Small Biz set-up

[wealthpn]

I wold love to know members experience with choosing what form to inc. in, especially, in NC. Also, any other tips on the nuts and bolts of setting up a small biz.
See you all at NAMS 8.

[KellyMcCausey]

Last year I interviewed Nellie Akalp about incorporation options for home based business owners, she has some quick resources available here for no optin: http://www.corpnet.com/corpnetnellie/

I haven't personally incorporated yet... I think about it every year though. (Procrastination)

[ChristineCobb]

Your best course is to visit with a CPA in your area. There are benefits and trade-offs for choosing a business type and will depend on your individual tax situation. If you do nothing, you are choosing to be a sole practitioner and will report your business income and expenses on Schedule C of your Form 1040. Your positive net income after expenses will be subject to self-employment tax which is basically the same as an employee's plus an employer's social security/medicare tax. If however, you show a loss after expenses, you can deduct those against your other income.

Other types like C corporations, S corporations, LLCs, etc. will have other rules and other federal and state tax forms. A CPA will be able to clearly explain your options and how they will affect you personally.

[wealthpn]

Thanks for your suggestions and the link.

[LynetteChandler]

Hi! I'm in NC too. I'd definitely consult with a CPA as far as corporate taxes and structuring goes to save your corporation money etc. That's for the broad picture stuff.

As fas as incorporating, I didn't start off that way just a sole proprietorship for years but due to some issues (long story) and the fact sole proprietorships pay the most taxes, I converted to an LLC a few years ago and chose to be LLC taxed as a C Corp.

The process of filing is pretty straightforward it's just that in NC you pay a boat load for it and pay every year (but let's not get me started on that :) )

I went to the NC Secretary of state to download the form for the Corp I wanted to form
http://www.secretary.state.nc.us/corporations/Forms.aspx

After making sure the name I wanted is not taken - using the search here I just tried to pull up those with the exact same name I wanted or similar to make sure
http://www.secretary.state.nc.us/corporations/CSearch.aspx

Then I completed the form, sent in the money with the articles of organization form.

Once processed, they sent me an official letter with my Corp ID (which is also public record and can be searched on the SOS site online).

From there on, I just have to file an annual report with $200 every year. That can be done online.

Oh yeah before starting all that, I also went to the IRS to create a new Tax ID because my old Tax ID cannot be transferred. Upon cleaning that up, I used all the information to open up a bank account in the corporation's name.

The process is not difficult just a lot of steps. I think the most difficult part really is deciding what corp you want to go with. Each has its own benefits and down sides. That only you and your financial advisor can decide.