9 Start-up Tasks for Forming an Entity
To get started there are a few key things you need to do:
1. Select a company name
Corporate Direct assists in verifying and clearing the company’s name availability in the state of formation. Trademarks can block the use of some names. For more on this, click here.
2. Choose an entity type
Entity types have different strengths and weaknesses. The right entity for you will depend on your situation. Will you form a C corporation, S Corporation, LLC, or LP? We assist in this choice. If you have a CPA we will work with them to determine the best tax reporting selection (i.e. S or C corporation or partnership taxation). We offer free consultations on choosing entity types. Sign up for a free 15-minute consultation here.
3. Form the entity the right way
Corporate Direct’s mission is to provide you with all the documents and services you need to be fully protected. If the paperwork is incorrectly done or incomplete, the entity may not protect you in the event of a lawsuit. Form your entity with confidence by forming with Corporate Direct!
4. Obtain an EIN
Obtain an EIN (Employer Identification Number) from the IRS. This is your Social Security Number for the business. We can assist in obtaining this vital tax number. For more information on EINs, click here.
5. Get a registered agent
Designate a registered agent to receive legal document on your behalf. Every corporation, LLC, or Limited Partnership must have a registered agent (also known as a “resident agent,” “statutory agent” or “agent of process”) in their state of formation and in any state the company qualifies to do business in. Corporate Direct provides this service in all 50 states. The registered agent ensures you receive all important legal documents such as service of process (meaning a notice of a lawsuit) and official governmental notices.
In the case of a lawsuit, it is important to be notified as soon as possible since most states only allow you 30 days to answer the complaint. Without an answer, you will typically lose the case. It is important to deal with a professional, established company that will get notices to you promptly. We have been providing this critical service for 30 years and helped more than 10,000 clients (see testimonials). For our globe trotting clients, we can email the important notifications to you, instead of waiting for the mail to catch up with you. Learn more at https://www.corporatedirect.com/start-a-business/start-now/registered-agent-services/
6. Open a company bank account
With your EIN and the corporate paperwork we provide – articles, by-laws, or operating agreements – you will open a company bank account. (Know that banks will not open an account without the EIN.) It is very important that you run your business activities through a business bank account. Co-mingling personal and business monies through your personal account can get you in trouble.
7. Set up your books or hire a bookkeeper
Now that you are in business, you need to keep accurate financial records. If you have employees, you need to handle reporting and payroll tax matters. You can do this yourself (if desired). Many people’s time is more valuable and better placed in running the business – so they hire a bookkeeping service.
8. Always provide corporate notice
You want the world to know you are doing business as a protected entity. On your checks, brochures, contracts, and leases you will always use your entity designation – Inc. for a corporation, LLC for a limited liability company, and LP for Limited Partnership. When you sign contracts you will do so not as Joe Jones but as Joe Jones, president of XYZ, Inc.
9. Check with Local Government Authorities for any Needed Licenses
Check with the city or county authorities on the need for any business or other licenses. (Some may do this first.)
While this may seem daunting it doesn’t have to be. Corporate Direct will take on the first five tasks for you. (For the first task you select the name, and we’ll see if it’s available.) We will make sure everything is done the proper way so that you can step in at number 6 open your business bank account and get started. Our service will save you hours of trouble and the sleepless nights of wondering: “Did I do this right?”
Call Corporate Direct at 800-600-1760 to speak with an Incorporating Specialist about taking steps towards proper protection, or make an appointment at https://www.corporatedirect.com/get-free-15-minute-consultation/.
*A trademark name is independent of the company name. A trademark is the name applied to your goods or services. It can be handled after the company’s formation. For a free book on trademarking click here.