Starting a small business needs you to get prepared. There is research involved for your business plan, which of course, requires you to sit down and refine your idea. As a small business owner, you are then tasked with writing up your business plan, which includes the business’s purpose, the products and services, business end goals, and the start-up costs involved.
You still have a long way to go since you need to assess your finances. The process involves doing a break-even analysis, watching your finances so that you don’t overspend, consider the finance options (loans, grants, investors), and choosing the right bank account. You can do all this without much hustle.
The most significant headache comes when you have to decide on your legal business entity structure. Before you register your business, you need to determine the entity type it will be. The business structure you register legally affects everything about the company. The effects are on how you file your taxes to personal liability.
Common Business Entity Options
1. Sole Proprietorship
If you want to go it alone and plan to take responsibility for all debts and obligations, then this is the structure for you. Remember that this route will directly affect personal credit.
With this structure, it means two or more persons are held personally liable as business owners. If you can’t go it alone, then it is nice finding someone to complement your skills in running the business.
You may want to separate personal liability from your company liability. Consider forming any of the following corporations:
- S Corporation (S Corp)
- C Corporation (C Corp)
- B Corporation
The guidelines of each might be different, but this kind of business entity creates a separate entity from its owners. As such, corporations can own property, assume liability, pay taxes, enter into contracts, and sue or be sued like any other individuals.
If you plan on going public, then corporations are the best suitable.
4. Limited Liability Company
The limited liability company form of business structure is the most common for small businesses. This structure offers the legal protection of a corporation while at the same time allowing for tax benefits enjoyed by partnerships.
Thus, it is upon you to decide the type of business entity you want. Remember to align your choice to your current and future business needs.
In this case, we are going to stick with LLCs. After settling for the structure, it is now time to register your business and make it legal. The legal requirement is that you will need to register your business with federal, state, and local governments.
The LLC filing process is tedious and needs someone with a great understanding of business formations to make it smooth. This can be an attorney or an LLC formation service provider. Attorneys’ charges cost a leg and an arm since they charge per hourly rates. Thus, an online incorporation company would be the best deal.
Most LLC formation service providers offer their services in packages. This means several services and products are combined to form a suitable package that meets the new business owner’s needs.
In others, you have the option to customize whatever service that best suits you.
There are several documents you need to prepare and file with the state secretary. The most basic ones include:
- Articles of Incorporation and Operating Agreements
For the government to recognize your business official, you must register your business. Thus, a document with your business name, the purpose of your business, structure, and any other information is required.
- Doing Business As (DBA)
You may not have articles of incorporation or the operating agreement. Thus, you need to register your business name, which can be your legal name, a fictitious name if you are a sole proprietor, or any other name you have come up with for the company. You can also trademark your business for extra legal protection.
- Employer Identification Number (EIN)
Once you register your business, you need to get an EIN from the Internal Revenue Services. The purpose is to separate personal and business taxes once the business owner decides to hire an employee.
- Tax Forms
Certain forms need to be filed to fulfill federal and state income obligations. Your business structure determines the type of forms, and thus, you need to check with the state for information on state-specific and local tax obligations.
- Federal, State, and Local Licenses and Permits
Businesses may need federal, state, or local licenses and permits to operate.
Thus, with the business requiring the above documents, patience needs to be exercised. It is here where the help of online LLC formation service providers is required. This review will compare two online incorporation companies, i.e., Corpnet vs. Inc Authority Review.
There are other LLC formation providers that help in filing and also offering legal advice. They include MyCorporation, Swyft Filings, LegalNature, LegalZoom and GovDocFiling.
At this point, you may be asking yourself why I am so into limited liability companies. Well, LLCs have become the most popular forms of business in the USA over time. The main reason is that small businesses gain the advantage of limited liability while keeping a simple and flexible management structure.
Let me address the reasons in detail
- Liability Protection
Legal challenges might arise in your company, and the need to sell assets to settle some of the matters occur. Thus, by incorporating your business, you reduce the risk of losing personal assets. You are not responsible for the business’s liabilities, and hence they cannot seize personal assets to recover the same.
- Pass-through Taxation
When it comes to taxation, an LLC is not considered separate from its owners. Thus, the Internal Revenue Service(IRS) provides that the business income passes through the LLC members’ business. The members then report their share of profits or losses on their tax returns.
