There is some confusion between what constitutes an LLC and what constitutes a corporation - indeed this exists to the point where many people still erroneously refer to an LLC as a "Limited Liability Corporation" where the "C" actually stands for "company". There are close similarities between a corporation and a Limited Liability Company, but it is the subtle differences between the two that are important for an individual or grouping trying to decide which suits their needs better. Within the subtle differences lies the reason for picking a corporation and not an LLC - or vice versa. If you wish to form a corporation, there are steps you should always follow.

1) A corporation will generally have a three-part name consisting of what are legally described as a "Distinctive element", a "Descriptive element" and a "legal ending". In the US, the legal ending for a corporation will, more often than not, be either "Inc" or "Corp". The distinctive element and the descriptive element are more variable. Assume for a moment that you are at the head of a company that makes cakes. A similar company operating within the same jurisdiction as you may already exist and go by the name "Sweet Cakes Inc.". For legal purposes, you should choose a "distinctive" element that differentiates you and them. "Suite Cakes Inc." would be considered too close. "Delicious Cakes Inc." would, however, be more than acceptable. The descriptive element is the same, because you do the same work. The distinctive element ... well, distinguishes you.

2) You should inform yourself of the corporate laws as they pertain to your own state. There are fifty separate US states, and corporate legislature is finalized at state level. Do not assume that because you have gone through the process before elsewhere you can just do the same in a new state. Not only could you be operating illegally, you could find that you are costing yourself money unnecessarily. Neither of these situations is one that you want.

3) In a corporation, it is always advantageous to own assets such as shares in another company rather than owning cash. Corporate dividends are 80% tax-free, so you can save yourself and your company a great deal of money in tax dollars if you invest sensibly. Additionally, there is no limit on the amount of loss you may carry forward to the next tax year as a corporation. A sole proprietor cannot claim a capital loss of more than $3,000 unless this is offset by capital gains.

4) Founding a corporation can be a good deal cheaper than founding an LLC. It is worth checking with the state authorities to see whether this situation applies to you. The difference may not be much, but it could be the difference between operating at a higher or lower level. It is for you to decide which step is for you, but taking legal advice on which method suits your needs is certainly a worthwhile step. It may save you a lot of money later on.

Disclaimer: This article is for informational and entertainment purposes only, and should not be construed as legal advice on any subject matter.

There are many good reasons for forming a corporation, if you are minded to do so. People tend to believe that a Corporation and a Limited Liability Company are all but interchangeable, and in many ways they are not too far wide of the mark. However, there are differences between the two, and it is in these differences that people find their reason for choosing one or the other. There may be many individuals who are leaning one way or the other - so here are some reasons why you should choose to form a corporation.

1) The protection of personal assets is a major issue for individuals entering into a business partnership. If, in order to raise money for the purchase of goods or services in the pursuit of creating the company, an individual chooses to cash in an asset, that is their choice. To risk it being lost at some indeterminate future point, however, is not a risk many are willing to take. You may only lose in the proceedings of a business collapse what you have put into the business yourself. In the same way, it is possible to put a personal asset into the ownership of a company and protect it from being seized if you yourself are the subject of a lawsuit or bankruptcy proceedings.

2) Taxation bears a lighter weight on a corporation than it does on an individual. If your income and many of your assets come through your company, they can be protected from the higher levels of tax. It is certainly something that necessitates close watching, and is a tricky balancing act to pull off, but it certainly benefits an individual to have this kind of flexibility in fiscal terms.

3) The permanence of a corporation is something that it has over a limited liability company. A corporation can continue indefinitely, and its identity is not defined purely by its membership. Although many people point to the greater flexibility of an LLC as being the reason to choose that way of operating, there are many who prefer a corporation because of its greater constancy.

4) An incorporation will have its own eligibility for credit, regardless of and unaffected by its owner's personal credit scores or that of its shareholders and directors. By using corporate credit in place of personal borrowing, it is possible to build a business credit rating which allows a far greater level of borrowing power and borrowing freedom. This can allow a company to make much bolder decisions and grow at a quicker rate.

5) Finally, there is a non-legal but equally persuasive reason for forming a corporation. The cachet connected with being able to add Corp. or Inc. after the name of your business really does cause your company to be taken more seriously. It may be a wholly cosmetic issue, but the mere fact of that shows that a lot of people will treat that as being the case - and for business purposes there is little difference between perception and reality.

