What Are the Dangers of Incorporating? Weighing the Pros and Cons

  • Are the dangers of incorporating your business a gamble or a surefire bet? As a business owner, you’ve probably wondered if the risks of incorporating your business outweigh the advantages. The truth is that every small business has a different situation. You should weigh the pros and cons of incorporating to determine if it will benefit your business for the long run. Let’s start with a few of the pros: You’ll Probably Pay Less in Taxes The government taxes individuals…

    How to Incorporate Your Business: What You Should Know

  • Do you know how to incorporate your business? How to incorporate your business, that is the question. If you are in the process of starting a business, it’s an important question, and it’s one you need the right answer to before you get to work. Incorporating your business will help you protect your personal assets from any legal action that your business might face. It also sets you apart and can help boost customer and vendor perception of your business…

    The Five Most Effective Tips for Incorporating in California

  • Are you incorporating in California? If so discover how to do it in the fastest, most efficient way possible. Incorporating in CA doesn’t have to be a long, complicated process. Keep reading for the tips that can help you get set up quickly and efficiently. Once your new business is off the ground, you are free to focus on developing your products and services. Get to Know Your CA Incorporation Choices There are various incorporation options from which to choose.…
    mistakes when incorporating

    How to Avoid These 4 Costly Mistakes When Incorporating

  • You want to steer clear of mistakes when incorporating. We’ve got your back with four errors to know and avoid. Taking that bold leap into the future is exciting, but are you making mistakes when incorporating your business? It pays to know the biggest errors businesses make so you can avoid them yourself, and prevent that great leap forward from becoming a great big mess instead. #1: Choosing the Wrong Business Structure Any business has many structures from which to…
    Incorporate Your Business

    Is there a Right Way and a Wrong Way to Incorporate Your Business?  

  • Ready to incorporate your business? Whatever you do, don’t do this! There are several ways to organize your business the wrong way. What should you avoid? Read on to find out. Are you considering incorporation for your business? It can be the best protection you have for your business if you do it right. Don’t fall into the trap of incorporating the wrong way. You could wake up and find you have no protection at all. Why Incorporate a Business?…
    Online incorporation tools

    Are Online Incorporation Tools a Legitimate and Reliable Way to Create a Corporation?

  • Online incorporation tools can lead to serious legal problems down the road. The upbeat advertisements of online incorporation tools make incorporating your company look very cheap, easy, and simple. But unfortunately, that’s far from the truth. Purchasing a kit online to incorporate a business without the help of a professional can be like buying all the parts to build a car without the knowledge of how it goes together. If you don’t know what you are doing, you may wind…
    Incorporating in CA

    5 Things You Must Do to Maintain Your Corporate Entity in the Eyes of the Courts

  • If you’re incorporating in CA, here is how you can maintain your corporation’s legal status. If you are incorporating in CA, you may need to know how you can move through the process while maintaining your corporate entity. Because corporations are seen as separate entities unto themselves, they can operate in some limited capacities much like individuals do. Corporations can buy and sell property, commit crimes, be taxed, and be contracted. Incorporating your business is also an effective way to…
    risks of incorporating

    The Ugly Truth about Incorporating Incorrectly

  • Did you know the risks of incorporating can be both high and costly if done incorrectly? Filing to create an LLC is a relatively simple process; however, the risks of incorporating incorrectly are significant. A Limited Liability Corporation (LLC) is a business structure under which you can create a business. LLCs protect the business owners by limiting their liability in the event of legal action against the company. Owners of the company are referred to as “members” of the corporation.…
    Incorporating Online

    What Nobody Tells You About Incorporating Online Until its Too Late!

  • Incorporating online might be quick and easy, but it sacrifices most of the major benefits. Incorporating online is an appealing way to move your business to a different classification quickly. You can save significant sums on taxes and reduce liability. As with anything, you expect incorporating online to be the faster, cheaper and easier method. Before you commit, you should consider some of the fallbacks. These are the most important things you need to know about incorporating online. You Become…
    True Cost of Incorporation

    What’s the True Cost of Incorporation?

  • You need to know the true cost of incorporation before you make mistakes that could sink your business. Why do you need to know the true cost of incorporation? Running a small business leads to a life full of difficult decisions. As your business grows, managing taxes, costs, liability and asset protection becomes a juggling act. You may have looked into incorporating as a way to protect yourself and your partners to clear the way for future expansion. This can…
    Incorporate a Business

    How to Incorporate a Business the Right Way

  • What do you need to know to incorporate a business? Do you know how to incorporate a business? When it comes to your business, the term "incorporate" means to convert your business into a corporation. By law, a corporation is treated as a person, who can buy property, sell property, commit crimes, be taxed and contracted. Turning a business into a corporation prevents you from being held personally liable for what happens to the business, at least to a certain…

    The Consequences for Failing to Comply with the 1099 Rules

  • If your business paid someone (who was not your employee) a total of $600 or more during the year, you must issue a 1099 to them (unless it is a corporation). For attorneys, 1099s are required even if incorporated or regardless of their entity type. In addition 1099s must be filed with the Internal Revenue Service. The 1099 filing requirement applies for payments made by your company to people who provided services (including parts and materials), to independent contractors, vendors,…

