start-up, Uncategorized

Incorporating a small business – Part 5

So after a week of filling out the online questionnaire with Legal Zoom in order to incorporate a small business, here’s how far along we are on their progress bar…

In other words, we have to accelerate this – I don’t want to still be doing this series of posts during Christmas.  It also tells us that their “15 minute” estimate might have been just slightly off.  It doesn’t help that I have to start over from scratch every time I leave their site to do other things.   Hey, Legal Zoom, since you’re saving the information I enter (I can tell because the forms are pre-populated with my choices), can’t you save my place, too?

But, I digress. The next screen following the Compliance Calendar that I mentioned last week has three sections for stock, fiscal year, and corporate minutes. They all sound daunting, but the reality is that for most small corporations, these are all pretty easy questions to answer:

1 – How many shares of common stock can the company issue? Legal Zoom offers some basic help with answering this question, along with a suggestion that for new corporations with just a few shareholders, the amount can be an easy round number like 1000. So that’s what I’ll enter, although part of the reason it’s a little easier for me is because I don’t live in one of these states:

Connecticut
Delaware
Kentucky
Maryland
Massachusetts
Michigan
Missouri
Nebraska
Nevada
New York
New Mexico
Ohio
Oklahoma
Virginia

2 – What is the par value of the shares? The most common answer to this when forming a new corporation is 0.01, which is their default.

3 – Next it asks when the end of the fiscal year is for the new company, and the most common answer, especially if you’re an S-Corp, is December 31.

4 – The final question on this screen involves the maintenance of corporate minutes and offers to provide what basically sounds like a template for them for $69-$99/year.  I think I’ll pass.

… to be continued…

Uncategorized

How to incorporate a small business on Legal Zoom – Part 4

To continue this series of posts, your next screen on Legal Zoom asks you to provide your corporation’s address. That’s pretty self-explanatory, but its next question might not be. It involves defining the corporation’s registered agent — in other words the individual who will be identified on public record as the “stakeholder” for the company. 

Legal Zoom offers an upsell option here, where they can act as your registered agent on your behalf, although this comes with a hefty annual price.  In most cases, the person filling out this form on Legal Zoom would probably choose to be their own registered agent.    And if you choose the latter option, as I did, you have to provide the address for the registered agent, which is typically the same address as the corporation’s.

The final question in relationship to addresses and registered agents is another up-sell option Legal Zoom calls their “Compliance Calendar” which comes with an annual fee of $69. According to Legal Zoom, their Compliance Calendar automatically notifies you of important state and federal deadlines and tax requirements.  Yes, like most service companies, Legal Zoom charges nominal fees for completing steps you can complete yourself for free – that’s the cost of knowledge and convenience.

Stay tuned next week as we get into the fun stuff — common stocks, fiscal years, and corporate minutes…

ceo, start-up

Incorporating a small business on Legal Zoom – Pt 3

… continuing on with the step-by-step process of incorporating a small business on Legal Zoom…

11. After you enter your state of incorporation and your proposed business name and hit the CONTINUE button, it asks: Would you like us to help you obtain S corporation status?  It offers 3 options:

  • Yes, obtain my S-Corp status with the IRS
  • Yes, prepare my S-Corp form only
  • No (which means you want a C-Corp)

Here’s the help that Legal Zoom supplies in regard to this question: “An S corporation is treated as a pass-through entity for tax purposes. This avoids double taxation and may simplify your taxes. LegalZoom can obtain S corporation status for you, or we can prepare IRS Form 2553 so that you can more easily obtain it on your own. Please note that we can only help if the corporation has a fiscal year ending December 31.  Please note that one of the restrictions that apply to an S corporation is that it cannot have any preferred stock. You may only have common stock.  Preparation of IRS Form 2553 is included with the Gold Incorporation Package — otherwise, a $45 charge will apply. To have LegalZoom obtain S corporation status for you, an $80 charge will apply ($35 with the Gold Incorporation Package). If you would rather be a C corporation, select no. Which is better? There is no right answer to this question. The majority of our users form S corporations. You may wish to consult with an accountant to see which type of corporation is best for you.”

