Form a Company

Post image for You Can’t Spell Corporation Without ‘IP’

This tragic story of insufficient planning is just another example from the Department of Not-Beginning-With-The-End-In-Mind. So many entrepreneurs get all “over the moon” about getting launched and off the ground that they ignore thoughts about their exit strategy. What do they want to get out of the business? How will they exit? Will they sell the […]

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Post image for Basic Training: Understanding the Limits of Limited Liability

Q: Does an S Corporation protect your personal assets?  It has become obvious I need help with this.  Any ideas you have would be very much appreciated. A: Generally, yes, a corporation will protect the business owner’s personal assets.  The “S” in “S Corp” is merely a way of designating the way in which the […]

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Post image for Basic Training: On the Subject of Incorporating

Q.: I have always been advised, by CPAs, that until a small company has a specific NET income of approximately $100,000, incorporating is out of the question.  The fees associated with Inc. may not be worth the trouble of incorporating. Wrong? If wrong, why? Thank you. A.: A $100,000 threshold?  Hmmm.  Plenty of companies are […]

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Post image for Why Business Formation is a Key to Your Success

I was recently contacted by an entrepreneur (“Marie”) for a “rush job”: She had formed an S-Corporation about a year ago, and now a couple of investors were waiting in the wings to take an equity piece of her company. She needed the deal signed, sealed and delivered within two weeks. Now I won’t say that’s […]

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Post image for Kick Start Your Success with a Business Entity

Why open yourself up to personal liability when you don’t need to?  Today’s query comes from someone wanting to know that fundamental first question: “What form of business should I be?” Q.:  I’m wondering what kind of company you would recommend for me to register under for a clothing company. I was thinking going Limited […]

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Post image for Basic Training: Issuing Shares to Investors

Investors can be a real boon to your business, but no question–they’ll want a piece of the action.  What’s involved in issuing shares to them? Q: We currently have a market cap of $200,000 (2,000 shares X $100 per share). We were wondering how to authorize new shares to new investors. A: It’s not unusual for companies […]

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Post image for Basic Training: How to Divide Profits in an LLC

When you’re in business by yourself, the math is easy.  But when you have multiple owners, how should you share the spoils?  That’s the nature of this week’s basic training post. Q: How should I divide profits in an LLC? A: Especially in an LLC, you have many options for how to divide your profits. There’s no hard-and-fast […]

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A DBA – or Doing Business As name – will keep your business in good legal standing, so it’s a good idea to file a DBA as soon as possible after launching your company. The DBA or Fictitious Business Name designation was created as a form of consumer protection, to prevent business owners from operating […]

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Should I operate business as a sole proprietor? You certainly can, but is it the smart decision for your business – particularly if you want to scale or sell down the road? In this 60 second video on Entrepreneur.com, I outline the 3 serious reasons to consider forming a formal business entity. The chief appeal […]

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Post image for Basic Training: Bookkeeping and Business Startup

Today’s post deals with the conundrum, how to account for business expenses without a company bank account, and how to set up a company without business funds? Q.:  “I recently formed an LLC to create an online store. Because I saved diligently I had enough money in my personal savings account to cover all setup […]

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