what he proposes benefit the smallest of businesses or only large corporations?

According to the weekly reader poll, SmartPulse, in SmartBrief on Leadership, 69 percent of business leaders believe this year’s elections will either tremendously or moderately affect their businesses.

It’s clear the business community is tuned into and watching this presidential election closely.

Whether you’re starting a business or running an existing one, you should be, too. Think about what you want for the future of your business and your family—and vote on November 8 for the candidate you believe will work to fulfill your vision.

Photo: Adobe Stock

                               

Fall Tips To Help Your Business Have A Strong End-Of-Year Finish

Although most of the year has already passed and we’re now into the autumn season, don’t panic if your business has fallen a little bit behind on its goals. It’s not too late make changes that can help lead to a strong finish in 2016.

Whether you’ve just started your business or have been running yours for years, the key is to take action sooner rather than later—and to focus on efforts that will improve your bottom line now and into 2017.

 

  1. Nurture Customer Relationships.

If you’ve fallen out of touch with some customers, now’s the time to reconnect. Just be careful to do so with their best interests at heart, so you don’t come across as desperate or pushy. One easy way to start conversations is by emailing them an interesting article that has information they can benefit from. I recommend reaching out to each select customer individually rather than in a mass email. By personalizing your communications, you’ll make them feel special—and more engaged in revisiting the status of your business relationship.

Also, consider putting a formalized customer relationship management process in place, so there’s a method (rather than madness) in how you follow up with customers after certain actions, transactions, or lack of activity. A number of customer relationship management systems (at varying price points) are out there that can help you track customer activity and automate personalized communications.

A little goodwill and top of mind awareness can go a long way in generating more sales, so it pays to check in with customers regularly to show you care.

 

  1. Upsell, Upsell, Upsell!

Why would you not seize the opportunity to sell more products or services to the customers who have shown they’re raving fans of your brand? If you haven’t been sending emails or postcards or calling loyal customers with information about your other products and services, you’re missing sales opportunities.

Afraid you’ll seem pushy? You don’t have to fear that if you approach customers with the intention of helping them solve a problem or benefit in some way. As I mentioned before, showing you care fosters goodwill and can generate sales as a result.

 

  1. Streamline Your Administrative Activities.

Take a moment to review your administrative processes and discover where you might have excessive paperwork, duplicate work, and bottlenecks that are slowing down productivity. From accounts payables to billing to project management to customer data entry, look for ways to save time by streamlining tasks.

 

  1. Keep Spending In Check.

Although you should always be cognizant of your business’s spending habits, it’s especially critical now if you’re behind schedule on reaching your financial goals for the year. Look closely at your costs, and zero in on the “must haves” versus the “nice to haves” so you can cut out unnecessary expenses. Lowering costs has a direct impact on your profit and loss statement, so if even if you ignore all other suggestions, pay attention to this one!

 

  1. Make Sure You’ve Met Your Business Compliance Requirements.

Rather than discover you’ve dropped the ball, check to make sure all your t’s are crossed and i’s are dotted now regarding your business compliance responsibilities. If required, have you filed your initial and/or annual report and complied with your business license and permit obligations? Corporate compliance services like those from CorpNet can help you ensure you’re up to date and won’t be hit with penalties. Best of all, when the New Year begins, you’ll be able to focus on activities that will drive revenue rather than put out fires.

 

  1. Think Ahead About Your Business’s Direction.

Whether you’re just starting your business or planning to close it, taking care of matters before the end of the year offers some potential advantages.

If you plan to launch your business in 2017, you can avoid becoming over-stressed during the busyness of the New Year by taking advantage of CorpNet’s delayed formation filing process. It allows you to submit your formation paperwork before the end of the year, but make the effective date of your business the first of the year.

If you know you’ll be closing your business in the near future, you might consider taking care of filing for dissolution now. Doing so before year-end might help you avoid paying additional taxes and penalties.

 

Move Your Business Forward This Fall—And In The Future

Also, think proactively about what you can do to succeed in 2017. All of the things I mentioned earlier will help, but also consider reviewing your choice of legal structure for your business. By making a change to an LLC, S Corporation, or C Corporation, you have the opportunity to gain liability protection and possibly some tax advantages, as well.

By putting more effort into your customer relationships, running your business more efficiently and cost effectively, and paying attention to compliance requirements, you’ll be taking positive steps toward a strong finish in 2016 and a successful start to 2017.

Back to Basics: LLC or Corporation? Which Is The Better Choice For Your Business?

Both forming an LLC and incorporating your business safeguard you by protecting your personal assets if legal action is taken against your business. They also give your business a boost of credibility by having either “LLC” or “Inc.” behind your company name. But there are differences that could make one or the other the better choice for you.

I can’t emphasize enough the importance of knowing the pros and cons of the legal structures available to you before you decide which will serve your business most effectively.

 
The Low-down On LLCs

Many owner-managed businesses opt to form as LLCs.

LLC owners are referred to as “members,” who each own a certain percentage of the business. Single-member LLCs are uncomplicated from a compliance and management standpoint. When you have multiple members, however, you should have an operating agreement that documents who can make decisions and how transferring membership interests should happen if a member leaves, dies, or files bankruptcy. Some states require that the remaining members dissolve the LLC under the circumstance of a member’s leaving, death, or bankruptcy.

