If you spend the time and expense to incorporate your small business, then you should make sure you observe the corporate formalities. There are many reasons for observing corporate formalities. The most important reason is that if you don’t, you are leaving yourself open to someone trying to “pierce the corporate veil”—getting at your personal assets for the liabilities of the corporation. This blog describes the corporate formalities for a small business.
Careful when electing LLC taxed as S Corp. Your startup business is organized as a LLC and you have consulted with your small business lawyer and tax adviser about whether you should elect to be taxed as a S corporation. Your startup lawyer has filed the papers to organize your LLC in Washington DC or elsewhere. You decided to make the S corp election to save self-employment taxes—a good reason for many small business owners. All is good and well, except that there are looming traps for the unwary. When you talk with your tax adviser or your startup attorney, you want to come prepared and understand that the S corp election may pose some financial risks for you. This article describes some of the looming risks for those business owners who have elected for their LLC to be taxed as a S corp. This article is not meant to provide tax or legal advice, rather to highlight some of the issues that you as the small business owner may face and will want to make an informed decision with you small business attorney or tax adviser. This article was not intended to provide an exhaustive list of differences between taxation of a partnership and taxation of a S corporation. Rather, this article was intended to highlight some of the differences. You may have a good idea of your exit strategy for your new business. If you think that you will be able to take it public in a few years, or that you will stand to benefit for minimizing self-employment taxes, then there may be good reason to make the election to be taxed as a corporation. This article intended to point out some of the countervailing considerations and you should discuss your particular needs with your small business attorney and tax adviser.
You have designed an innovative product or developed a groundbreaking service that will change the face of your industry. You have written a business plan and just maybe you have gotten some of your friends or family to agree to invest in your new venture. You are exuding confidence that you are going to start reeling in the customers just as soon as you can open your doors for business. You are ready to start your business, but you are faced with numerous implementation challenges. This blog post provides a checklist for starting a business. You will need to address each of these issues for your startup. At first, this checklist for starting a business may seem daunting, but if you take each issue in hand and work through your contacts and business associates, you may be able to resolve these issues more quickly. What you really want to do for your startup is to develop the many systems that will support your new business so that you have time and energy to focus on growing the business. I am going to mention each of these questions but not in any particular order of priority. You need to start making a list and attacking each of these implementation questions one at a time.
After reading the Rosten Law blog on choosing a name for your small business, a reader asked what a small business owner should do if he or she is no longer satisfied with the name already chosen and registered. From a legal standpoint, you have some options. From a business perspective, changing the name of your small business can be a hassle. The real challenge is going around and informing vendors, customers, banks, and business associates that you have changed the name of your business and that you want them to switch over the name of the business on their internal records to a new name. If you thought that it was an issue getting your vendors and clients to change your address after a move, wait until you send around a request for them to start calling your business something different! Nonetheless, you have decided that you must change the name of your small business. You should first review the considerations that we enumerated in our blog on how to choose a name for your business. The legal aspects of changing the name of your small business are relatively straightforward. You have at least three choices.
- Published in Business formation and startups
This blog post is devoted to the topic of choosing a name for your new company or organization. I have been in business myself and chosen names or helped to choose names for startup companies and new nonprofits. Naming a company is always the first challenge or dilemma for a new business or nonprofit. Some organizations can afford to pay the big bucks to come up with a name by employing focus groups or pollsters. If you are a startup, it is not likely that you will have the money to retain the services of a consultant just to come up with a name for your company. Take your time in choosing a name for your company. The name that you choose for your organization is going to follow you for a long time. Of course, you can change the name for your startup. But why not prevent the hassle or confusion and choose a name now that will suit your company or organization for years to come. There are some things that you may want to consider as you are thinking about a good name for your business. As you read this blog post, think about what you want for a name in your startup. Do you want the name to sound good? Do you want it to be descriptive? Do you want to identify your startup with some place or person? Is the name easy to sound out or spell? Here are some general guidelines that you may want to consider.
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