    1099s: The IRS’ War on Underreporting—Don’t Get Caught in the Crossfire

  • The IRS has declared war on the underreporting of income and is taking the most aggressive approach ever in their ability to enforce compliance with new 1099 regulations. Many IRS auditors are now denying deductions for payments by businesses that fail to issue required 1099s, even if unintentional. The IRS penalty trap Since 2012 business tax returns have two questions that all businesses must answer, or risk an audit.  They are: Did your business make any payments that would require…

    Transferring Risk Using Insurance for Commercial Businesses

  • California law requires that business owners act responsibly in managing the risks common to their industry and to protect against other areas of vulnerability. Businesses should consider transferring a large part of its risk to an insurer (which has deeper pockets) to protect against the full impact of an uninsured loss, which could threaten its viability. Home-based businesses If you operate your business from home, don't expect your homeowner's policy to cover you in case of a mishap without an…

    Independent Contractors—Factors to Consider

  • Whether a worker is an employee or independent contractor depends on the right or ability of a company to exercise control over the worker. An employee is subject to the will and control of the employer not only as to WHAT shall be done but HOW it shall be done.  In contrast an independent contractor (contractor) is engaged to provide a finished project or job. The way in which it’s completed is left to the discretion of the contractor. Common…

    Reducing Liability with Good Business Practices

  • Business owners need to demonstrate good business practices in order to reduce their company’s liability and to prevent personal liability themselves. Operating a business through an LLC or corporation won’t protect your home and personal property from business lawsuits and creditors if you don’t also demonstrate good business practices. The following are some of our recommendations: Maintain the corporate or LLC veil of protection.  Even corporations and LLCs that were properly formed could end up losing their asset protection quality…

    Does your LLC or Corporation have Legal Standing?

  • The vast majority of small business LLCs and corporations in California may lack legal standing due to being improperly formed. To be properly formed under California law: LLCs must file articles of organization with the Secretary of State. These articles must be formally adopted by its members along with a signed operating agreement during its initial organizational meeting and recorded in the first minutes and retained in the LLC legal book. This includes LLCs that elect to be taxed as…

    Proper Formation and Maintenance of LLCs and Corporations is Mandatory

  • Proper formation of your LLC or corporation is mandatory to have legal standing in California. LLCs that lack operating agreements and corporations without approved bylaws may not be protected in California. Without legal standing your home and personal assets could be exposed to business lawsuits, liens and creditors. (See our article: “Does your LLC or Corporation have Legal Standing?” for details). Not only are operating agreements or bylaws necessary to establish legal standing under California law, they are also important…

    Alter Ego Blunders—Piercing the Corporate Veil

  • If your company is sued, can you be held personally liable? Many people form LLCs and corporations to protect their home and personal assets from business judgments, but the vast majority of small corporations and LLCs have absolutely NO protection, because their owner’s commit alter ego blunders. Alter ego means that the company appears to be an alternate version of the owner; that the law cannot distinguish a separate and distinct difference between the two. When a serious alter ego…

    LLC and Corporation Compliance Program

  • The Rules for operating an LLC or corporation are complex and NOT COMPLYING with them can cost you thousands of dollars. We can take the burden off of you in keeping your LLC or corporation in compliance with the law to protect your tax benefits and protect your home and personal property from business liability. We have created an on-going year-round compliance and tax planning program for the protection and success of your business. Our Biz Tax & Compliance Coaching…

    Which Tax & Regulatory Laws Did You Unknowingly Violate Today?

  • The problem today is that most small business owners are violating dozens of tax and business laws that they don't even know exist.  Business owners already struggle to make a living while trying to comply with the very complex Tax Code.  They generally don't have the time or resources in meeting all of the regulatory requirements that our government has placed before them, or even to find out exactly which regulations apply to them and which don't. Business owners find…

    Employee Issues

  • If you have hired employees or are considering it, even if your employees are family members, you need to talk to us. Learn how to be in compliance with the Department of Labor and the various agencies that regulate some portion of the complex employment laws, and how you may benefit from pre-tax owner or employee benefits. Let us educate you on the various labor laws and how to comply with them.  We will help you comply with the Department…

    Corporate or LLC Compliance and Annual Meeting Plan

  • Many business owners form an LLC or a corporation with the misunderstanding that their business structure will protect them from lawsuits or creditors. However it is rare that these same owners operate their business in a manner consistent with their chosen entity structure, as required by law. Therefore, they often find out that they have no protection. The courts consistently rule that if you are not acting like a corporation or LLC, then you are not one.  If you do…

    Shielding Your Assets

  • To properly shield your assets requires planning and restructuring as to the way you hold and control those assets.  Asset protection planning is the method of preparing for the possibility of future lawsuits by rearranging the ownership of assets so that they are beyond the reach of potential creditors. Taking action to protect your assets must take place before any event has occurred that could result in a claim against you.  If you have already committed an act that could…

    Protecting Your Business

  • How can you, as a business owner, protect your assets when you start a business? If you begin a business without incorporating it or forming it as some type of limited liability entity, then all of your personal and business assets are at risk for all debts and claims against your business. If you run your business as a sole proprietorship or a general partnership, then you have no asset protection—all of your business assets are exposed to both, business…

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