You have a lot of decisions to make when starting a business.The most important decision you will make is the form of the business.Each entity has its own advantages and disadvantages.Evaluate each option from a tax standpoint and assess any legal liability considerations when determining which will best fit your business.
Step 1: Write a business plan.
How your business will run is the subject of a business plan.This step isn’t required to operate a sole proprietorship, but it will help you plan your business.
Step 2: There is a “Doing Business As” (DBA) certificate.
You need a certificate to conduct business under a name that isn’t your own.You can get a DBA by filling out a form and paying a fee.You don’t need a DBA if you are doing business under your given name.
Step 3: Start conducting business.
If you’re a sole proprietor, you don’t need to file paperwork to start your business.
Step 4: You should report your business profits and losses on your tax return.
Step 5: Writing a business plan is a good idea.
Step 6: You can file organizational documents in your state.
Be sure to check with your state’s Department of State to find out if the business entity is offered.Determine which documents you need to file.Some states may require you to publish notice of your business formation in local newspapers if the documents include Articles of Organization.You will have to pay a fee.
Step 7: An operating agreement can be drafted and adopted.
An internal document that is not filed with the state is known as an operating agreement.It’s a good idea to draft an operating agreement if you don’t have to, it will give you an idea of how your business will run, from the type of business you decide to operate to handling payroll and who will receive what share of profits and losses.
Step 8: You should operate your business.
Step 9: You should report your business profits and losses on your tax return.
Step 10: Pick a name for your company.
States place restrictions on the words that may or may not be used in the name of a corporation.The name of the business should state that it is a corporation.
Step 11: Determine who will be in charge of the corporation.
The people in charge of getting the corporation up and running are the initial board of directors.Two of the most important decisions the corporation will make are the issuance of stock and pick officers.
Step 12: You should file the documents with your state.
The articles are usually accompanied by a filing fee.You can either fill out an approved form that your state’s secretary of state will approve or you can draft your own.The name of the corporation, its address, and the name and contact information for the person who can be contacted about that corporation are included in the articles.
Step 13: The corporate bylaw needs to be drafted.
An operating agreement is similar to these.How shares of stock are voted, how directors are chosen, and other information will be included in corporate bylaws.You can use a template or draft your own.
Step 14: The board should hold an initial meeting.
At this meeting, the initial board of directors will decide how to handle certain financial or tax issues, as well as authorize the issuance of stock.
Step 15: They should issue shares of stock.
In order to become a corporation, you need to issue stock as this shows the division of ownership.
Step 16: A corporation can be formed.
The first step in creating an S Corporation is to create a corporation.Follow the steps outlined.
Step 17: Form 2553 needs to be filed with the IRS.
The form can be found on the IRS website.
Step 18: The initial board meeting should approve the S Corporation tax election.
The S Corporation tax election needs unanimous consent from the board.