/Tag:asset protection

Multiple Ventures? How to Best Structure your Multi-Brand Business

775_4297457I’m always in awe of the many talents of today’s entrepreneur…the wedding photographer who also writes children’s books, the copy editor who sells homemade soap, and the stay-at-home mom who doubles as a part-time caterer and jewelry designer. Today’s creative professionals often find themselves making income through a creative patchwork of diverse interests and talents.

Take Sue as an example. She recently called into the office with no fewer than five ventures. She has been selling children’s clothing, handbags, and craft supplies on Etsy. After a few solid years on Etsy, Sue was now ready to take the next step and launch her own websites outside of Etsy, as well as expand into handmade paper goods and home décor. Continue reading “Multiple Ventures? How to Best Structure your Multi-Brand Business” »

By | August 24th, 2012|Choosing A Business Structure|7 Comments

Asset Protection 101: What is an LLC?

257_2701929In my previous post, I spoke of the potential risks involved in real estate investment – namely, the risk that your personal assets are vulnerable should you be sued by a tenant or property guest. There are measures you can take to prevent such a scenario from playing out. 

The LLC (Limited Liability Company) is a popular asset protection vehicle for real estate investors. It essentially forms a wall that shields individual owners from personal liability. In addition to this personal liability protection, the LLC can also offer tax advantages and other benefits.

So what is an LLC? It’s a hybrid of a partnership and corporation. It’s considered to be a “Separate Legal Entity.” In fact, a properly formed and maintained LLC will have both a state-certified filing date and an IRS-issued Tax ID Number (similar to an individual’s birth date and social security number).

The following example illustrates the LLC’s liability protection. Let’s say you have XYZ LLC that holds title to a vacation rental property. A guest falls from the balcony and the court awards a multi-million dollar judgment to the plaintiff. The defendant in this case is XYZ LLC, not you. And the judgment can be collected only from XYZ LLC’s assets, and not from your own personal assets. You may end up losing your investment in the property owned by XYZ LLC, but your other properties, your savings account, and any other investments are all safe.

Setting up an LLC is a relatively easy task. You can either contact your attorney or use a legal document filing service such as CorpNet.com(R) to file the necessary forms with your state’s Secretary of State. Continue reading “Asset Protection 101: What is an LLC?” »

CorpNet.com: Helping Entrepreneurs Start New Businesses Online!

Nellie Akalp is a savvy entrepreneur, wife, and mother of four (inlcuding a newborn). As the CEO of CorpNet.com, she runs a small business that helps guide entrepreneurs and small business owners through the process of starting a business, incorporating a business, and filing business-critical legal documentation with an easy and cost-effective online service.

“With the downturn in the job market, more people are starting new businesses to take control of their own destiny and create opportunities for themselves,” says Nellie. “But the process of incorporating a business can be intimidating. A lot of people might not understand the legal requirements, or they might wonder, ‘Am I doing this right?’ CorpNet makes it easy. We take it off the ‘to-do list’ of our clients.”

If you want to start and grow a business in a way that complies with state laws and protects your personal assets, CorpNet gives free consultations to help choose the right business structure and file all the necessary paperwork. “You don’t need to hire an attorney to incorporate a business,” says Nellie. “CorpNet gives you a much less expensive way to start your business and comply with the specific requirements of whatever state you’re in.”

Nellie offers these four big reasons to incorporate your business: Continue reading “CorpNet.com: Helping Entrepreneurs Start New Businesses Online!” »

By | June 30th, 2012|Choosing A Business Structure, Starting a Business|1 Comment

Why I LOVE What I Do as CEO/Founder of CorpNet…

Last September,  I turned 40 and in about 2 months i will be celbrating my 41st birthday…which once seemed like a pretty HUGE milestone…now its just another day for me. When I turned 40 and now that I’m about to turn another year older, i don’t get sad about gorowing older, don’t dread it, and I have no attempts to forget the day. I realized I’m not just at peace with myself and my age, but I’m actually happy. And granted I have my health and a fabulous family (including a 9 month old baby girl!), but another key thing is that I absolutely LOVE what I do. And that’s a good thing, because I’ve now done it twice and wanted to share this message with you today…seemed like a great day to share!!!

Let me explain. Shortly after law school, I launched a business with my husband. We provided online legal filing services to entrepreneurs, startups, and small businesses. Basically that means we helped companies incorporate, form LLCs, and start their businesses the right way without having to pay an arm and a leg in attorney fees.

