Online Incorporation MaxBlog

Own Your Own Corporation - Why the Rich Own Their Own Companies and Everyone Else Works for Them

by Robert T. Kiyosaki (Foreword), Garrett Sutton

Summary from

Creating the right type of corporate entity for a business can create enormous advantages for the savvy business-person. In this comprehensive guide, a corporate attorney explains the history and rationale of corporations and all the considerations and decisions that go into starting one. Forming a corporation, selecting board members, administering it within the law, creating tax advantages, hiring, protecting ownership of names and corporate assets, insurance, record-keeping–every part of the process is covered. The program is a listening pleasure in spite of all the technical material and, except for not having a written guide on the package, is a perfect reference audio for the kind of audience targeted by the Rich Dad’s Advisors series. T.W

The decision to incorporate or maintain your sole proprietorship is one that should not be made lightly. There are a number of advantages to both. And, the advantages really depend on what your unique business and personal needs are.

There are four important things you should consider in your decision to incorporate or not:

• Liability. As a sole proprietor you could suffer a great personal loss if your business is ever sued. Incorporation offers a shield that protects your personal assets in the event your business is ever taken to court.
• Taxes. Corporations usually pay taxes as lower tax rates.
• Investment. Are you looking for investors? The availability of corporate stock makes winning investors easier.
• Cost of establishment and maintenance. Sole proprietorships are less expensive to maintain than corporations. Corporations must pay filing fees and annual registrations with the state.

Be wise in your decision. Get expert advice from your accountant or attorney when making this decision.

Learn more about the different types of business structures and incorporating your small business in the MaxFilings Incorporation Knowledge Center.

A business that has only one owner is termed “sole proprietorship”. The business owner is called a “sole proprietor”. A sole proprietorship is the most simple type of business entity. The requirements for forming a sole proprietorship are less. This usually involves getting a business license, permit, and complying with other state or local business regulations.

Although the structure is simple, liability of a sole proprietor can also be quite a heavyweight. A sole proprietor is “completely” liable all business debts or legal claims i.e the owner’s personal properties or assets can be taken by court order to repay claims or judgements.

As your business expands, a sole proprietor may want to add more owners. This is the time to choose to form other type of business structure. The decisions should be based on factors such as liability, taxation, and the size of the new business expansion. These new types of business structure include: corporation, LLC (limited liability company), or partnership.

More to come on types of business structure….

Obtaining an EIN or employer identification number is a good idea if you are a sole-proprietor. You can obtin your EIN when you incorporate online -  or even if you do not decide to incorporate at all.

From time to time, you’ll be asked to provide your social security number or employer ID to clients or governmental agencies. Once you do that you have no control over which client employees and others can view your number.

With identity theft an ever increasing problem, reducing the need to give out your social security number can only be a good idea.

The best way to do that is to have an employer identification number.

In fact, having an EIN is mandatory for almost any business that is set up as something other than a sole-proprietorship.

This is the IRS checklist for businesses that are required to have an Employer Identification Number.

• You have employees.
• You are set up as a corporation or partnership.
• You file tax returns for Employment, Excise, or Alcohol Tobacco and Firearms.
• You withhold taxes on income, other than wages, paid to a non-resident alien.
• You have a Keogh plan.
• You are involved in a trust. (There are some exceptions, check the IRS site).
• You are involved in one of the following types of organizations: Estates, real estate mortgage conduits, non-profits, farmer’s cooperatives, and plan administrators.

Sole-proprietors are not required to have an EIN. But if you are a sole-proprietor, I strongly recommend getting one.

The reason? If you are a sole-proprietor, clients who pay you $600 or more in the course of a year must file a 1099 on your behalf. And they need your social security number or employer identification number to do that.

And you, in turn, are required to do the same for your own sole-proprietor subcontractors who receive $600 or more in payments from you.

The Employer’s ID number fulfills IRS’s requirements when filing your 1099s, so you just substitute the EIN for the social security number.

The process is easy and straightforward.

You can apply for your EIN number online at the IRS website (www.irs.gov) or ask the IRS to have the forms sent to you.

ole-Proprietors, Protect Yourself from Identity Theft by Obtaining an EIN

Ellen Zucker has been successfully self-employed for the past 10 years. Her site, Selfemployment101.com, has articles and resources to help you, as a self-employed person, earn a living and create a life.

Article Source: http://EzineArticles.com/