Small Business

Some advantages are: you have limited liability; there are easy ways to transfer ownership; there is a perpetual life and the corporation has the ability to raise capital through the issuance of stock. Some disadvantages include: there is a double taxation of profits; the entity is subject to various state and federal restrictions; and a corporate charter may restrict the types of business activities. Speak to your local CPA to determine the best entity choice to fit your needs.

Some advantages are: there is limited liability; and the entity avoids double taxation of profits as is the case with C Corporations. The profits that are passed through to the shareholders are not subject to SE tax as in a partnership. Some disadvantages are: that the shareholders pay tax on earnings even if they are undistributed; the contributions limits to a qualified retirement plan are based on shareholder/employee wages, not the overall profits as with a Sole proprietorship; and it is less flexible in choosing a tax year.

Some advantages are that it avoids certain S corporation restrictions. It also avoids double taxation of profits. Some disadvantages are that it is currently considered a relatively new business entity with little case law or regulatory law currently available. There is inconsistent treatment from state to state. The entity must have at least 2 owners. Speak to your local CPA about determining the best entity choice to fit your needs.

Investors or lenders often require submission of a written business plan before funding a business. The basic components of a business plan are the cover sheet, table of contents, plan summary, about the company, about the product or services, market analysis, financing, specific project details, ownership and an appendix with miscellaneous information not included in any of the above sections.

Expenses incurred or paid before a business starts operations are considered capital expenses. In recent years up to $5,000 ($10,000 in 2010) of the first 60,000 were able to be elected to be expensed with the balance capitalized over 180 months. There are limitations if the total costs exceed a certain amount. $60,000 in 2010)

For information on worker classifications and other labor questions, contact the Department of Labor at their web site: http://www.dol.gov/dol

Federal law requires that certain notices for employee rights be placed in conspicuous locations where employees are likely to see them. The list of posters required are WH-1088, WH-1420, WH-1462, WH-1321 and WH-1313. Posters can be obtained free of charge by contacting the Dept. of Labor at http://www.dol.gov/dol/osbp/public/sbrefa/poster/main.htm or at the US Dept of Labor, Employment Standards, Administration Wage and Hour Division, Washington DC 20210. Speak to your local CPA about the required Department of the Labor sign and poster requirements.

The Small Business Administration (SBA) is a federal program set up to help small businesses obtain financing, usually through private sources. Speak to your local CPA about the feasibility of the SBA assisting your business. The SBA website is sba.gov.

You can request a report from a search company that will check records in the US Patent and Trademark Office, state registers and various other business sources. There usually is a fee for this service. Some companies are: CSC, The US Corporation Company, 1090 Vermont Ave NW, Washington DC 20005, 800 241-6518 800 241-6518. Thomson and Thomson, 500 Victory Road, North Quincy MA 02171-3145, 800-692-8833 800-692-8833. The US Corporation Company, 1090 Vermont Ave NW, Washington DC 20005, 800 241-6518 and Thomson and Thomson, 500 Victory Road, North Quincy MA 02171-3145, 800-692-8833.