In 2005, we had the good fortune to sell that company to Intuit. We now had plenty of capital. We had the freedom to travel, spend time with our children, and dream up other business ideas. I had a great time during this interim, don’t get me wrong. But, the other ventures just didn’t carry the same spark for me. So, in 2009, we started all over again with CorpNet.com, our latest (and last?) document filing service. And every day since, I’ve been so grateful we made that decision.

First and foremost, I love helping other entrepreneurs. I love the concept of the small business. And I love giving small business owners access to resources they might not be able to afford otherwise.  Because every business, no matter how small, should have the right legal protection to help them thrive. Over the course of my career, I’ve helped form more than 100,000 corporations and LLCs across the U.S. Continue reading “Why I LOVE What I Do as CEO/Founder of CorpNet…” »

3 Steps to Creating and Protecting your Business Name

511_3606933This is a reprint of a guest post written by me that originally appeared on Mashable last year that I wanted to share it with you today.

Your business begins with a name.  It’s the cornerstone of your company identity and impacts your branding, company tone, and first impressions. Think about it. The branding of Target would be very different if the retailer still went by its original name, Dayton Dry Goods Company.

Selecting the right business name for your company is important — and it should be followed by taking the right legal steps to make sure the name is yours to use for years, and decades, to come. A prudent approach to naming entails three important steps: brainstorming, investigation and registration. Continue reading “3 Steps to Creating and Protecting your Business Name” »

Avoid the Top Five Incorporation Mistakes

 

1019_4245625Forming an LLC or incorporating a business can be a relatively quick and easy process. And it’s an undeniably critical step to protecting one’s personal assets from any liability of the company. However, while incorporating may be straightforward, small business owners often make a few common mistakes that can have a significant impact on their business. Are you guilty as well?Mistake 1: Choosing the wrong business entity

The three most common types of business structures in the U.S. are the LLC (Limited Liability Company), S Corporation, and C Corporation. Choosing the right business structure can affect the amount of taxes you pay and how much paperwork you need to deal with.

The LLC is great for small businesses that want liability protection, but prefer minimal formality and paperwork. The S Corporation is a pass-through entity for federal taxes (like the LLC) and is great for small businesses that can qualify. Lastly, the C Corporation files its own tax report and should be selected by those companies that plan to reinvest profits back into the company or seek funding from a VC. So what are some of the mistakes made when selecting a business structure?

Continue reading “Avoid the Top Five Incorporation Mistakes” »

By | June 11th, 2012|Business Checklists, Incorporating a Business|0 Comments

HOW TO: Legally Structure your Startup

775_4589486Whether you’re the next big thing in social gaming or organic knitwear, each startup eventually faces the same gnawing questions: How should I legally structure my business? Should I form an LLC or an S Corp? What about an S Corp vs. a C Corp  These questions are only natural. After all, the legal and financial ramifications are significant. And your passion might be designing iPhone apps or analyzing Twitter data, but I’m pretty confident it’s not tax law. While circumstances vary among individuals and individual businesses, here are some general guidelines to help you jump-start your decision on business structures. There are other possible business types, but I’ll focus on three: the LLC, the S Corporation, and the C Corporation. Continue reading “HOW TO: Legally Structure your Startup” »

Protecting Your Big Idea

440_3625174If you’ve ever seen a new product advertised and said, “I’ve thought of that very same thing! Why didn’t I pursue it?” you know the importance of protecting your ideas. No matter how terrific your idea is, if you don’t protect it and make it exclusively your own, someone else just might beat you to the market.

In business, ideas are often property. They are the seeds for inventions, which require knowledge, time, money and effort to create. And transforming an invention into an innovation, a new product accepted by the marketplace, takes a great deal of effort – and a bit of luck.

Every year, hundreds of thousands of inventors and innovators file for protection under U.S. patent, trademark, and copyright laws.

The three entities are defined as follows:

Patent. The exclusive right granted by a government to an inventor to manufacture, use, or sell an invention for a certain number of years.

Trademark. Any name, symbol, figure, letter, word, or mark adopted and used by a manufacturer or merchant in order to designate his or her goods and to distinguish them from those manufactured or sold by others.

Copyright. The exclusive right to make copies, license, and otherwise exploit a literary, musical, or artistic work, whether printed, audio, video, etc.

Continue reading “Protecting Your Big Idea” »

Using Trademarks to Protect Your Company Brand

308_3285698You formed your Corporation or LLC, so you’re well on your way to building a successful business. Now it’s time to protect your company name and brand, so that name will be yours to use for years to come. When it comes to your business name and trademarks, a few proactive steps can go a long way toward protecting your brand and business. Best of all, it’s easy and affordable — you just need to know where to start…

First, some basics. A trademark is a word, phrase, symbol or design (or a combination of any of these) that identifies and distinguishes the source of the goods of one party from those of others. Trademarks are managed by the U.S. Patent and Trademark Office (USPTO).