I’m going to obtain S-Corp status for my business, and I’m going to have LegalZoom obtain it for me for $80. I have better things to do.

12. Same thing with the next question: Would you like us to help the corporation apply for a federal tax identification number?

  • Yes, please obtain my tax ID for me.
  • No, prepare the form only
  • No

I’m going to have them obtain my tax ID for me.  That’s why I’m using  a service. It’s going to cost me $79.  When I look at my normal hourly rate, I have to ask myself how long it would take me to figure out how to do it on my own, then to actually do it, and then to deal with the anguish afterwards if I did it wrong.  Probably more than $79.

As I continue to draw parallels between this process and our online process of helping authors publish and market books at Outskirts Press, this is another similarity. We offer similar services/upgrades through the process. For instance, our authors are presented with the option early in the pre-production process to have us officially register their copyright for them with the U.S. Copyright Office. They can do this on their own, just like I could obtain my S-Corp status on my own, but it’s just easier to let someone else do it all for you. At least, that’s how I feel…

13. Then it asks: Are you a doctor, dentist, lawyer or other licensed professional seeking to form a Professional Corporation? If so, please check this box.

Personally, I’m saying No to that one, which means I leave the box blank.

14. Click SAVE AND CONTINUE

… to be continued…

 

branding, marketing, start-up

Incorporating a small business on Legal Zoom – Pt 2

… Continuing from where we left off yesterday as we incorporate a small business on Legal Zoom step by step…

6. Select your state. I’m choosing Colorado. You have to choose the state either from the drop down box or by clicking on the graphic (if you know your geography), followed by clicking the orange Continue button.

7. Next you see a Progress Bar, some information about the process–including the claim that most people complete it within 15 minutes–and the first two questions.  Personally, I’m finding this interesting due to some similarities with our publishing site at Outskirts Press, which demonstrates in some ways that internet site best practices are not industry specific.

For instance, before our Version 4.0, we had a “progress bar” for the pre-production process.  For a variety of reasons, we removed it, but I’ve always wanted it back.   We also notify authors of how long the pre-production process will take, by saying “most authors complete it in X amount of minutes.”  In our case, we say it can be done within an hour.  That’s probably as realistic as Legal Zoom’s 15 minutes, but I digress.

8. The first question it asks is: Would you like to form a new corporation, or convert an existing business to a corporation, and the default answer is “Form a new corporation” which is the one I’m choosing.

9. You also get a chance to re-confirm your state again.  It may seem repetitive, but this is actually a trick of website design. What this site has done is introduced the process with the “fun” (and easy) exercise of clicking on a big map.  They could have just come straight to this text-intensive screen and not missed any steps, but their user-tests probably informed them that people seeing THIS screen first bailed on the entire thing.  People like clicking on graphics. They don’t really like reading websites.  This is why our Version 4.o website design at Outskirts Press has icons for every option/service we offer. But… I digress again.

10. Next question: What is the proposed name of the corporation? Please type it in EXACTLY as you want it to appear. (The name must end with “Corporation,” “Incorporated,” “Corp.” or “Inc.”)  – Here’s where you get one of the benefits of using an online service. They’re going to “test” the availability of your name.

11. It also asks for two different alternative names to the Proposed Name of the Corporation question it asked above.  Personally, I wasn’t prepared to have to have 3 total company names — I had a hard enough time coming up with one!   So I just attempt to hit the SAVE AND CONTINUE button without supplying any alternatives, and it works.  I guess if my name isn’t available, I’ll cross that bridge when it comes…

… to be continued…

start-up

Incorporating a small business on Legal Zoom – Pt 1

So you’ve decided to incorporate a small business and you’ve looked at all the available options for doing it and have selected an online service called Legal Zoom to help you with many of the formalities. Okay, me, too! So let’s do it…

1. Go to LegalZoom.com and click on Business Services from the main menu tabs and then choose Incorporation (S-Corp, C-Corp) from the sub-menu. You will see this screen:

2. Click the orange Get Started button.
3. Click the orange Get Started button again. Weird, but okay…
4. You’ll probably have to register as a new user to their site at this point…
5. Select the state that you would like to incorporate in. For some very brief considerations on that topic, read my previous posting here. (And for better advise, consult with a tax advisor or accountant).  Most people incorporate in the state they live in…