Disclaimer: This article is for informational and entertainment purposes only, and should not be construed as legal advice on any subject matter.

Starting a new business can be fun and exciting, but can also be overwhelming at times. Use these step by step instructions to keep everything organized in your plan. If you follow some simple guidelines, do your research and take advice from experienced business owners, you can start up your own boutique and avoid many of the pitfalls that others fall into.

If you've decided to start a boutique, you probably already have the style in mind. Research your competitors to figure out what need you can fill and what makes you unique. Use these points to advertise, design around and order your merchandise. Make your uniqueness known to your customers so that you can maintain your competitive edge. Research prices, lighting, sound levels, unique pieces and other details to make sure that your boutique stands out like a rare jewel in the marketplace.

Most boutiques need a loan around $100,000 to get started. If you are taking out a loan from the bank, your business plan will have to be very precise and convincing to get the money that you need. Don't skimp on this step. You need to meet with a consultant to make sure your business plan is rock solid before you ever step foot in the bank. If you don't get the money that you need, consider starting an online boutique to raise the money to open your store. Raise awareness of your products using social networks. You can sell your items on auction sites as well as on your own site. Be creative in raising the money that you need!

Take care of the nitty gritty. Before you can have fun merchandising, setting up displays and decorating, you have to make sure that you have all of the necessary permits to conduct business. Set up your business as a limited liability company, a corporation, a partnership or a sole proprietorship. If you are the only owner, then a limited liability company can be the most flexible option for you. Essentially, you are liable for the value of the business and are not personally responsible for huge claims. In a sole proprietorship, you are accepting personal responsibility for the business. If you form a corporation, then you have investors and management who are all responsible for the business losses or gains.

Get your bookkeeping in order. There are a number of programs for boutiques to keep track of inventory, sales, payroll and taxes. Choose one that works for you and helps you to easily keep up with your finances. If you are starting a consignment boutique, use software that keeps track of who owns what article of clothing, dates, sale prices, amounts agreed upon and more.

Decorate with your own personal style in mind. Use interesting garment racks, window displays and art to set yourself apart from your competitors. Have fun, be diligent, make smart choices and you will be on your way to running a successful boutique.

So you have had it with the 9 to 5, your sick of your boss always looking over your shoulder, and the idea of you doing all the work so the executives can reap all the benefits makes you sick to your stomach. So you have decided to go out on your own and start a new business. That is a great idea and I am here to help you with some of the tougher questions that may come to mind.

What's next? Well you need to decide how you will structure your business for tax and liability purposes. If you do nothing, and start the business alone, you are considered a sole proprietor. If you do nothing and start the business with someone else, that business will be considered a partnership. You can also form a corporation or limited liability company (LLC). The last two options are a bit harder to set up, but the liability is passed on to the business and not yourself or your partners. You should seek the advice of an accounting expert before making this decision; once the decision is made it is difficult to change the company type and it's an accounting nightmare.

Sole proprietorship and partnerships are taxed on your normal 1040. You figure out how much money the business brought in and how much was spent on the business. This is the number you add to your 1040. This option is very easy for taxes very easy to run. The main problem with sole proprietors and partnerships is you can become personally responsible for all debt and damages. For example, if you run into credit problems with your suppliers they can come after you and your partners for payment. Also, any damage that your company may cause and is unable to make restitution for could become your personal financial obligation. This includes liens on personal property.

To distance yourself from personal liability you need to form a corporation (INC, C, or Corp) or a limited liability company (LLC). Both of these allow the business to become a separate entity for tax purposes and liability. The downside to these types of businesses is the extra paperwork needed to stay compliant and start up costs. You can search the internet for companies that will form your corporation or LLC, but you need to make sure they are reputable and not online scams.

If you start a corporation or LLC you will need a tax expert that specializes in small business and good accounting software. The government will send you an Employer Identification Number. This is the company's unique id number, think of it like your social security number. This number needs to be used on all documents pertaining to the company, as well as all tax forms.

All parts of the business must to be kept separate from your personal life. You need different bank accounts, different phone numbers, and different credit cards. Next to making a profit this will be your biggest and most important challenge. If you mix funds or you are sloppy with book keeping, the corporate veil can be pierced and that means you can become personally liable for the company and its actions.

