Thursday, June 30, 2011

Tips to start your company

There are different types of organizations you can start  from LLC, S Corp to C Corporation, Non Profit .Read the article at this link to see which one suits your business best.

1) Registering the company
Once you know the type of business, you should choose a name for your corporation. You can register your company online for a nominal fee. There are several websites which check if the name you have chosen for your company is available and then help you register with the federal and state. They also offer other services like web hosting, creating a logo. Here is the one I used to register my company in 2007.
When the registration process is complete you will receive a Federal EIN number along with other TAX Schedule documents from IRS and State in the mail. Organize and store them in a safe location.Document keeping should be a habit that you need to cultivate once you have your company.EIN (Employer Identification Number) is like your social security number which uniquely identifies the corporation. In case of an S-Corp you need to elect the S-Corp status by filing form 2553.Check this link for more details.

2) Open a Small Business Bank Account
Once you have the EIN number and the articles of incorporation you will be able to set up a small business bank account. Banks offer a variety of free services like payroll for small businesses. So check with different banks and choose the best one. If you have a personal account with that bank you can link it business accounts and use the same online login. Some banks provide you with the starter’s kit which has the forms that you have to maintain for you and your employees.

3) Payroll Services
Payroll service providers charge you anywhere between thirty and forty dollars per employee each month. Bank of America provides free payroll service for its small business customers with up to 20 employees. The catch is that your employees should have Bank of America account which s/he uses for the direct deposits (Salary).They handle all the federal taxes and do the book keeping for you. They will handle the state taxes if you upgrade the service by paying a twenty dollar monthly fee. It should be easy to handle the state taxes on your own.

These should get you started. I will share more tips on the tax structure, business insurances,creating invoices in the future.