6. I’m going to select Colorado for my incorporation, so the remaining screen shots may vary slightly, but I’m assuming the general process and look of the site will be roughly the same… and we’ll continue here with the next posting…

ceo, start-up

Comparing Online Services for Incorporating a Small Business

Over the past several posts I’ve been blogging about incorporating a small business and have detailed the benefits of doing so followed by the general steps.  Not surprisingly, as the CEO of Outskirts Press, I believe using a professional online service to help you do something conveniently and easily is better than absorbing the learning curve of trying to figure out how to do it yourself.  It’s easier to go to a site and click  “ADD TO CART”  than it is trying to figure out how to register an ISBN, register a Copyright,  apply for a Library of Congress Number,  calculate the spine width of a book cover,  resample images to 300 dpi,  incorporate bleeds into a cover design,  format an interior in InDesign, and…..   Well, you get the idea. Sure, a writer could do all that herself, I suppose.    Why on earth would she want to?  Does she want to be a publisher, or does she want to be a published author?

I don’t want to incorporate businesses for a living. I just want one. So I’m going to find a service to help me, and to that end, I’ve found two comparison sites:

Compare Legal Forms

… and Top Consumer Reviews

Let’s look at only the services evaluated by both:

Compare Legal Forms also lists Incorporate, BizFilings, CorpNet, and Rocket Lawyer, while Top Consumer Reviews also lists The Company Corporation, My Corporation, My Law Daddy, and Corporate Creations.  If I were giving legal advice (which of course, I’m not, since I’m not a lawyer), I might recommend looking into all those alternatives, but for the sake of brevity, we’ll just compare the two options that are represented on both sites.

Compare Legal Forms doesn’t review the services, but rather lists their features. Top Consumer Reviews offers a review and a rating for each service it lists, and in their case, they consider Legal Zoom to be superior to My New Company.   I also happened to ask a CPA his opinion and he also recommended Legal Zoom, at least for me — your specific needs may vary. But that just goes to show, when possible, it’s always nice to hear or read what other people have to say, too.  For instance, we make our authors’ comments and testimonials readily available on the Internet (and we add 3 new ones each week) so anyone can review them by clicking here.

So… Legal Zoom it is… Stay tuned next week as I incorporate a business on Legal Zoom, step by step…

 

 

 

 

 

 

 

ceo, compare self publishing companies

Which online service should you use to incorporate a small business?

Over the past couple posts I’ve discussed the advantages of incorporating and a brief outline of the steps involved in incorporating a small business. Now let’s do some research to determine the online service to use.  I’m going to incorporate a new company, so I’m going to research online services to help me.  But how to choose the “best” one?

It’s not unlike the process I recommend to authors or professionals when they are researching a self publishing company:  Locate a number of comparison or review sites and allocate a point system to come up with a combined value for all the firms you are researching.   This prevents any one opinion from carrying undue weight.  Do enough research on any large company on the internet and you will find unhappy campers and ecstatic customers. Who do you believe?  You believe yourself, but conducting research and common sense. So when you look at a number of sources and take a combined average score from all of them, you usually come away with a good, fair idea of the service or company. 

I performed this process for self-publishing firms to demonstrate what I mean. You can see the results of that effort by clicking here.

So now we get to compare online incorporation services. I’m going to use two comparison sites: CompareLegalForms.com and TopConsumerReviews.com.    Stay tuned tomorrow to see what happens next…

ceo, start-up

How to incorporate a small business

Yesterday we discussed the reasons someone might want to incorporate a small business. Today, we’ll outline the process.

How to incorporate a small business in 5 easy steps:

1. Determine the state of incorporation. Usually this is the state in which you reside and in which you plan to conduct your business. Sure, there are some long-term tax advantages to incorporating in states that have more advantageous tax laws, but unless you live in those states (Delaware is a favorite) then you have to qualify to conduct business in your state of residence anyway, which is kind of like incorporating twice.  Should it ever become valuable to consider the tax benefits, you can always incorporate in another state later, so right out of the gate, it’s easiest to incorporate in the state you live in.