I recommend a good CPA and a lawyer. These can be found online within your area and are well worth the upfront money. After you are set up it is possible to do all the taxes and accounting yourself with powerful accounting software, but this is time consuming and may not be worth it to some. Remember starting a new business can be fun and rewarding; just stick to the rules and laws.

Here are nuts and bolts tips for some basics to get your consulting business up and running fast.

* Form of Business. Depending on the type of consulting business that you want to operate, you may wish to run the business as a "sole proprietorship" or as a legal entity such as a corporation, legal partnership (such as a limited partnership or "LP"), or a newer type of entity called a limited liability company (also known as an "LLC"). You should talk to a lawyer or accountant for advice on choosing the form of your business. There are also online services that can help you form a corporation, partnership or LLC.

* Liability Insurance. You will want to obtain basic commercial general liability insurance to cover personal injuries or property damage caused by operation of your business. This type of policy also may cover loss or damage to the contents of your office (such as loss of a personal computer). You may need a commercial insurance policy even if you are doing your consulting work from home. In addition, certain consultants may need to obtain malpractice or errors and omissions ("E&O") insurance. E&O insurance can be more expensive (e.g., more than $5,000 per year). Ask a commercial insurance agent for advice and quotes for rates.

* Health Insurance. Insurance for health issues is often a hurdle for persons leaving a job to become an independent consultant. With some research and planning, this should not be an obstacle. You may need to obtain your own health insurance policy, or rely upon the health insurance of your spouse. Consulting firms that have employees generally can purchase group insurance plans. For details, talk to a local health insurance broker or search and compare health insurers and plans online.

* Office. Your choice of an office will depend on the type of clients that you have and what you need to provide services to them. Many consultants today do not need an expensive office. They just work from home, because most of their work is done by telephone, by computer, or with on-site visits to clients. However, think carefully about whether you are suited to working at home or in a small office with no one else around. Compared to a traditional job environment, this can be very freeing, or very lonely. Also, pets and young children can be noisy at home. You might want to share an office with other consultants or business people, or rent an office from one of the many "turn-key" temporary office providers.

* Business License. Your town, city or county probably will require you to obtain a business license for a modest fee. You need to decide on the location of your office in order to get the license. In addition, if you are in a regulated profession (such as lawyers, doctors, or architects) or industry (such as finance, real estate or mortgages), you may need additional professional licenses or certifications.

* Consulting Contract. Using a written consulting contract is essential to protect you and your business from liability and misunderstandings, and to help you get paid for your work. Most consultants can get by using form contracts prepared or reviewed by a lawyer. They then customize the business terms and project description for each specific client. Pricing can be on a time-and-materials, fixed fee, or even commission or contingent fee basis. It is also important to protect your rights to your work, so that you can reuse it in other projects or for other clients as needed.

* Finances. This is another hurdle for new consultants, but it shouldn't be. For a small consulting business, there is little capital investment and no inventory, so finances are fairly simple. Software or online services can be real time-savers, and help you delay or avoid adding staff. Some consultants use spreadsheet software, while others will use accounting software. These permit simple tracking and billing on a time or project basis. If your consulting practice requires detailed tracking of lengthy time sheets or numerous fixed fee projects, you may want a more powerful (but more difficult to learn) time tracking and billing program. Other consultants will prefer a traditional bookkeeper instead of using software.

Use these tips to help you plan your consulting business quickly and get it off to a fast start.

Choosing a right structure of new company is a vital decision that needs detailed analysis of pros and cons of each available option in terms of your current and future business needs. Before we start working on forming a new corporation, let us have a quick glance on pros and cons of Corporation.

Pros: The owner has limited legal liability. Corporate structure attracts more investors and that offers effective capital management options. Under the corporate structure, each group has clearly defined role and responsibility. With income splitting, you can reduce the overall income tax by taking advantage of lower corporate tax rates. On the first $75,000 of the corporate income, the corporate tax rates are typically lower than the owner's personal income tax rates.

Cons: Compared to other options, forming a corporation is expensive and time consuming process. All corporate formalities need to be observed in totality that means you have to be very organized at all times. Under the traditional corporations you have the disadvantage of double taxation - meaning the corporation pays taxes on its profits and stock holders also pay taxes on dividends. You can of course eliminate double taxation with S Corp option.

