So you’re ready to get your dreams of owning and operating your very own business off the ground. Before anything else, you need to set up your LLC. Here are common slipups you should do your best to sidestep over:
Operating with No License
Some people think you don’t have to bother getting a license. But if you would rather not pay for hefty fees in case you get caught operating without a license, then get one as soon as you can. By getting the necessary business license and permits, you can now run your business with ease, says Small Business Trends.
Getting the Business Entity Wrong
Business structures in the U.S. typically involve any of the following: an S corporation, a C corporation or an LLC. Know which type your business belongs to. LLC, for instance, works well with small businesses that are after liability protection sans the tedious amount of formalities and paperwork. Have federal taxes to care of? Then go with the S corporation, so long as your business qualifies. If you’re a freelancer, though, the C corporation—with its own tax reports—might not be the best option for you. So know which one to go for.
Non-compliance with the LLC
Your company’s compliance with the LLC doesn’t stop and end when you file LLC. You have to keep your company compliant by meeting a number of qualifications. If you don’t, then you might only succeed at putting your personal assets at risk. So take every step to ensure your company remains LLC-compliant.
Unless you have a company with more than five shareholders, trying to manage the costs and hassles of operating your business out of the wrong state can be more trouble than it’s worth. Better to start the business in your own state. For more information visit http://fullspectrumtaxsolutions.com/. You can follow A Kaplan CPA, P.C. on Twitter for more updates!