How to Start a Business

Choosing a business structure

Once you have determined the purpose and revenue-generating potential of your business, it is important to decide on the most suitable business structure. There are several options to consider, including a limited liability company (LLC), a sole proprietorship, or a corporation. The structure you choose will have significant implications for how your business is taxed, managed, and owned, as well as your level of personal liability. Each business structure has its own advantages and disadvantages, and the process for setting up each type of business can vary.

If you are considering a particular business structure, you may find it helpful to refer to our free guides on how to start an LLC or corporation. These guides provide detailed information on the steps you need to take to establish your business and help you choose the structure that best fits your needs and goals.

Sole Proprietorships and Partnerships

If you have made your first sale, then congratulations, you have a sole proprietorship or partnership. If you have not formally established an LLC or corporation, your default business structure is a sole proprietorship (if you are the only owner) or a partnership (if you have multiple owners). It’s important to note that a sole proprietorship or partnership is not a separate legal entity from you; your business is an extension of yourself. This means that all of your company’s liabilities are your personal responsibility.

On the plus side, sole proprietorships and partnerships are relatively simple to set up and do not require any state paperwork to be formally established or dissolved. They are also relatively inexpensive, unless you are sued or go bankrupt. There are no state filing fees or annual report fees associated with these types of business structures. However, there are also significant downsides to consider. For example, there is no liability protection for you or your investors, and there is less flexibility in terms of taxation. Additionally, you cannot issue stocks, and you may not be able to use a fancy or prestigious name for your business without registering a “doing business as” (DBA) name.

Once you have proven the viability of your business concept and made some sales, it may be wise to consider forming a more formal business entity, such as an LLC or corporation, in order to protect yourself and your investors. These types of business structures provide additional legal and financial benefits that can help your business grow and succeed.

Why Form an LLC or INCORPORATE A Corporation?

Forming an LLC or incorporating a corporation can offer significant advantages and protections for your business, including limited liability and tax flexibility. LLCs and corporations are business entities that are formed by filing articles with a state agency, usually the Secretary of State. While these types of business structures do require additional fees and paperwork, they provide valuable benefits that can help mitigate risk and optimize your business’s financial performance.

Limited liability: One of the primary benefits of LLCs and corporations is that they are legally separate entities from their owners. This means that the owners and investors are not personally responsible for the debts and obligations of the business. This can help protect your personal finances and provide a more attractive and secure scenario for potential investors.

Tax flexibility: Unlike sole proprietorships and partnerships, LLCs and corporations have multiple tax election options. For example, both can be taxed as C-corporations or S-corporations. Having more options can be beneficial, as you can choose the option that will save your business the most money or provide the greatest opportunities. Even if you find tax considerations boring, it is important to understand the potential financial benefits of different tax election options.

It is important to note that Non-US citizens or Non-permanent aliens cannot directly own an S-Corp. But they can easily form an LLC or incorporate a C-Corp in the U.S.A.

What About Privacy and Anonymity?

Maintaining personal privacy is a common concern for many business owners, and for good reason. Sole proprietorships and partnerships literally share the personal names of their owners with the business, while LLCs and corporations require public state filings that may reveal personal information. However, there is a simple way to better protect your privacy when forming an LLC or corporation: hiring a registered agent service that can list its business address instead of your personal address when filing your formation paperwork. This provides an extra layer of privacy protection that you cannot get by filing on your own or using a standard filing service.

At Triple B Business, we understand the importance of privacy and take steps to protect the personal information of our clients. We follow industry standard privacy guidelines to ensure that your personal information remains confidential. If privacy is a concern for you, consider hiring us as your registered agent to help you maintain your privacy while forming your business.

If privacy and anonymity is at utmost importance, please click the options below to find out more about Anonymity Planning and Wyoming Holding Company.

LLC vs Corporation

LLCs and corporations are different in terms of ownership, management, and taxation. LLCs are owned by members, who can either run the business themselves (like in a partnership) or appoint directors (like in a corporation). LLCs also have the greatest number of tax election options, as they can be initially taxed as disregarded entities or partnerships, but can also choose to be taxed as C-corporations or S-corporations.

In a corporation, shareholders own the business and are represented by shares of stock, which can be easily transferred. Shareholders elect a board of directors to make business decisions, including appointing officers. Corporations are automatically taxed as C-corporations, but they can also apply to be taxed as S-corporations. Many nonprofit corporations can also qualify for tax-exempt status.

If you are unsure which business structure is right for you, our LLC vs corporation page provides a detailed comparison of the pros and cons of each type of business.

Starting an LLC or corporation can require some knowledge and expertise, which is why we are here to help. At Triple B Business, we offer support and guidance to help you understand the process and make informed decisions. Our team of local experts, known as Corporate Guides, are available to answer your questions by phone or email. Additionally, we can help you form your LLC or corporation, so you can get started quickly with the support and privacy protection you need.

where to form my new business?

This is a great question and it depends on multiple factors.

We currently offer Business Formation Services only in the States of Wyoming and Delaware because these two great states offer multitude of advantages to new small business owners.

Please see the links below to find out more.