Incorporation?

Question

I need to get incorporated to start my own company online...I checked websites, but I still don't know if I should be a S, C corp or LLC. I also noticed that it was very expensive..is there any way for me to get incorp at a reasonable cost?

Answer 1

Hi quizzed,

You probably would be better as a LLC corporation. It is easier and less complicated then an S or C corporation.

You can do it yourself. What you need to do is avoid the 50,000 people who want to do it for you and charge you a ton of money. Don't search on Incorporating or something like that. Instead find your States site.

I don't know what state you live in but find your states site and search for corporations. For Example here is my state of Tennessee's site. http://www.tennesseeanytime.org/business.html

I incorporated years ago & it only cost me $25. I did all the paperwork myself.

Good Luck,

Norm

Answer 2

Hey Quizzed- Here's the thumbnail sketch about corporations. You incorporate or file to create an LLC with a state. If you incorporate you are the equivalent to Exxon or Microsoft and will pay federal and state corporate income tax. If you file form 2553 with the IRS you are making a tax election to file as an S corp, not pay any corp taxes, but will pick up all the profit on your personal return. In almost every case, electing to be an S corp is the best solution to minimize tax. If you file to create an LLC, you should still file the S election for the LLC.
As to cost - it cost about $500 for the entire process. This is really an insurance cost because the corp/LLC will protect your personal assetes in the event of liability issues at the corp level. If you think it's expensive you either need more money before you get started or you should reconsider whether or not you are ready to start your own business - especially on line. You should do some homework as to the marketing cost of driving traffic to a website. Now that's expensive. Or the on going cost for the IT person to modify or better your website, or the $250/hour charge by the attorney to create/review documents, on and on.

You should read Winning in Biz it's all very clearly explained. And please don't tell me that 30 bucks is too much to pay for a book.

Answer 3

That's not true, you don't have to incorporate. Go ahead and register the website under your own name and start doing business. Keep proof of every dollar you spend, or receive. After you make your first $1,000 in sales, go see an accountant and a lawyer. Until you have some actual income to report, incorporating is a very silly and expensive exercise. Even after you have income, your accountant might advise you to stay unincorporated, although, your lawyer will never agree. If you are concerned about liability (e.g. getting sued by an unhappy customer), get business liability insurance - incorporating is a poor substitute for that.