Online Incorporation MaxBlog

Have an idea for a business but unable to secure the needed financing? The threshold for borrowing from banks has gotten tighter in recent months. And, it’s best to avoid high-interest options like credit cards and predatory lending.

Micro-lending is an option available to moderate and low income entrepreneurs. Funds from micro-loans can be used for a wide range of startup and operating costs like purchasing equipment, marketing, licensing fees and insurance to name a few.

Micro-loans through the U.S. Small Business Administration (SBA) average around $13,000 while the maximum you can borrow is $35,000. Repayment takes no more than six years and interest rates vary depending on the intermediary lender but generally are between 8 and 13 percent.

All credit decisions are made by an intermediary at the local level. If you’re interested in applying for a microloan, contact your local SBA microloan intermediary.

Accion USA is a non-profit, private sector source for microloans…they provide loans from $500 to $50,000 to business startups and small businesses. The average loan is $5500. They work one-on-one with you to help build a solid credit history and get your venture off the ground.

Kiva.org is an organization where individuals can donate small amounts (i.e. $25-$50) and see who it’s going to and how they’re using it. Choose an entrepreneur in either the U.S. or the third world to support – you can receive updates as to how they’re using the funds, their progress and even repayment.

After obtaining a micro-loan to get you started, online incorporation service MaxFIlings.com can help you form a corporation easily for minimal cost.

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.

It’s not as intimidating as it may sound – when incorporating a small business online, the article of incorporation establishes the existence of your corporation in the particular state you are in and reveals identifying information and basic operating characteristics about your company.

Articles of Incorporation are typically filed with the Secretary of State’s office (or whichever agency handles business registration) in the particular state you are incorporating in.

It’s pretty easy to write one yourself, or a business attorney can easily prepare one for you…at a minimum, they must include:

• Name and address of corporation or primary location of business
• Corporate purpose (usually stated in broad language, like a mission statement)
• Name and address of Registered Agent
• Stock information – number, designation and value of any stock shares you are issuing or plan to        issue

Many states provide templates so incorporators can easily create their own articles – here’s an example of articles of incorporation courtesy of the Illinois Secretary of State – many other states have templates so simply refer to their Secretary of State’s website

Online incorporation service MaxFilings.com provides full services for incorporating a small business online – including the Articles of Incorporation. Form your incorporation in just a short time, or save your information and return later.

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.

If you’re incorporating a business online, you must decide which corporate structure works best for you company – both in terms of taxes and regulations.

Of course, deciding that requires the advice of an attorney who can review your business and see which one would work best. For a corporation, there are two types, a C corporation and a S corporation.

The main difference between the two is how they are taxed. A C corporation is the basic one, while a S corporation is simply a C corporation that has elected special tax provisions available to them under certain criteria.

C corporations and their shareholders have to contend with what’s known as “double-taxation”. The business files corporate income tax returns and pays income taxes. Shareholders do not report corporate income on their personal returns – but, they report and dividends or income they receive from the corporation, hence, double-taxation.

In a S corporation, if all shareholders agree to it, does not file income tax returns. Rather, income is “passed-through” to the shareholders and they claim a proportion of the corporation’s income relative to the proportion of ownership they have in the company. So for example, if an shareholder owns 20% of the company’s stock, they claim 20% of the income on their tax returns.

There are other minor differences between C and S corporations. For instance, a S corporation is limited to 100 shareholders and there are certain types of businesses they cannot engage in.

For a more detailed overview of the differences, visit “Differences Between C Corporations and S Corporations” in the online incorporation Knowledge Center at MaxFilings.com.

Easily form your corporation online in just minutes – or get started and return later to complete the process.

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.

Ever browse through online incorporation articles and blogs and get confused by all of the terms they use? Maintaining focus on your business is difficult enough so having to decipher what a particular word means can be a major headache.

This is one of the main reasons why MaxFilings maintains a handy list of business incorporation terms. In addition to providing online incorporation services across the nation, the business terms list provides concise explanation of many common phrases such as apostille, liquidity, quorum, and so on.

The glossary of business terms is a small but very helpful part of the Knowledge Center at MaxFilings, an extensive resource for small business incorporation.

So the next time you want to briefly know what “pass-through taxation” means, use the glossary of business terms as your first source!

The ability to raise capital is an important issue that you must consider as an entrepreneur. In fact, the decision of which type of entity to form when incorporating your business can be determined by this point alone in some cases. It is also vitally important to consider your cash flow needs to start out so you are able to grow your business later on.

There are basically two types of financing, debt and equity.

Debt financing is where you borrow money to be repaid over a period of time with interest. Full repayment is required within1 year or less for a short-term note and more than a year for long-term debt. Also, the lender does not gain any ownership in the company but may require a personal guarantee for the loan, especially for small businesses.

Equity financing is described as an exchange of money for ownership in the company, usually though common stock. This type of financing basically allows you to raise capital without incurring debt. The inherent disadvantage however is that by issuing stock in the company, your ownership interest is diluted and loss of control is possible.

When it comes time to incorporate your business , you’ll need to consider the different characteristics regarding raising capital associated with each type of business entity. The main point of difference is whether stock can be issued to the general public or not. Online incorporation services at MaxFilings provide an easy way to incorporate your business once you choose the type of entity you will be forming.

Only a C or S corporation can issue stock to the general public. Stocks can make it easier to raise investment capital and transfer ownership, and the ability to offer stock options can assist the company in recruiting and retaining good talent. All stock issued is subject to various state and federal securities laws.

A Limited Liability Company (LLC) cannot issue common stock to the general public, but the benefit of raising capital is replaced by the relative simplicity and ease of operating an LLC. Capital is generally raised through the companies’ partners and debt financing.

Both corporations and LLCs, however, must maintain the ratio between debt and equity financing at an acceptable rate. Too much or too little of each may make it more difficult to attract investors and obtain debt financing from a lender, who may question the ability of the note to be paid back.

In the end, this decision cannot be made lightly and must involve the counsel of an attorney and accountant. However, the two main points to consider in regard to raising capital boils down to growth needs of the company and the administrative requirements of a C corporation , S corporation , or LLC .

Determining the best corporate status for your business has many considerations. When thinking about self-employment taxes however, forming an S corporation offers a clear-cut benefit over forming an LLC. This tax applies for such things as Social Security and Medicare, much like the payroll tax deducted from ones paycheck.

In an S Corporation, an individual shareholder only pays tax on salaries and bonuses they receive from the company. On the other hand, a shareholder in an LLC pays on both salaries/bonuses and their share of profit in the company, which can amount to more than 15% of taxable income.

“Can S Corporation Status Reduce Self-Employment Taxes?” in MaxFilings’ Knowledge Center addresses this issue and raises other important considerations you must be aware of.