/Starting a Business

Running Your Business: Do You Know What You Don’t Know?

With school back in session, students of all ages are learning new things—and discovering how much they don’t know in the process. Whether you’re an aspiring entrepreneur or long-time business owner, one thing is certain: like the kids who are back to school, you always have room to learn and grow.

As I’ve learned and grown as a business owner, one of my favorite phrases has become, “You don’t know what you don’t know.” How true, right? It’s far too easy to fool ourselves into thinking we really know all there is to know. But the truth is we will never ever know everything when it comes to starting and running a business, because things change all the time. We have to “school” ourselves. That means doing additional research and staying tuned in to new developments. The business climate, legal requirements, and technology constantly morph, sometimes subtly and sometimes significantly. If we don’t keep up with the various moving parts that affect us, our businesses could fall behind—or worse.

So I urge you to stay attentive and continue to learn about what’s new or what has changed with respect to:

  • Business structures, liability protection and filing requirements– for example, potential benefits of changing from a sole proprietorship or partnership to Corporation, an S-Corporation or a Limited Liability Company.
  • Tax laws and filing requirements – such as changes to the business tax rates, mileage reimbursement rates, valid tax deductions, filing deadlines etc.)
  • Corporate compliance requirements – such as annual reports, tax deadlines, permit and license filing due dates, etc.
  • Marketing tools, best practices, and regulations – like new social media platforms and automation tools, SEO, content marketing, the CAN-SPAM Act, etc.
  • HR issues – including employee benefits, hiring, firing, affirmative action, documentation requirements, etc.
  • Business technology – like cloud-based accounting software, CRMs (customer relationship management systems), virus and malware protection, mobile payment platforms, etc.

This is just the short list! Basically, anything related to entrepreneurship demands ongoing learning, because owning a business isn’t a static condition but rather a dynamic process. So as the kids strap on their backpacks this school season, prepare to gear up for your own journey in learning. Trust me, your homework will pay off!

Looking to start your own business? Remember, you don’t know what you don’t know—and we can help fix that. Download our free Starting A Business Checklist now! It’s a sure way to learn about what you need to do to get a successful business off the ground.

                               

Why You Need to Incorporate Your Business

When you think about incorporating your business, do you scoff, “Not me. I’m just a one-person/home-based/part-time business—incorporation is for the big guys”? If so, it’s time to rethink your attitude. You see, every small business—no matter how small or informal—needs to be incorporated.

That’s because no matter how small or informal your business is, you could be sued. Suppose your business isn’t doing well, you can’t pay a business debt and the creditor takes you to court to get their money back. Perhaps you are a children’s party planner, a child is injured during a birthday party you organize at a local park, and the parents decide to sue you. Or maybe you own a one-person accounting firm and, after you make a mistake on a client’s taxes that costs them a lot of money, they sue you for the damages.

In any of these cases, unless your business is incorporated, all of your personal assets could be at risk—including your savings, possessions and even your family home. And even if the lawsuit is baseless, you still have the legal costs involved in defending yourself in court.

If you haven’t done anything to determine a legal form for your business, and you are the only person in your business, by default you’re considered a sole proprietor. Even if you have a partner and the two of you have formed a general partnership, your personal assets still are not protected.

Why does incorporating provide so much protection? When you incorporate your business, you are creating a new legal entity that’s separate from its owners. If your corporation owes a debt or if it is sued, the business—not you personally—is liable.

Incorporating has several other advantages:
• It makes it easier to separate your business and personal finances, which has tax advantages.
• It helps you establish a credit score for your business so you don’t have to rely on your personal credit score.
• If you think you might ever need to get a business loan or look for investors to help finance your business, being incorporated will help there, too.
• Being able to put “Inc.” or “LLC” after your business name just looks more professional, which can make customers and clients feel more confident doing business with you.

There are several different forms your business can take when incorporating: a C corporation, an S corporation, or an LLC (limited liability company). Here’s a quick overview of the differences:
• C corporation: A C corporation pays federal income taxes. However, any dividends paid to the owner (or other shareholders) are also taxed. This is sometimes called “double taxation,” and the S corporation form was created to help avoid it.
• S corporation: An S corporation doesn’t pay federal income taxes. Any income or financial losses pass through to the owner and get reported on his or her personal tax returns.
• LLC: Limited Liability Companies have a more flexible management structure than C or S corporations, while still protecting your personal assets. Any profits or losses from the business will be reported on your personal tax return.