- No Restrictions to Membership
LLC ownership doesn’t have a restriction as to the number of members it should have. It can be formed in any state with just one member known as a single-member LLC or with more than one member known as a multi-member LLC.
- Flexibility in Structuring the Management
Most LLCs have members playing equal roles in the management and running of LLCs regardless of ownership percentage. This is so unless stated otherwise in the operating agreement.
An LLC can also decide to have separate managers who may or may not hold a stake in the company.
- Less Annual Paperwork and other Formalities
Few documents need to be filed when forming an LLC. The three most important ones are Articles of Organization, Operating Agreement, and Employer Identification Number.
Inc Authority is an LLC formation company that has existed since 1989. That is way before the internet craze. Over time, they have helped form over 130,000 businesses. With over 30 years of experience in business formations, they are resourceful, and you are guaranteed a very successful LLC formation journey.
They are famous since they will set up your limited liability company for free, and you are only required to pay the state fees payable to the secretary of state.
The idea of free formation services is to create trust and loyalty to the customer. That way, they win business for a more extended period.
What does Inc Authority offer you?
- Business Name Check
- Prepare and File all the necessary documents
- Registered Agent Services
- Delivery and storage of documents digitally
- Business Checking Account
- S Election Form
- INC Care support
- Tax planning consultation
Inc Authority Packages
Starter Business Bundle
With this package, you get the following services. There are several extra like the initial meeting minutes and operating agreement, but these apply to corporations. The bundle goes for $399 plus the state filing fee.
- Business name availability verification,
- Employer Identification Number(EIN)
- Tax Consultation
- Business Credit and Funding Evaluation
- Ownership Certificates
- Advisory Services for a year
- Ownership certificates
- Record book and company seal
- Custom State Filed Articles
- Initial Meeting Minutes and Resolutions
Executive Business Bundle
The bundle includes all the features in the Starter Business Bundle
- a business license report
- a website domain.
Tycoon Business Bundle
This bundle costs $799, and it is an upgrade to the Executive Business Bundle. The package includes
- Express processing,
- BizCredit express,
- D&B credit bureau registration,
- Business credit LaunchPad and
- A business credit coach
- Website Domain
- Multi-tiered credit building system
- Business License report
Why Inc Authority?
Additional Services and Features
You can buy some of these extra features a la carte during the registration process. You could add express processing at $49 or the EIN for $49. A point to note is that the extras are set to a “yes” default, and thus if you don’t need them to click the green box for “no.”
You get what is Advertised.
The LLC formation process is free and without add-ons, just as advertised. The state fees apply, and no extra cost was hidden in there.
Easy and Fast
Customers say that creating an LLC or Corporation using INC Authority is easy and fast. The representatives have an excellent track record for being helpful, professional, and knowledgeable of every step in the process.
It is encouraging to see 3000 positive reviews from satisfied customers. Better Business Bureau(BBB) gives Inc Authority an “A” rating, which is extra proof that you won’t have surprises with bad experiences.
Great for Starters
If you need only the basic steps of creating your business, then Inc Authority offers you that affordable option. You might find a better deal with rival LLC service providers for specific add-on features for a more strong LLC, but none beats Inc Authority.
Corpnet is an incorporation service provider formed in 2009. The business formation service has helped 500,000 plus entrepreneurs start their businesses. Partnerships with attorneys and CPAs have enabled them to incorporate better and form LLCs.
They help you:
- Incorporate your business
- Form an LLC
- File a Fictitious Business Name(DBA)
If you want a smart way to start a business from scratch and keep it in compliance, then CorpNet is the way to go. CorpNet offers small business owners a simplified way of starting a business. Their business formation experts will help you file all the required paperwork. You are guaranteed quick and affordable services that are backed up by a 100% Satisfaction Guarantee.
CorpNet Formation Packages
CorpNet provides a business owner with three business formation packages. Below is an outline of what each package offers.
This package goes for $79 plus the state fee and offers
- A Name Availability Check
- Official Filed Articles of Organization
- Online Compliance Tool, which helps you in tracking when you need to file your taxes and reports
- Free Registered Agent for the first 60 days($149 annually after that)
This package goes for $199 and provides you with all the services in the basic plan. Also, you get:
- 24-hour document preparation
- Registered agent service for a whole year
- Federal Tax ID Number (EIN)
- Delivery of your printed documents
The complete package goes for $249, and you get everything in the first two packages. Besides, you get:
- A customized LLC operating agreement and minutes
- A customized LLC kit and seal
CorpNet has a high number of positive reviews from customers. Most business owners say that the LLC formation process is quick, and CorpNet representatives are friendly, helpful, and knowledgeable about the process.
