/Incorporating a Business

Should You Convert Your Business Structure to an S Corp?

Question Mark for Making Decisions

You’ve been chugging along as a sole proprietorship for a while now, but you’re beginning to realize that might not be the best idea to protect your business. So you’re considering converting your sole proprietorship to another structure, specifically the S Corporation.

Ask yourself the following questions to determine if now is the right time to convert your business structure.

1. Do You Want to Bring on Investors?

Maybe you bootstrapped your business, but now you’re ready to take the company to the next level, and to do that, you need investors. This is an automatic reason to convert to an S Corp because investors rarely want to invest in a sole proprietorship (it puts their assets at risk).

If you want potential investors to take you seriously, change your structure to an S Corp. That way, they aren’t liable for your company’s debts or legal fees, and they’re more likely to give you the money you need.

2. Are You Worried About Protecting Your Personal Assets?

Did you realize that as a sole proprietor, the law sees you as an individual as the same as your business? That means if you are ever sued, you may have to shell out from your personal savings to cover legal fees if your business doesn’t have the funds.

Incorporating, on the other hand, separates you from your business, providing a legal shield around you that protects your assets and finances from being taken for the business.

3. Are You Looking for Some Tax Relief?

While incorporating won’t magically eliminate your taxes, there are some pretty great tax perks, like only being taxed once (versus twice like with the C Corporation) and being able to report your business profit and loss on your personal income tax forms.

4. Do You Want to Reduce Your Likelihood of an Audit?

Sole proprietors are nine times more likely to get audited than corporations. What does that tell you? It’s time to change your business structure! Being audited can be a paperwork nightmare that can eat up precious time you’re better off spending running your business, so if a simple switch of business structure could reduce your chances, go for it.

5. Do You Plan to Sell Your Business?

Whether you want to sell in a year or 10, the S Corp is the ideal business structure to make that transition a breeze. Because you can’t transfer ownership of a sole proprietorship (it’s tied to you and only you), the S Corp is a better entity to package up and hand over to the new owners.

If these questions made you realize that, yes, you do need to convert your sole proprietorship to an S Corp, now’s the time to do it. As long as you file File Form 2553 by March 15, 2016 (or let CorpNet do it for you), your business will be treated as an S Corp for the 2016 tax year.

Don’t delay! Get your S Corp Election order processed now with CorpNet so you can reap the tax benefits for 2016.

Image: Dollar Photo Club

Nellie in the News: February 2016

Wow – February went by fast around the CorpNet offices.  March is already next week and we’re busy helping entrepreneurs start a business making the year fly by already.

Nellie has been busy leading us daily and sharing her expertise across blogs, podcasts, webinars and in-person events. Here is what she was up to this month.

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

nellie in the news

Speaking

Startup Weekend Ventura County

Nellie and her husband/Business partner Phil Akalp will be speaking on starting and growing a successful business on March 11, 2016. More info and tickets: http://bit.ly/1QomPa1

OCIACC

Nellie will be presenting a workshop to the Orange County Iranian-American Chamber of Commerce on March 22nd at 6:00pm all about Small Business Incorporation. Members can attend for free and non-members have to pay $10. More info and tickets: http://bit.ly/24nCWMJ

 

Interviews & press Mentions

monster.com – Tips on how to Jumpstart your Company’s Social Media Strategy http://mnstr.me/1QXTTYA

Parent Entrepreneur Podcast – Tailor your Parenting Experience to Create Business Success with Nellie Akalp http://bit.ly/1X1jcJV

Hearpreneur – Nellie and 14 Entrepreneurs Reveal What Entrepreneurship Means to Them http://bit.ly/1LbC6a6

Small Business Advocate – Why Your Business Should Be its Own Legal Entity with Nellie Akalp http://bit.ly/1PMjKC3

Small Business Advocate – Should Your Business be an S Corporation or an LLC with Nellie Akalp http://bit.ly/1PMjKC3

Cake HR blog – “Mompreneur” – A defining or limiting word for working moms? http://bit.ly/1RmWyeD