There are some costs associated with incorporation, as well as some paperwork you’ll need to complete every year. However, when you consider the risk to your personal finances that could arise from not incorporating, the cost is well worth it.

Find out more about corporation business structures.

To take advantage of all these perks, incorporate your business with CorpNet today! Call us for a

                               

Filing a DBA – FAQ

This month in our FAQ series, we tackle the most commonly asked questions about one of the most popular entity types – the DBA.

Starting a business can be overwhelming, and one of the first and most important steps is choosing a business entity. A DBA, which stands for “Doing Business As”, is also known as a fictitious business name or assumed business name. A sole proprietor can file a DBA in order to operate under their preferred business name, or a DBA can be filed underneath an existing corporation or LLC in order to advertise as or accept payments under an alternative name. Below are some of the most common questions and answers our CEO Nellie Akalp receives regarding the DBA:

Q: If I’m a sole proprietor, do I need to file a DBA?

A: It depends. If you are operating your business as a sole proprietor, you’ll need to file a DBA to operate your business with a name that’s different than your own personal legal name or last name. For example, if you want to start a gardening business with the name “Spring Flowers Landscaping” then you’ll need to file a DBA to be able to use that name.

But if you’re a sole proprietor and are going to use your own personal legal name or last name for your business, then a DBA isn’t necessary. In addition, you don’t need to file a DBA to use a business name that includes your surname and a combination of words that accurately describes your business. For example, if your name is Jane Doe and you have a landscaping business, you do not need a DBA to call your business “Doe’s Landscaping.”

Q: If my business is structured as an LLC or Corporation, do I need a DBA?

A: If you filed to become a corporation or LLC, then you’ve already registered your business name with the state and don’t need a DBA to use the official name on the filing paperwork. However, you do need to file a DBA to use any variations from the official name on your LLC/incorporation paperwork.

Q: When do I need to file my DBA?

A: You shouldn’t conduct any business under a fictitious business name until filing a DBA for that name. Most banks typically won’t let you open a business bank account (and accept checks to your fictitious business name) until you have filed for a DBA.

Q: Is there a difference “fictitious business name” and Doing Business As (DBA)?

A: No. Fictitious business name, DBA, and assumed business name all mean the same thing.

Q: If I file for a DBA, does this prevent others from using my business name?

A: No. In most states, a DBA doesn’t guarantee exclusive rights to a name. When you file for an LLC or corporation, this can give you exclusive rights in your own state. You can also file for a trademark to guarantee exclusive rights to the name within your line of business in all 50 states.

Do you need help filing a DBA or have a question about another aspect of starting a business? Call the CorpNet.com team today for a free business consultation at: 888.449.2638

                               

How to get an LLC License

Here at CorpNet, we are often asked how to form an LLC, also referred to as a Limited Liability Company, when wanting to start a business.

To be clear, an LLC is not a business license; as one cannot obtain an LLC license.

A Limited Liability Company (LLC) is a legal entity that bears similarities to both corporations and partnerships. An LLC is formed under specific state statutes that provide for the creation and regulation of this special type of entity that has come to be commonly used and respected in business.

An LLC can be used to combine the limited liability features of a corporation with the flexibility and tax benefits of a partnership. Owners of an LLC are generally known as “members.” Management and control of the entity resides with the members, unless otherwise provided in the articles of organization of the LLC or within the LLC operating agreement.

An LLC provides the same personal asset protection with fewer hoops to jump through. You can also raise capital with an LLC. Additionally, with an LLC, you can:

● File your business LLC taxes on your personal tax return
● Allocate profit and loss to members of the LLC
● Avoid having to have an annual shareholders’ meeting (unlike a corporation)

New small business owners often assume that forming an LLC is a complicated thing. It’s not, actually, but it is one of the best things you can do to protect your personal assets and your business.

Here are 7 steps to follow as to how to register your new business by filing an LLC application within your state:

1. Choose a Name.
Your name will be the first thing people see or hear as it relates to your new business, so make it a good one! Next, you’ll want to make sure you’re the only one using that name. You can do that with a free corporate name search in your state.

2. Register the LLC and File Your Paperwork
If you’re doing the filing yourself, you’ll need to download your state’s Articles of Organization paperwork and fill it out. If you’re letting a document filing service like CorpNet handle it; you’ll just need to provide basic contact information and a few details about your company.

