Inc And B Free Slideshare

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Incorporate and be free, a quick and easy guide in 7 steps by aLpha3

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Inc And B Free Slideshare

  1. 1. Incorporate and Be Free An everyday guide to incorporating for everyone.
  2. 2. By continuing through the remainder of this primer on incorporation within the United States of America ( ) it is understood by you that this material is a starting point. If you elect to incorporate yourself please check with the relevant state’s Secretary of State department for additional information. Accordingly, it is also agreed that the responsibilities associated with incorporating lie solely on the business owner’s shoulders and therefore it is in the reader’s interest to research this topic fully before proceeding.
  3. 3. The Goal of this presentation is to offer some information relative to incorporating your business and acquiring the additional compliance numbers that will be needed to conduct business in the United States. We submit for your review, consideration and research the following 7 tiered step-by-step check list to completing this process. the aLpha3 team would like to thank you for your time and wish you success in your endeavors!
  4. 4. <ul><li>The history of companies reaches back to the Roman Empire where a group of people were associated with the formation and running of one business. </li></ul><ul><li>Originally corporations could only be established through the state. In other words the King or Parliament would need to designate your business as a corporation through a “Royal Charter” as one example. </li></ul><ul><li>With the “Joint Stock Companies Act” of 1844 in the UK, private individuals became able to establish a corporation. Before this, it was necessary to have a group of individuals involved in order to enjoy the benefits associated with the corporate veil. </li></ul>the Point!: Throughout history the primary reason to incorporate was to manage the business owner’s risk and liability. For instance, if you build a fortune and start another venture, you would want to protect your personal fortune? a little bit of history ( ) :
  5. 5. <ul><li>Protect your personal assets. As long as the “corporate veil” is intact a shareholder’s liability is limited to only the assets owned by the Corporation or LLC. </li></ul><ul><li>Create an agreement between all shareholders that explicitly details how things will operate (called the “Operating Agreement” for a corporation and a “Member Agreement” for an LLC) </li></ul><ul><li>Develop a tax strategy in line with tax law rules that best suits the business plan and your goals as an owner / entrepreneur. </li></ul>The goals of incorporating ( ) :
  6. 6. <ul><li>Limited risk and liability. </li></ul><ul><li>Clear rules ~ Accountability, how the company runs, designated levels of authority and empowerment. </li></ul><ul><li>TAX Advantages! – For an individual shareholder as well as a group of shareholders, various tax strategies may be bring benefits in line with the business plan in question and could influence the choice of incorporation type. However, depending on the State you are incorporating in, if you are a sole owner or acting as a Personal Service Corporation ... this element may have different outcomes on a case by case basis. </li></ul>The advantages of incorporating ( ) :
  7. 7. The first step is choosing a name, that is “brand-able” and different enough from other business names. From a Branding perspective, business names usually fall into one of the following categories: Descriptive : Names that describe a product benefit or function like Whole Foods or Airbus Alliteration and Rhyme : Names that are fun to stay and stick in your mind like Reese's Pieces or Dunkin Donuts Evocative: Names that evoke a relevant vivid image like Amazon or Crest Neologisms: Completely made up words like Wii or Kodak Foreign Word : Adoption of a word from another language like Volvo or Samsung Founders Names: Using the names of real people like Hewlett-Packard or Disney Geography: Many brands are named for regions and landmarks like Cisco and Fuji Film Personification: Many brands take their names from myth like Nike or from the minds of ad execs like Betty Crocker How to incorporate / organize ( ) : Step 1: Choosing a Name, page 1
  8. 8. Now that you have a list of possible names and you have taken an informal poll of your family and friends visit your state’s Secretary of State website: (in California: http:// www.sos.ca.gov / ) and find the “business entity search,” using this tool to search out businesses with similar names. This will allow you to quickly check to see if your name has already been chosen or is free for your new venture. Keep in mind, that if your submitted business name is resembles an existing business name closely your Secretary of State may decline your application at a possible cost of various application and processing fees. It pays to be very carefully and research this aspect diligently. How to incorporate / organize ( ) : Step 1: Choosing a Name, page 2
  9. 9. Now that you have selected a unique name, on your state’s Secretary of State website search for examples of “Articles of Incorporation” for Corporations or “Articles of Organization” for LLC’s and instructions / forms required to be filed Usually one can find a template of the “Articles” typically used along with specific filing instructions and associated fees. For instance in California there is a walk in fee above and beyond the incorporation fee and two separate checks need to be submitted rather then one lump sum payment. Pay close attention to the filing instructions in order to avoid re-filing your application. How to incorporate / organize ( ) : Step 2: Articles of Incorporation / Organization and Filing
