Online Incorporation MaxBlog

One question that may come to mind for businesses wanting to incorporate is how many “founders” they should have. By “founders”, we mean individuals who have collaborated together to establish a new company.

It really depends on how you structure it as to whether there should be one or two founders or five or more as expressed in the video below.

Simply having several people who come together and say – “We want to start a company that will be successful in the future” – isn’t enough. In this case, having more than one or two founders could be huge mistake. Progress will be elusive and chances are, the venture won’t succeed.

On the other hand though, if each person has their own area of responsibility like one in charge of marketing, another in charge of development and another in charge of fundraising for example, several founders for a company could be a plus.

Watch this quick interview of venture capitalist David Hornik for more. And if you’re ready to incorporate a business, turn to the online incorporation experts at MaxFilings to quick and reliable service.

Once you easily form a LLC online with MaxFilings.com, you need to develop a formal written operating agreement between each of the partners in the company. Even if you’re a one man show, an operating agreement helps codify your limited liability.

But especially in multi-partner firms, the operating agreement can help reduce or eliminate future misunderstandings and disputes by pre-addressing management and money issues.

Corporations have specific rules from the state of incorporation – limited liability companies on the other hand have much more flexibility in their management, etc. This is why an operating agreement is important, even if your state doesn’t require you have one.

So what should I include in my LLC operating agreement? Some of the issues an operating agreement should address include:

• Ownership percentages
• Management
• Voting
• Allocation of profits and losses
• Distributions
• Rights and responsibilities of LLC members
• Ownership changes
• Amendments and dissolution

These are just a few of the general things your LLC operating agreement needs to address. We invite you to read the article LLC Operating Agreement – What Should Be Included in MaxFilings’ online incorporation knowledge center to learn more.

Starting a business in the current economic climate may defy logic. Why would I be crazy enough to give up my secure job to take the entrepreneurial plunge right now?

Experts will tell you that a recession is one of the best times to start a business – several well-known successful companies today got their start during major economic turmoil in the U.S.  These companies succeeded because they found a niche market that wasn’t being filled by anyone else. Identifying a market need is vital for any business startup, regardless of the economic climate.

But risks of failure are greater in a recession so you need to keep expenses as low as possible. Businesses that start and survive a recession though are in a unique position to profit and benefit from the inevitable economic upturn. But if you wait to form a corporation until after the recession, you will be that much more behind.

Keep startup costs low by:

1.    Keeping you day job – If you’re fortunate enough to still be employed, start your business during your free time. You will still have steady income from your day job which allows you to focus on making your business profitable with less risk.

2.    Not buying, leasing or renting office space – Launch your business from a simple home office to save on this expense. Many ventures can be easily managed from the home, eliminating the need to spend money on office space.

3.    Not hiring employees – If you need help from others, consider hiring them as contractors rather than  employees.

4.    Advertising by word-of-mouth – There are many ways to advertise your products and services without spending money. If you can’t sell it yourself, no one can.

There are many recession proof industries you can launch a successful business in. These include:

•    Food
•    Healthcare (including psychology and substance abuse)
•    Computers and IT – people tend to fix broken machines rather than buying new ones during a recession
•    Security
•    Education services (many people go back to school in hard economic times)
•    International business – the economy in other countries may be better

One challenge to starting a business is finding your niche – something that distinguishes you from other related things currently available. One of the best ways to find your niche is to create a business that offers something you needed but couldn’t find.

Read this article from Entrepreneur.com for more insights. And when you’re ready to launch your business, turn to the online incorporation experts at MaxFIlings.com to form a corporation online easily in just minutes.

Many of the entrepreneur guides today recommend forming an advisory board…but a surprising number of entrepreneurs ignore this advice according to an interesting article by Mary Sullivan at the First Year blog.

It’s hard to know why entrepreneurs ignore this advice – perhaps they don’t understand the role of an advisory board or think they can find everything online. While there’s a lot of useful information on the Internet, nothing takes the place of advice specific to your situation.

At a minimum, an advisory board should include a legal and financial/tax advisor and any other area you lack the necessary experience to make your business run.

After incorporating online, you’re not likely going to have a large management team in place so a group of people to float ideas with and get their perspective. It’s best to meet as a group, usually each month.

In addition to advice, your advisors will pass your name along to their friends and business associates, giving you support at a critical time.

Read Mary’s article for more tips on forming an advisory board…and once you are ready to form a corporation, take care of it easily online in as short as 10 minutes at MaxFilings.com.

Looking for some simple explanation of federal small business taxes? Click over to the online incorporation knowledge center at MaxFilings.com for an overview of the next most certain thing in life next to death.

Federal taxes a small business may be subject to depend a lot on its structure (i.e. C corporation, S corporation, LLC, etc.) along with many other factors.

Four different types of taxes a small business could be exposed to include

1. Income taxes – required for all individuals and businesses (except partnerships, who file an informational return).
2. Self-Employment taxes – primarily affects the self-employed
3. Employment taxes – small businesses with employees
4. Excise taxes – required depending on various conditions, usually for businesses who manufacture certain things or are in a certain industry.

Read Four Types of Federal Taxes Small Businesses Should Know About – And Where to Find Information from the IRS today in the business incorporation knowledge center at MaxFilings.com for more insight and links to further information about this complex subject.