3. Get Your LLC’s Tax ID
Before you can start operating as an LLC, you need an Employer Identification Number. This is like a social security number for your business, and one you’ll need before opening a business bank account.

4. Create Your Operating Agreement
This document outlines the rights and obligations of the members of your LLC and lists the distribution of income of the Limited Liability Company to its members. Your LLC Operating Agreement won’t need to be filed with your state, but you will need to keep one on premises, signed, if you have other shareholders.

5. File Business Licenses and Permits
Additionally, you should apply for any business licenses or permits you’ll need to operate your business. It’s best to do this before you start operating your business to avoid potential fees or issues down the road.

6. Keep Your LLC Compliant
Once you’re operating as an LLC, your work isn’t done for good. Each year, you’ll need to file your annual report. The due date for this annual report depends on where you filed your LLC. For example, if you filed it in Michigan, Delaware, North Carolina, Georgia, Florida, or Texas, there’s a specific date that your annual report is due. In most other states, it’s due on the anniversary of when your LLC was filed.

7. Finally, Take Care of Loose Ends
Depending on where you’re based, you may need to publish your intent to form an LLC in a local newspaper. If you form an LLC in New York, for example, you’re required to run that intent in an approved newspaper for 6 consecutive weeks.

Many of our customers prefer the LLC over the S Corporation because they require fewer formalities and less paperwork than the corporation, while still providing that protection of your personal assets, as well as tax benefits. Contact CorpNet.com today and let us help you file your LLC application and make your business reams into a reality!

                               

Event Recap – #GirlBoss & #DiversifyLA

One of my all-time favorite things to do as successful serial entrepreneur and the CEO for CorpNet is having the opportunity to share my insight with others. Recently I have had the honor of participating in some amazing and uplifting panel discussions. A few weeks ago it was a candid discussion from awesome #girlbosses for Ellevate Network LA. Last night it was an enlightening talk about diversity in entrepreneurship for Thunderbolt LA called #DiversifyLA.

#GirlBoss

A few weeks ago on July 26th I was delighted to join a group of amazing female entrepreneurs to share our journey of being a #GirlBoss with Ellevate Network LA. If it’s one thing I love – it’s discussing entrepreneurship with other successful female entrepreneurs!

We were all able to share the highs and lows in our careers which gave insight, laughter and above all, hope, to our audience. I shared my stance that being a woman entrepreneur can have it’s advantages because in general we can be nurturing which works well with team environments. We also can come up with out-of-the-box solutions when faced with an issue instead of making rash decisions.

I got my message across to new and aspiring entrepreneurs that they should find something they’re passionate about, have a vision, have a plan, and be determined to go all in. Starting a business is very fulfilling but it’s not for everyone and I wanted to be clear about the ups and downs that come along with the experience, especially as a #GirlBoss!

#DiversifyLA

On August 2nd I was a guest on the #DiversifyLA panel to talk about how I am an Iranian FullSizeRender-34immigrant and how I approach diversity as an entrepreneur and business owner.

The panel, which was made up of mainly immigrant entrepreneurs, shared similar and different stories from our experiences. We discussed how we approach diversity at our businesses in the hiring process and in general when running a business. For me, it was great to enlighten others on the obstacles and challenges I have faced throughout my journey as an Iranian Immigrant. For example, having English as a second language and also being a woman founder in the tech industry.

It was a fantastic event and evening where I was able to connect with other established entrepreneurs and even some who are just starting out to share our stories.

The most gratifying part of being a guest on these panels has been the amazing feedback and support I got from the audience after each event. It really validates that I am doing what I’m supposed to be doing and where I exactly need to be in this stage of my life.

Are you ready to take your business to the next level? Call CorpNet.com for a free business consultation and to incorporate or form an LLC!

 

                               

CorpNet FAQs – Business Licenses

 

As an online legal document filing service that helps entrepreneurs with an array of startup needs, we get asked a ton of questions from our clients about various topics. We decided to start sourcing these questions and create a new blog post series for our readers, as some of you may be wondering the same thing but haven’t found the answer elsewhere.

Today we are launching our new FAQ series starting on the topic of business licenses. Here are some of our most frequently asked questions on the popular topic followed by answers from our CEO Nellie Akalp. Still have Questions? Feel free to post in the comments below and Nellie will be happy to provide additional insight!

