Business Entity Overview

CCH has a good overview over the business entities available to the business owner.  Be mindful, though, that choice of entity is influenced by your state laws.  For example, the overview states that corporations are usually cheaper to form than LLCs.  This is not true in New York. Usual price tag for forming a limited liability company in New York (City): $1300, excluding legal...

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Must Read for hungry Startup Entrepreneurs: How not to Hand out Equity

Learn how a young startup died an early unnecessary death due to a faulty capital structure in "A Fatal Paper Cut." Great post, but IMHO, bad title.  Had I not found it through Ask The VC, I would have never read the post based on the title.

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Don’t sweat your B Plan

Don’t think you are doomed to failure, if you neglect to craft the perfect business plan.  Apparently, appearance and credibility is more important than a business plan, as reported by this research report: "The researchers also found that whether or not an entrepreneur had created a business plan for their start-up venture had no bearing on the success of that venture. Newberg...

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Do I need a Federal ID Number for My Sole Member LLC?

No, for federal income tax purposes a sole member LLC is normally considered a "disregarded entity."  Unless you hire employees, you can use your social security number for all purposes. However, for security reasons, you may want to get Federal Tax Identification Number (also known as Employer Identification Number or Employer ID Number) in order to reduce the number of people...

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How to save Taxes with an S Corporation

One of the main reasons for choosing an S corporation over a limited liability company is the possibility to save self-employment taxes.  Members of an LLC have to pay 15.3% self-employment tax on their share of the LLC’s income (for the first $94,200).  Shareholders of an S corporation can split the S corporation’s earnings into salary and distribution of dividends. ...

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Registering a Small Business

I get this search term a lot:  "Registering a Small Business."  People seem to think that they need to register something somewhere in order to conduct business.  Well, yes and no.  You can start doing business under your own name by just by doing it.  You are considered a sole proprietor running a sole proprietorship.  No registration required anywhere to...

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LLCs and Corporations – What’s the Difference?

The New Jersey Law Blog sheds light on the differences between limited liability companies, S corporations and just plain old corporations (i.e. C corporations) and the reasons why corporations are still the entity of choice in some situations.  What they have to say is just as true for New York businesses: Several LLC limitations have resulted in the continued viability of the ā€œSā€...

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An Analysis of The United States Small Business Administration

Al Berrios has an interesting take on the Small Business Administration and its various ways of support for small businesses.  Read his analysis here.  Also check out his many articles on entrepreneurship, organization and management on his company’s (Al Berrios & co.) website.

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Divorcing an LLC – or – Why an Operating Agreement can be Priceless

Divorcing from your business partners in a limited liability company can be just as nerve-racking, costly and life/business interrupting as divorcing your spouse.  What is worse, if you failed to plan for an exit strategy in an operating agreement, you could be unsuccessful and be stuck with the LLC for good. Peter Mahler, a partner at Farrel Fritz, published an article in the New York Law...

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Cheap Web Incorporations

California business attorney Nina Yablok put an incorporation service to the test and has good reasons for not recommending their services to startup businesses:  corporate services – almost a scam.  Another almost scam on new businesses in New York by web incorporation services:  Talking them into a registered agent for an annual fee.  New York does not require you to...

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