Office Hours FM – Legal Startup Tips with Nellie Akalp http://bit.ly/1RJJYq9

Thousand Oaks Acorn – In Business for Business – a feature story on Nellie Akalp http://bit.ly/1ToHPjz

amazing.com Nellie and 5 Entrepreneurs Share the Best Advice They Ever Got http://bit.ly/1ouonH9

SCORE podcast – Business Incorporation 101 with Nellie Akalp http://bit.ly/1PLyobp

Working Women Entrepreneur – Do It To Win It with Nellie Akalp of CorpNet.com http://bit.ly/1UkIFPd

 

Expert Contributed Posts

Forbes – 6 Ways to Fall In Love Again with Your Business http://onforb.es/1O52Usw

Small Business Trends – The Right and Wrong Reasons to Incorporate or Form an LLC http://bit.ly/1PKDOVq

Huffington Post – The Problem with Agreeing to Let Someone “Pick Your Brain” http://huff.to/20LzyvR

Showcasing Women – Do I Really Need a Patent? What You Need to Know Today http://bit.ly/20qVWoI

Freshbooks – Why You Need a Business Bank Account http://bit.ly/1PMPfIN

GoDaddy – How to Avoid Late Fees (and worse fates) For your Business http://bit.ly/1QcaAPq

How to Incorporate in 6 Easy Steps

702_3518095There’s little you can do that’s more important than to protect your business by incorporating it. But so many entrepreneurs think the process of incorporating a business is complicated and so never bother with it. Nothing could be further from the truth. Here are six simple steps to help you incorporate.

Step 1: Conduct a Corporate Name Search

You first need to see if the name you want to use for your business isn’t used by anyone else. If it is, you’ll have to change the name slightly or choose a different state to incorporate in. We offer a free name search you can use to see if you can file your incorporation paperwork under the name you want.

Step 2: Choose Where You Want to Incorporate

The next step is to decide which state you will incorporate in. Many people choose to incorporate in Delaware because of its business-friendly environment. As a corporation in Delaware, you won’t pay state corporate income tax if your corporation was formed in Delaware but you do not transact business there (but there is a franchise tax). Still, it’s often easiest to incorporate in the state you operate out of. The decision is up to you. Continue reading “How to Incorporate in 6 Easy Steps” »

By | March 25th, 2015|Incorporating a Business|0 Comments

Incorporate a Business: the Best Way to Protect Your Assets and Save Taxes

775_3751966We’ve written before extensively about all the benefits of incorporating a business, so I thought I’d take a different approach. Let’s look at some scenarios where being incorporated would help you in your small business.

You Get Sued

While most business owners are horrified at the prospect of being sued, it can happen, so it’s important to protect your business against this occurring. If you operate as a sole proprietorship and the judge says that you now have to pay this angry customer or supplier $10,000 and you don’t have that money in your account, guess where it comes from? The court can legally take your car, house, or other assets to pay that debt if the business is running dry.

Incorporating, on the other hand, separates your personal assets from the business. Creditors can never touch your personal assets if you are sued as a corporation. Continue reading “Incorporate a Business: the Best Way to Protect Your Assets and Save Taxes” »

By | February 13th, 2015|Incorporating a Business|0 Comments

6 Easy Steps to Incorporating Your Business

816_4476421Assume incorporating a business is too complicated for your lil ole company? Think again. There are really only six steps to incorporating, and you can do them yourself or let the professionals at CorpNet handle them.

See if Your Business Name is Available

When you incorporate in a given state, you need to know that the name you want to use for your business isn’t used by anyone else. If it is, you’ll have to change yours slightly or choose a different state to incorporate in. Conducting a name search will let you see if you can proceed to file your incorporation paperwork under the name you want. Continue reading “6 Easy Steps to Incorporating Your Business” »

By | February 11th, 2015|Incorporating a Business|0 Comments

How to Form a Corporation: Appointing a Board of Directors

430_3141096If you’ve decided to form a corporation, congratulations to you! You’re on the right track to protecting yourself and taking your business more seriously. But the work’s not done yet. One of the steps you’ll need to do in the incorporating process is to appoint a Board of Directors.

By law, your corporation must have a Board to represent it and to make decisions on behalf of shareholders. The number of members required will vary from state to state. For example, if you incorporate in California, you’re required to have at least one Board member.