Business Licenses

Q: What’s the difference between a business license and registering a business? If I already registered my LLC or corporation, do I still need a business license? 

A: Registering your business and getting your business license are two different things – and you most likely will need to do both. Registering a new business with the state (either by forming an LLC, corporation, or filing a DBA) provides a legal foundation for your business. Then, the business license(s) gives you the right to operate your business…similar to how a driver’s license lets you drive a car.

Q: How do I know what kind of business licenses I need? 

A: The specific license and permit requirements vary based on your type of business and your location. As expected, a home contractor or restaurant will have more permit requirements than a web designer. Find your business type on our Business Licenses page to check the specific requirements for your business. If you don’t see your specific business listed, give us a call at 1.888.449.2638 and we’ll help you out.

Q: What are the penalties if I don’t have the right licenses for my business? 

A: You can face fines, and even have your business shut down if you are caught operating without the right licenses/permit paperwork in place.

Q: How much does it cost to get a business license or permit? 

A: Exact costs depend on the license type and your location. Find your business type on our Business Licenses page to view the pricing for your particular business license and location.

Q: What if my business is involved in more than one type of activity or has multiple locations?

A:  Each business location and each business type is subject to licensing requirements, so you most likely will need to get the proper permits/licenses for each location and business activity.

Q: How long does a business license last? 

A: Typically speaking, a business license will last one year (although some locales give you the opportunity to apply for a three-year license). If you sign up for our free B.I.Z. service, we’ll automatically notify you when any licenses are coming up for renewal.

Q. If I change my legal structure, can I keep my old business license? 

A. No. Any change of legal entity (e.g. if you change from a sole proprietorship to an LLC or corporation) requires a new business license. If you change your legal structure, you will need to apply for a new business license for the new entity.

Q. Can I transfer my business license to a new owner? 

A. Typically speaking, you cannot transfer a business license from one owner to another. The new owner of the business will need to apply for their own business and specialty licenses.

Do you need help setting up a business license or have a question about another aspect of starting a business? Call the CorpNet.com team today for a free business consultation at: 888.449.2638

Image: Adobe Stock

 

 

                               

Working with your Spouse – 5 Tips to Ensure Success

There are only a few things more rewarding than working with your spouse.  However, starting a business with your life partner while remaining happy and fulfilled can be challenging.

I’ve worked very closely with my husband for over 24 years.  Here are 5 simple tips that can help you strike the right balance and succeed as both marital and business partners.

  1. Respect each other no matter what: We don’t always see eye to eye, but we always respect each other. It’s important for us both to recognize that we each bring our own unique skills, talents and strengths to the business… and to the marriage. to be clear, I do voice my own opinion; no one can ever mistake me for a pushover.  But, I also recognize that there are times when I need to trust in my partner’s discretion and judgment.
  1. Put my ego aside: Whether you’re at home or in the office, it is critical to put your ego aside and do whatever is best for the situation. No good has ever come when I let my pride rear its ugly head during a discussion with someone I love and respect.
  1. Leave business at the office; never discuss work at home:  At times, we have broken this rule.  Every time, without fail, we find our selves in an argument that could have easily been avoided had we merely waited to discuss the issue during office hours.  This simple rule helps us stay healthy and balanced both as individuals and as a couple.  Plus, the children really deserve our undivided attention when we are at home…and even “thinking” about work can be a big distraction from what should be the most rewarding part of our lives …family time.
  1. Stay unified: Whether we are with the children, our family members, or the office staff, we ALWAYS maintain a unified front…regardless of whether we actually agree or not.  Thus, it’s critical to meet regularly and ensure we are rowing the boat in the same direction and in unison.  Two is stronger than one!
  1. Prioritize date night: Date night must always be a priority.  Although we do sometimes discuss work during date night, we confine any business-related discussions to “positive” or “creative” issues at work.  We NEVER discuss money, finances, or each other’s mistakes during date night.

Starting and running a business together is not for every couple. However, if you and your partner can observe a few simple boundaries, you’ll find that running a business with your spouse will greatly draw you closer together and keep you growing in the same direction.  Plus, we ALWAYS have something to talk about.

Love makes everything possible. We have been on this exciting entrepreneurial roller coaster for the past two decades and I can’t wait to see what the next twenty years have in store for us.  I wish you the same or greater success in all of your relationships and business ventures.

Original content by Nellie Akalp on Huffington Post