  10. 10. Success! You have just received your state approved Articles and your state now regards your business as it’s own entity. Now your entity needs its’ own social security number called a Federal Employer Identification Number (FEIN) or, in short also called, an Employer Identification Number (EIN). One can apply by going to the IRS website. there is an online process, telephone process or mail-in form. Next you will also need to file your state’s equivalent of California’s “Statement of Information.” In short this form tells the government who is an owner (and in some cases how much), who the officer’s of the company are and who the main point of contact would be. Again, it is necessary to visit your Secretary of State’s website for this form and state-specific filing instructions. How to incorporate / organize ( ) : Step 3: Filing a Statement of Information / getting an EIN
  11. 11. Really Great ~ So, you have now received your endorsed Articles, your IRS issued EIN, you have diligently filed your Statement of Information and are ready to start putting people on your payroll. Right now, you may be the only employee (an army of one!), or you may be hiring various other supporters of your enterprise. Either way, your state will want to issue you their own employer ID number. Keep in mind that employee withholding as well as employer payroll taxes are collected / paid in part directly to your state. Therefore, this step will require that you contact your state’s equivalent of California’s Employee Development Department (EDD). Clearly, the existence of 50 different entities make it overwhelming to list within the confines of this presentation. However your state’s Secretary of State website will be able to direct you, thereby offering a quick and cost effective solution! How to incorporate / organize ( ) : Step 4: Getting your states employee ID number
  12. 12. Really Great ~ So, you have now received your endorsed Articles, your IRS issued EIN, you have diligently filed your Statement of Information and are ready to start putting people on your payroll. Right now, you may be the only employee (an army of one!), or you may be hiring various other supporters of your enterprise. Either way, your state will want to issue you their own employer ID number. Keep in mind that employee withholding as well as employer payroll taxes are collected / paid in part directly to your state. Therefore, this step will require that you contact your state’s equivalent of California’s Employee Development Department (EDD). Clearly, the existence of 50 different entities make it overwhelming to list within the confines of this presentation. However your state’s Secretary of State website will be able to direct you, thereby offering a quick and cost effective solution! How to incorporate / organize ( ) : Step 4: Getting your states employee ID number
  13. 13. EXCELLENT ~ You have successfully completed every requirement this far and want to start selling your “stuff.” Different states have different sales tax requirements and *if* your are selling, you may need to collect sales tax for your state. It’s a thankless job but our local government depends on these revenues and on you to collect it, accurately account for it and within the required deadline, pay it back to the state. In order to track reporting and payment, the state assigns a Re-seller’s ID number. In California, the entity charged with monitoring this activity is the Board of Equalization (BOE). Every state has their own equivalent. Again your local state’s Secretary of State website should be able to refer you to the appropriate source for filing your RE-Seller’s ID request. How to incorporate / organize ( ) : Step 5: Getting your Re-Seller’s ID Number
  14. 14. the Sub-chapter “S” election essentially transforms a corporation into a pass-through entity. This is a complicated way of saying that it eliminates double taxation. For instance, as a Corporation without this election, your business would be taxed on it’s net income at some rate. If at that point, the remainder of the profits were distributed to the shareholders, the shareholder’s would also pay taxes on those same profits. If the IRS is petitioned with a Sub-chapter “S” election and grants it, that same corporation would simply “distribute” its profits to its shareholders that would then pay taxes on that money once. Note: consult with your Accountant to determine if this is the best fit relative to your tax strategy. How to incorporate / organize ( ) : Step 6: Should you file a Sub-chapter “S” election?
  15. 15. CONGRATULATIONS! You have your official Articles, EIN, have filed your Statement of Information, have been assigned your State Employer ID and as needed have been assigned your Re-seller’s ID number. Perhaps you have elected to file a Sub chapter “s” election. You are done, your Corporation is Incorporated, your LLC is Organized. Organizationally you will want to implement processes to ensure that your company will execute on all customer commitments, operate within the requirements of the law and do so profitably. Look for our next presentations that will offer ideas for your consideration to help you build your success. Now to the task at hand making money! We at aLpha3 wish you success in your ventures and only the brightest of futures! How to incorporate / organize ( ) : Step 7: The finish line? It’s only the beginning!

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