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Why you should incorporate a business
I always get asked "Should I register as a business?" and it's not as difficult as people think. I have a feeling that people think it's super difficult because it's semi technical and no one really talks about it. Loads of people are selling something online from little trinkets they make at home like jewelry to bigger items like furniture. If you're making more than $600 a year off of these items you're selling then you should look into incorporating a business to protect yourself and your venture. Keeping your business and personal life separate is best in the long run so you should start now.
Why you should think about incorporating a business
Incorporating a business is the next step after you have an idea and a plan of action, if you don't have these then there is no reason to incorporate. If you're already selling something online you'll want to be seen as more professional so incorporating is a great thing for branding your items. Filing your articles of incorporation will give you a line of defense when it comes to your personal and business life.
How much does it cost to Incorporate?
- Incorporating a business keeps your personal and private funds separate.
- Having your own business lets you sell as a brand and not a person.
- If you plan on selling your systems or products, having a company will make it easier than a sole proprietor.
Incorporating isn't as painful to your bank account as you would think. If you're already making money selling your product or offering your services, then you can easily incorporate with a weeks worth of payments or less. Generally it cost between $80 and $200 depending on which state you live in. If you want to trademark your business name then that's where the real money comes into play. I don't remember the exact figure, but I think a cheap trademark is around $350 a piece.
How long does it take to incorporate a business?
Incorporating a business doesn't take long, but it's definitely not an overnight type of thing. It took me and my business partner around 3 weeks to get everything in order and then open a business bank account. It's not a super long time, but if you need it done overnight then you're going to be pretty sad because that's just not how it works.
C Corp [Vs] S Corp - Which should I choose?
Choosing which type of corporation really depends on the amount of shareholders you plan on having. If you're going to be under 100 shareholders, which most of us will be, then you'll want to go with an S Corp. If you have a huge amount of funding and you have more than 100 shareholders, you'll want to be looking into a C Corp.
In conclusion, it's not as scary to incorporate a business as you may think. It's a fairly simple process that takes a little bit of time and some up front payments to get everything going. Choosing the type of corporation you want isn't that difficult, just do some research and you'll easily be able to figure out which one fits your plan best.
Hopefully this helped out some people
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