CorpNet is one of the best LLC formation service providers. This is seen through their positive reputation with customers. Their formation packages may be a little more expensive than others, but CorpNet is committed to its customers and is clear on pricing, giving them an advantage over its competitors.
100% Satisfaction Guarantee
Sometimes you don’t get satisfied with the services that are provided. With CorpNet, you get a 100% Satisfaction Guarantee on their service, and in case you are not happy, they will fix your issues or refund your fees in full. This applies to the first 60 days of purchasing the service.
CorpNet takes full legal and financial responsibility if there is an error in filing your LLC formation documents. They will fix any problem at no extra cost.
Customer reviews have the power to influence clients’ decisions and also strengthen the company’s credibility. The company gains customer trust, and people are encouraged to interact with the company, which leads to improved profits.
- Both have a registered agent in their business formation packages.
- Looking at both dashboards, then both have an easy-to-use and straightforward system.
- They provide you with a name availability check.
- Both are ranked highly by customers.
- You can choose a business formation plan from the three options that each has.
- Corpnet has a free registered agent for the first 60 days and charges $149 after that. Inc Authority has a free registered service for a whole year.
- CorpNet does not charge for EIN registration, while Inc Authority charges $45 for the same service. Note that the service is provided free by the IRS.
- Ease of Use The formation process is easy and straightforward, and it doesn’t need one to be a computer genius to register a business entity.
- Registered Agent: Inc Authority offers FREE Registered Agent Service for a whole year.
- Free Incorporation: The idea of offering customers free business registration is a fantastic one. This way, new business owners on a shoestring budget can register their companies. You only need to pay the state fee, and you are good to go.
- Consultation: Easily undergo free consultation to weigh possible business funding for your business’ operational needs.
- Name Checks: As an aspiring sole proprietor of an upcoming new business, you can check whether your desired name is available or not for free.
- Experience: The LLC service provider has been around for over 30 years.
- Customer Support: Despite the few hiccups, the company has a strong customer support team.
- Packages: Unlike most online LLC services, you can’t pick a business formation package for the formation service.
- Upsells: During the formation process, there is way too much upselling going on for my liking.
- EIN Registration: Charging $45 for something that’s FREE sucks.
Pros Of Using CorpNet
- Ease of setting up a business.
- As one of the most well-established LLC formation and legal services providers, it’s highly reputable. It’s among the firms responsible for pioneering online limited liability company registration.
- The agency prides itself on delivering impeccable customer service. Despite having complaints like any other business service provider, most have been amicably resolved. This has led to happy clients, such as myself.
- The agency’s 100% satisfaction guarantee means that you are sure of a refund if you are unhappy with the service. No hustle, no fuss!
- Unknown to some, CorpNet traces its origins to 1997. This means that they are a seasonal company that knows what they are doing.
- The use of automation technology makes growing a business easier. With CorpNet, you won’t need additional third-party software like QuickBooks to assist you in accounting. You can do everything in-house.
- Compared to its competitors, say ZenBusiness, CorpNet’s Basic service package at $79 is more expensive. Despite this, you can rest assured you are dealing with a firm that knows its way around.
Inc Authority Reviews
LLC creation is an important process that needs you to be keen and knowledgeable. The market is full of online incorporation service providers. It isn’t easy to single out the best from the flooded market.
Thus, this review helps you choose one that suits you best. CorpNet charges for its business formation services, but Inc Authority is free. The question is, who offers the best value for your money.
With free incorporation, free registered agent for a whole year, and having experience in what they do, then Inc Authority wins over CorpNet.
Jon runs the place around here. He pontificates about launching and growing online publishing businesses, aka blogs that make a few bucks. His pride and joy is the email newsletter he publishes.
Hyperbole? Maybe, but go check it out to see what some readers say.
In all seriousness, Jon is the founder and owner of a digital media company that publishes a variety of web properties visited and beloved by millions of readers monthly. Fatstacks is where he shares a glimpse into his digital publishing business.