Having more can be advantageous, as it’s your Board that will help you make decisions about your company. Together, you can determine your business’ path for:

  • Strategic growth
  • Issuing shares
  • Raising prices
  • Adding new products

Continue reading “How to Form a Corporation: Appointing a Board of Directors” »

By | January 19th, 2015|Incorporating a Business|0 Comments

5 Tips to Incorporate Your Business

511_3060466Is incorporating a business on your list of to dos for 2015? If so, you’ll set the stage for a fantastic year for your business! Whether you plan to incorporate in California, Tennessee, Ohio, or any of our 50 states, the following tips will make it easier for you.

Tip 1: Make Sure Your Name is Available

Conducting a free CorpNet corporate name search will let you know if anyone is already using the name you want for your business. Note that if you’re incorporating in California, as an example, you don’t have to include a suffix like Corporation, Corp., Incorporated, or Inc. after your business name, unless it is a close corporation.

Tip 2: Register Your Corporation with the Secretary of State

This is the government agency responsible for all forms, filings, and record keeping. Keep in mind that you’ll need to file your fictitious business names (DBA – doing business as) at the county level, not the Secretary of State. Other permits and licenses may be required at the county or even city level in California. The usual point of contact is the County Treasurer’s Office. Continue reading “5 Tips to Incorporate Your Business” »

By | January 5th, 2015|Incorporating a Business|0 Comments

What You Need to Incorporate a Business

112_2712553So you’ve decided to form a corporation. Congratulations! This business structure will protect your personal assets and keep you separate from your business entity. But before you enjoy that peace of mind, you’ll need to take care of the actual process of incorporating. Here’s the process for forming your own corporation.

  1.  Get a Name Check

Before you can incorporate, you need to ensure no one else in your state is using the same business name. You can do that by using our free Corporate Name Search tool.

Note: Include words like “Inc.” or “corp.” if you plan to add them to your name once incorporated when searching.

  1.  Draft Your Articles of Incorporation

Most states refer to the formation document as the “Articles of Incorporation” or “Certificate of Incorporation.” The document contains information about your company, including:

  • Company name
  • Business purpose
  • Registered agent (that might be you or a third party)
  • Incorporator (that might be you or a third party)
  • Number of authorized shares
  • Share par value
  • Preferred stock
  • Directors
  • Officers

Continue reading “What You Need to Incorporate a Business” »

By | October 1st, 2014|Incorporating a Business|Comments Off on What You Need to Incorporate a Business

How CorpNet Helped Me Grow My Business

I have the unfair advantage, working with CorpNet behind the scenes. I’m one of the first to see their newest products and see what offerings are in the pipeline. But it took me a few months after I started working with the company before I started drinking the Kool-Aid and actually incorporated my marketing business. Nellie Akalp asked me to tell my story about my business and how CorpNet helped me. Here it is.

egg logoI’ve always been a writer at heart, ever since I could first hold a pencil.

I found my professional passion as a writer in marketing after earning my MBA, and worked for a few private firms in marketing roles. After working for a few crazy bosses (no, really), I knew I could do a better job myself. And so I became an accidental entrepreneur in 2006 when I started my business, Egg Marketing & Communications. Continue reading “How CorpNet Helped Me Grow My Business” »

By | August 22nd, 2014|Incorporating a Business|Comments Off on How CorpNet Helped Me Grow My Business

Nellie Akalp Tells You Why You Need to Incorporate on FOX Business

Once again, our fearless leader Nellie Akalp was featured on FOX Business. This time, she discussed the benefits of incorporating your business. She told the audience that incorporating provides a shield for you and your business, and also separates you from the business by protecting your personal assets.

And it doesn’t have to be expensive and done by a lawyer. You can even take care of the incorporating process yourself, though you will be responsible for keeping up with annual paperwork.

Where you incorporate matters, too. Nellie said for companies with 5 or fewer shareholders, the best place to incorporate is in your home state.

Watch her recent FOX interview below:


By | July 25th, 2014|Incorporating a Business|Comments Off on Nellie Akalp Tells You Why You Need to Incorporate on FOX Business