Starting a business can be an exciting and rewarding experience, but it comes with a lot of challenges. One of the most crucial steps in starting a business is choosing the right type of business entity. As an accounting firm, THE ACCOUNTANTS can assist you in understanding the various types of business formations available to help you make the best decision for your business.
LLC: A Limited Liability Company (LLC) is a popular business structure because it offers liability protection for business owners while maintaining a flexible management structure.
CORPORATION: A corporation is a legal entity that is separate from its owners. It offers limited liability protection to its shareholders and allows for multiple classes of stock.
NONPROFIT: A nonprofit business is established to support a social cause and provide public benefits. Nonprofits qualify for tax-exemption status by the IRS.
DOING BUSINESS AS: A Doing Business As (DBA) is a fictitious name used by a business that is different from the owner’s legal name.
ENTITY NAME RESERVATION: Entity name reservation is the first step in registering a business. It is essential to have a successfully reserved company name to proceed with further steps.
FEDERAL TAX ID (EIN): An Employer Identification Number (EIN) is a federal tax identification number used to identify a business entity for tax purposes.
STATE TAX ID: A state tax ID is an identification number that is similar to a personal social security number. It is used for tax purposes at the state level.
BUSINESS LICENSES: A business license is a permit that allows a business to operate in a specific location. It is issued by a state or local government.
SELLER’S PERMIT: A seller’s permit is required for businesses that sell goods or services and collect sales tax from customers.
SOLE PROPRIETORSHIP: A sole proprietorship is a business owned and operated by one person. The owner is personally liable for all business debts and obligations.
501(C)(3) APPLICATION: 501(c)(3) Tax-Exempt Status is designed to help prospective charities apply for tax exemption under the tax law.
STAYING COMPLIANT: Compliance certification is essential for organizations committed to meeting and continuing to fulfill best practices, standards, and regulations.
REGISTERED AGENT SERVICES: A registered agent provides a legal address within the jurisdiction where legal documents may be served during business hours.
ANNUAL REPORTS: An annual report is a detailed report on a company’s activities throughout the preceding year.
COMPLIANCE CALENDAR: A compliance calendar centralizes and tracks essential dates and deadlines related to critical regulations, permits, accreditations, and reporting obligations.
Navigating the different business formations can be overwhelming, but with the help of THE ACCOUNTANTS, you can be confident in making the right choice for your business. We can assist you in understanding the pros and cons of each formation, providing guidance on compliance, and ensuring that you are set up for success from the start. With our expertise, we can help you establish a solid foundation for your business and ensure that you remain compliant with all state and federal regulations.