2. Determine who will own stock. It’s easiest if that answer is “Me and my immediate family.” 

3. Check with your Secretary of State or Corporations Commissioner and the federal and state trademark registers to settle upon an available business name. You can find these sources via a Google search.

3. Prepare your Articles of Incorporation – These forms are state specific, but fortunately, the Internet has made it easier than ever to find the correct form. Here’s a handy-dandy map that allows you to click on your state and be taken to the appropriate form.

4. Complete your Corporate Bylaws – This online form service can help.

5. Files these documents with your state and pay the registration fee.

Not easy enough yet? No problem. There are incorporating services available on-line that promise to make the process of incorporating a business a snap (and affordable, to boot!)  Do they work? Stay tuned tomorrow as I compare some of the major players in Online Incorporations side-by-side and pick the one I’ll use to incorporate an actual business.

Certainly there is a correlation between this series of posts and our services at Outskirts Press.  Yes, I could incorporate my business by going to each government website individually and finding the proper forms and filling them out and doing everything manually.  But, instead, I’m going to opt to use an online service to make all that work faster and easier for me.  Am I going to have to pay for that convenience? Of course, but given the amount of time it would take me to learn how to do it all on my own, the convenience and knowledge that it is being done correctly is worth the cost to me.  The same can be said for self-publishing a book…

start-up

Benefits of incorporating a business

Whether you are an author, run a small mom-and-pop shop, or act as an independent contractor for a larger company, there are many benefits to incorporating as a business entity yourself.  Here are some of the main benefits:

TOP 10 BENEFITS OF INCORPORATING

1 – You decrease your personal liability
2 – You can separate and protect your personal assets
3 – You limit your liability on business debts and obligations
4 – It’s easier to raise money for your business
5 – Creates “stock” which can be issued to investors for cash, which is more advantageous to you than seeking a loan from a bank
6 – Corporations are taxed at a lower rate than individuals
7- You can deduct normal business expenses from your taxes
8 – Corporations can deduct 100% of medical insurance premiums
9 – Helps you establish equity in a “brand name” since corporate names must be different in the same industry
10 – Helps establish credibility. Having an “Inc” after your name establishes you as an instant authority

Over the next several days, I am going to incorporate a business and I’ll walk you through the steps of doing it along with me… stay tuned…

ceo

Brent Sampson interview – part 4

… continued from yesterday…

JR: What is your favorite book and why?

Brent:  The Catcher in the Rye.  I find portions of it hilarious. That’s probably a little odd to admit, but there you have it.

JR: What is your ultimate goal for Outskirts Press? How do you intend to get there?

Brent: Ultimately, Outskirts Press will be a destination for writers who are seeking assistance with more than just publishing. We already offer ghostwriting, copyediting, and other a la carte services for authors who may not even know how they’re going to publish their book. And we are starting to add more and more book marketing services for authors who may have published elsewhere before realizing, by gosh, their publisher doesn’t offer any marketing support after publication.  These additional services to all authors are already starting to become available and we will continue to offer more.

JR: If I have dinner with any author, dead or alive, it would be…

Brent: …Bret Easton Ellis

JR: My biggest pet peeve about writers is…

Brent: …Is the same as my biggest joy about them: their artistic, passionate spirit.

JR: Other then running a publishing company and writing, I really enjoy…

Brent: …Spending time with my wife and son.

JR: One thing people would be surprised to know about me is…

Brent: …I’m an artist and used to sell a lot of artwork over the internet, complete with original poems on the back of original works.

JR: I wish I had more time to…

Brent: …Spend time with my wife and son.

 JR: Any final words or comments?

Brent: As the publishing industry is continuing to evolve, more writers are exploring ebook publishing first, through the Kindle, Nook, and iPad. Outskirts Press offers services to conveniently facilitate those publishing goals, regardless of where (or if) you published hard copy versions. And unlike most other platforms, we don’t take any of the royalties for ebook sales. Learn more at http://outskirtspress.com/p/kindle and http://outskirtspress.com/p/nook and http://outskirtspress.com/ipad respectively.