From a tax standpoint, you can choose to have your LLC treated in one of two ways.

  • As a pass-through entity, with the profits and losses of your business passed to your LLC members’ personal tax returns. If your business isn’t profitable, that will lower your personal tax obl
  • As an S Corporation, whereby only salaries and wages are subject to self-employment taxes (FICA and Medicare), not company profits taken as distributions to members.

Because there are notably less formation paperwork and compliance requirements with an LLC than there are with a corporation, business owners who want legal protection and tax flexibility without a lot of complexity find the LLC structure an attractive option.

One potential disadvantage of forming an LLC, however, is that you cannot sell stock to raise capital for your business. And if you seek funding from venture capitalists, you may get turned down because many will only invest in corporations.

 
Insight About Incorporating

Whether S Corporation or C Corporation, the owners of corporations are called shareholders. Their percentage of ownership corresponds to their percentage of shares in the business. Unlike with an LLC, it’s typically simple to transfer shares (ownership) from one person to another. That means the business can continue onward when shareholders leave, die, or sell their shares.

S Corporation

With an S Corporation, a business’s income, losses, and deductions pass through to its shareholders. Typically, the shareholders report corporate income on their personal income tax returns.

Unlike LLCs and C Corporations, S Corporations are limited to 100 members/shareholders. So while they can sell stock, their potential to raise capital in that way is somewhat limited.

While S Corporations require more paperwork and ongoing compliance than LLCs, they don’t come with as much formality as C Corporations.

C Corporation

Tax treatment of C Corporations involves what is often called “double taxation.” A C Corp pays corporate income tax on its profits, and then its shareholders pay personal income tax on the profits they receive as dividends.

C Corporations don’t have a limit on the number of shareholders that can invest in them, and they may be more attractive to outside investors.

Because C Corporations operate as separate legal entities from their owners, they provide more personal liability protection than other business structures.

Note that potential drawbacks to incorporating as a C Corporation are the higher formation costs, extra compliance requirements, and additional oversight they are subject to.

 
Do Your Due Diligence, Then Decide.

With both legal and financial aspects of your business affected by your choice of legal structure, make sure you carefully evaluate your options. I encourage you to seek professional expertise and guidance, so you fully understand the advantages and disadvantages of each structure.

In the meantime, you can get off to a great start by using the CorpNet Business Structure Wizard for gaining a better idea of the structure that might work best for you.

                               

The Series LLC – All You Need to Know!

What Is The Series LLC (SLLC) Business Structure?

The series LLC (or SLLC for short) allows multiple “series” within a master LLC to operate as separate entities (with their own names, bank accounts, and record keeping). Each series can conduct business independently in this way because series LLCs’ articles of formation explicitly allow them to have unrestricted segregation of membership interests, assets, liabilities, and operations.

Different members and managers might run each series, and their rights and responsibilities might vary from series to series. Each individual series may secure contracts, own property, sue, and be sued without affecting the other series under the series LLC.

Most significant about the series LLC is the liability protection it provides. Similar to a corporation with subsidiaries, one series’ assets are protected from the liability risks of other series under the master series LLC. What’s particularly attractive about a series LLC is the level of protection it offers comes without the cost of setting up new legal entities for each series. The series LLC is subject to just one formation filing fee, no matter how many series are a part of it.

Where And How Can You Set Up A Series LLC?

Not all states allow the formation of series LLCs, so the structure is not an option for every business everywhere. States currently allowing formation of series LLCs include: Delaware, Illinois, Iowa, Nevada, Oklahoma, Tennessee, Texas, and Utah.

Forming a series LLC works similarly to forming a traditional LLC. It involves filing articles of organization in the state for your master LLC. (Most likely the state will require that your articles of organization express that the LLC is authorized to form series under it). You’ll also need to create operating agreements to document the rules for overall operations of the master LLC and for each series you know you want to form. The operating agreements for each series will define any unique rules that apply to the individual series. (Note that you can add more series as needed in the future.)

What Types Of Businesses Might Benefit From The Series LLC Structure?

Series LLCs offer a good deal of flexibility and simplicity. Business owners such as real estate investors with multiple properties, franchisees with multiple locations, and other companies with distinct profit centers might benefit from forming a series LLC to separate and protect each operation.

What Else Should You Know?

With series LLCs being a fairly new legal structure, not all tax issues are completely clear across the board. While federal proposed regulation considers series to be their own entities for income tax purposes (which means they must file their own tax returns and pay their own tax obligations), tax treatment at the state level could be different.

No matter what legal business structure you’re considering, I strongly encourage you to get trusted professional legal and accounting guidance before making that all-important decision. And after you’ve done your homework and have all the knowledge you need to choose wisely, don’t risk missing anything mission critical during the formation process. At CorpNet, we’re here to help you save time and headaches by taking care of all the filing details for you. From series LLCs to regular LLCs to S-Corporations to C-Corporations, contact us to cover all your business filing needs!