When forming a corporation, you want to have all the knowledge you can to make the right decisions…but finding the right ones that will be helpful can be very time consuming.

An article in Entrepreneur Magazine’s April, 2009 issues – Best Resources for Startups – lists 4 resources every aspiring entrepreneur, and even those who are well established, should be familiar with.

1. SCORE – A nonprofit organization with over 400 chapters that provides free mentoring online and in-person. Consists of nearly 12,000 working and retired entrepreneurs and business people.

2. Small Business Development Centers – Located across the country and usually connected to a university, these organizations provide consulting for just about any facet of managing a small business.

3. Small Business Administration – Federal government agency that provides an array tools to help new and aspiring entrepreneurs succeed. It’s recommended you start with their Start-up Assessment Tool to help find the right resources.

4. U.S. Chamber of Commerce Small Business Center – An arm of the U.S. Chamber of Commerce that provides comprehensive assistance for startups through web-based tools and resources.

These are just a few of the many resources out there…but, they’re most likely the most reliable for accuracy and impartiality.

In addition to these, online incorporation service MaxFilings.com has an expansive online incorporation knowledge center that has many helpful articles that make sense of incorporating a business– check it out and then use MaxFilings’ online system and form your corporation in just minutes.

Last Friday, President Obama extolled that there are “glimmers of hope” in the U.S. economy for recovery, which has been experiencing the deepest recession in a generation.

Dennis Romero over at the Entrepreneur.com Daily Dose blog has a great summary of the president’s remarks at the White House.

Since March, the Small Business Administration’s popular small business loan program has expanded by 20% when the administration announced stronger loan guarantees for credit administered through the SBA.

The President commented to reporters at the White House, “We feel very good about the progress that we’re making in unlocking lending in some particular markets, for example the small business area.”

He went on to say regarding the 20% increase in small business lending, “And what that means is that small businesses are starting to get money that allows them to keep their doors open, make payroll, and that is going to contribute to our overall economic growth, as well as help make sure that people are able to keep their jobs.

Additionally, home refinancing has shown signs of improvement, which is helping stabilize the sector of the economy that’s at the heart of the recession.

In light of this, now may be the time to incorporate online – check out our post from last October detailing Reasons to Consider Starting a Small Business in a Recession.

Every business owner chooses the business entity they operate under.

Most small businesses just start out, making sales, profits and etc. as a proprietorship. However, they can be held personally liable in these situations so simply selecting your business entity this way is unwise.

So which is best? A Limited Liability Company (LLC), C corporation, S corporation or partnership? We can’t answer that here, but you can find questions you should consider when evaluating your options in “Choosing a Business Entity – Some Questions to Consider” in the online incorporation Knowledge Center.

You will address questions about yourself, your business, the cost of starting the business and where you are seeking funding. For instance, if you will have outside investors, a corporation may be the way to go.

With these questions, you can review a Basic Comparison of Business Entities for a quick comparison of each entity’s characteristics along with the more in-depth Overview of Business Entities.

Of course, when you are ready to incorporate your business online, MaxFilings is here to help you navigate the legal requirements in all 50 states.

In the past, many of those needing to incorporate a company fast could purchase a shelf company, or a previously formed corporation or LLC that is in existence already.

A shelf company still provides some advantages even though online incorporation services like MaxFilings make it easy to quickly form a corporation or LLC online.

If you wish to acquire a company with some age, shelf companies that have existed for many years can be found. They may also have established bank accounts, federal tax identification numbers and tax returns. However, the older the company and the more it offers, the higher the price.

While there are some advantages, buying a shelf company is initially more costly and troublesome than simply forming a new corporation or LLC online. A shelf company requires some house cleaning tasks, such as transfer of ownership of shares, replacing directors and members and changing the business name.

If you are interested in buying a shelf company, you should consult with a qualified professional to ensure you are properly weighing the pros and cons.

Form your corporation or LLC online easily at MaxFilings.

The idea of starting your business during these uncertain economic times may be a non starter for most. You shouldn’t let bad economic times deter you from making that leap, especially if you have a stellar idea. Now may be the best time to incorporate or form an LLC online according to Heleigh Bostwick for the following reasons.

First is the idea, which can be difficult during a recession. One way to consider this is do you have an idea that answers needs for people during an economic downturn? Everyone is looking for ways to get the most of their hard-earned dollars, especially these days. A business that can help folks in that effort would be very valuable.

The next criterion is credit, which is tightening due to the ongoing financial crisis in the U.S. Nevertheless, having low or no balances on your credit cards and an excellent credit rating can be a tremendous plus, allowing you to negotiate good terms for loans and business credit cards.

Continuing on the credit theme, possessing good negotiating skills is a must have in this environment, and even more critical if your credit is less than perfect. Being a good negotiator and providing the bank with a strong marketing plan can be a big help in obtaining favorable loan terms.

Beyond the idea for your small business and financing, managing money is very important. Getting by on a shoestring budget is good practice anyway but a big plus when incorporating a business. And being disciplined and avoiding impulsive decisions is especially important in this current environment.

In the final analysis, if you’re ready to incorporate your business, don’t let the recession stop you. Many of today’s successful companies such as Hewlett-Packard (1934) and Adobe Systems (1982) got their start during major economic hardship in the U.S.