You’re not actually required by law to register a trademark. Use of a name instantly gives you common law rights as an owner, even without formal registration. However, you should consider registering your trademark for proper legal protection — after all, you’ve spent untold hours deliberating on the ideal name, and you’ll be spending even more cultivating brand recognition. Continue reading “Using Trademarks to Protect Your Company Brand” »

Top 4 Startup Mistakes When Incorporating a Business

 

775_3958571During the initial months of the year, savvy entrepreneurs rush to incorporate their businesses or form a Limited Liability Company (LLC). And with good reason, a corporation or LLC is essential to protecting one’s personal assets from any liability of the company. After all, if you’re sued as a sole proprietor or partnership, you’re sued personally – and that puts your personal savings and investments at risk.    

Incorporating a business or forming an LLC is a relatively quick and painless process. However, while it may seem straightforward, there are some common mistakes that business owners make that can have a significant impact on their business:   

1. Choosing the Wrong Business Entity

Your choice in business entities will shape the amount of taxes you pay and paperwork you contend with. It’s an important decision, one worth some research. The three most common types in the U.S. are the LLC (Limited Liability Company), S Corporation, and C Corporation. Here are a few things to keep in mind:

  • The LLC is great for startups that want the liability protection, but prefer minimal formality and paperwork.
  • The S Corporation is a pass-through entity for federal taxes (like the LLC). It should be used by startups that will make a profit soon after incorporation…and that profit will be distributed to the shareholders.
  • The C Corporation files its own tax report. It should be selected by those startups who plan to reinvest profits back into the company or seek funding from a VC.

2. Incorporating in Delaware or Nevada

Delaware and Nevada are hot states for incorporation, and for good reason. Delaware offers some of the most developed, flexible, and pro-business statutes in the country. And Nevada is increasingly becoming a popular choice for businesses due to its low filing fees, as well as the lack of state corporate income, franchise, and personal income taxes.

However, if your startup has less than five shareholders, it’s best to incorporate in the state where your business has a physical presence (i.e., where you live). Otherwise, you won’t actually reap any of the benefits, and you’ll be dealing with added hassles and costs of operating “out of state” A including: difficulties opening a business bank account, having to appoint a registered agent, and fees for operating as a ‘foreign entity’ in your own state.

3. Hiring a Lawyer to File the Forms

You don’t actually need to hire a lawyer to form an LLC or Corporation. If you’ve got a straightforward investment situation, you can use a legal document filing service to represent yourself to create a business entity. In the eyes of the law and IRS, your LLC or Corp will be just as valid than if a high-priced attorney sent in the documents for you.

4. Not Staying Compliant

Too many business owners think that their legal obligations are finished once their LLC or Corporation is formed. But, it’s critical that you keep your LLC or Corporation in compliance. If a plaintiff shows that you have not maintained your LLC/corporation to the letter of the law, he or she can seek recovery against your personal assets. In short, the corporation’s shield that protects your personal assets is pierced.

So, how do you make sure your corporation stays compliant? Keep your personal funds separate from those of the business (no commingling: this means keeping a separate bank account and credit card). Remember to send in your Annual Statement/Annual Report (if required by your state). And obviously, do not engage in any form of fraud.

By avoiding these common missteps, you can better protect your personal assets and minimize your personal liability; Of course, the biggest mistake of all is never forming an LLC or Corporation. So even if you’re putting 80-hour weeks to find new clients or launch a new website, make some time this year to incorporate. By getting your legal ducks in a row early on, you’ll be able to scale far more smoothly in years to come.

CorpNet.com can help right from the beginning, with a Starting a Business Checklist that lists everything you need to know in order to get your company up and running. Our Free Corporate Name Search lets you be sure that the name you’ve chosen for your company is available, and we can help you to reserve the name for your own use.  CorpNet.com’s Free Incorporation Guide or Free LLC Guide to get all the details about the distinctions between the two structures. You’ll learn that overall, an LLC is the less formal entity. Of course, details may vary based on your specific circumstances, so take some time to educate yourself on these two business structures.

CorpNet.com can provide filing services in all 50 states. Our staff is professional, courteous and reliable, and all services are fully guaranteed.

Contact CorpNet.com today, and cross all of those business filings right off your list.

We look forward to incorporating your business for you and getting your business off the ground!

Good luck!

A portion of this original content by Nellie Akalp was written and published on StartUpNation.com.

 Image: PhotoSpin