Someone once said that the only way to make a simple job difficult is to keep putting if off.
This is what I did when it came to incorporating my business.
I guess I’d convinced myself that anything involving the government would be really, really complicated. As a result, forming an LLC remained on my to do list for several months.
However, I was pleasantly surprised at how easy it was to incorporate a business in the United States.
Before learning how to incorporate, you first need to answer two important questions:
- Is it really necessary for me to incorporate my business?
- What type of an incorporation should I form?
Advantages of Incorporating your Small Business:
- Reduced personal liability. Let’s say I have a blog, and in the blog I say something derogatory about a company (just imagine!), and they decide to sue me for my flagrant and false statements. If there is no incorporation then they can take all of my personal assets if they win the case. However, if there is an incorporated small business then they can only sue for the assets of the business, but not my personal assets.
- Cleaner taxes and accounting. You don’t need an incorporation to have a small scale business, but as your business grows, forming an incorporation will make things cleaner in terms of accounting and taxes. You’ll be able to open bank accounts, write checks, and get credit cards in the company name.
- Access to certain business only perks. After forming a small business, I wished I’d done it years ago (even when I didn’t have a small biz). The reason is that, as I try to get enough miles to fly around the world, I’m seeing some bonus earning opportunities only for companies. I know it’s a silly reason, but it is a reason none the less.
How to Incorporate a Business in the United States
When I found out that MyCorporation was allowing a free filing (you do pay the government fees plus an extra $35 for some type of fees), I decided to go that route.
The process was extremely simple.
I simply got online, and after a few clicks, I was filling out the forms as a sole organizer of a Limited Liability Company (LLC). I filled in some forms online (took all of 20 minutes). Within a couple of weeks, I had some forms in the mail that I needed to sign. After I signed the forms, they were placed in the mail. Then a few weeks later I got a letter from MyCorporation with all of the details and legal records for my new corporation.
While I can’t say anything in terms of other companies, I can say that I was extremely happy with MyCorporation. The only thing I would caution you about is all of the up sells along the way. They want to sell you every this and that you can imagine. Don’t pay for anything extra because most of that stuff is completely unnecessary.
The only other important step after getting your Certificate of Acknowledgement is that you’ll just need to spend another 10 minutes to get your employer ID number. I was also surprised at how easy this process was. They even give you your numbers instantaneously. I just visited the IRS website (www.irs.gov) and searched for Employer ID Number and, voila!, there was the simple online form.
All in all, I probably spent less than an hour and less than $125 total. I’m now the proud owner of my own LLC incorporation.
I have no idea now why I was so intimidated by the process.
Introducing CHALEF LLC
Choosing the name of the LLC was probably the hardest part.
My wife and I discussed all sorts of cool names, but in the end I came up with an uncool name (in her opinion). However, the name is personally meaningful to me, and as I run my business, I want to be constantly reminded of my three children.
I took the first two letters of each of their names and the first letter of my last name, removed any duplicate letters, rearranged them and came up with CHALEF LLC.
Have you ever incorporated a business? How was the process? Did you do it yourself or use a company to help?