Now if you have decided that Corporation is the right choice for you, let us talk about how to form a corporation. You can form a traditional Corporation or Sub Chapter S Corporation. Pros and cons of these options need careful review and consideration. In many States, people who are in the occupation of doctors, lawyers, or accountants can incorporate their practice only through a Professional Corporation.

Here are the steps to form a Corporation:

* Choose your business name according to State rules. Some States need you to include word like Incorporated or Corporation at the end of your business name. Please try to choose a name that has some kind of relevance with the nature of your business. This helps marketing later on. * Check with the State that your proposed business name is available. * Register your business name and fictitious name for DBA purpose. * Register your business as Foreign Corporation in all other States where you plan to operate. * Decide corporate structure for your Corporation. Generally this structure has three main categories: Board of Directors, Corporate Officers, and Shareholders. Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, and Secretary are the best examples of Corporate Officers. The roles and responsibilities of these groups also need to be clearly defined through various legal documents. * Prepare, sign, and file your Corporation's Articles of Incorporation. Generally this contains some basic information of your Corporation like name and address, corporate purpose (business activity), name and address of Registered Agent, Stock information like number of authorized shares, type & class of shares, and value of each share etc. You need to pay filing fees to the State when you file your Articles of Incorporation. * Prepare Corporate By-Laws for your record. You don't have to file this with State. * Prepare Shareholders Agreement to manage future issues related to buy-out or buy-sell situation. * Elect "S" Corp tax status if necessary. * Hold first meeting of Board of Directors and start maintaining minute book. * Issue Stock Certificates to stock holders. * Obtain business license and permits for your Corporation from Federal, State, and Local agencies. * Make sure to follow all legal requirements to run your Corporation.

You might want to check our quality start-up services. We encourage you to visit our website to learn more about how to incorporate your business.

Offshore Service Provider Scams - We are writing this to warn people about deceptive marketing and advertising practices common in our industry. There are people who are not attorneys taking advantage of those not familiar with the offshore industry. We believe after reading this page you will be much more educated about making an informed decision as to how to proceed with your offshore asset protection structure.

Offshore Service Provider Deceptive Pricing - This is an old take off on "hook them in with a low price". The auto dealers used to do this many years ago. They would advertise a car that they ordered from the factory without a radio, without air conditioning, without power steering, without power windows and without an automatic transmission. The factory would reduce the price of the car because all these options were deleted from the base model car, in other words they deleted the standard equipment to get the car at a reduced cost. Then the car dealer would advertise this car in the newspaper at a low price and when the people came in to see the car of course they would not buy it, it was not really a complete car. Most of the people would not be able to even turn the steering wheel without power steering. They would sometimes leave the store angry and others would wind up buying a "real" car at much higher prices which is what the dealer wanted.

This is exactly what is going on with many of the sellers of corporations and foundations. The corporate agents advertise a price and leave many of the required features out of the price structure for the corporation or foundation. If you add in all the things you need to make the asset protection structure anonymous and functional, the price is no longer a discount at all. Would you want to trust someone with your asset protection structure who does this to sell you something? I wouldn't! Going to a non-lawyer corporate agent for your asset protection structure to save a few dollars is penny wise and pound foolish.

Panama Corporation Deceptive Pricing Scams - Before we begin you should know that only a Panama Attorney can form a Corporation in Panama. This means a non-attorney reseller is buying your asset protection structure from an attorney who never meets with or communicates with his or her actual clients. Does that make you feel warm and mushy inside when you are thinking about your asset protection structure?

If you are forming a Panama corporation you want all the corporate documents including a translation in English, a resolution from the board of directors to open a bank account because without this no Panama bank will open up a bank account for your corporation, a general power of attorney, stock certificates, minutes and most importantly three nominee directors. Without the three nominee directors the corporation will not be anonymous and that sort of defeats the value of the Panama Corporation. The Panama annual fee for the corporation is currently $300 and is included in all of our fees start-up and ongoing annual fees starting in year two. Some sellers love to leave this fee out and treat it as an add-on when it is mandatory. Go to our prices page to see a breakdown of what should be included in fees.

Offshore Corporation Deceptive Practices - Many offshore corporation sellers offer bearer share corporations from different jurisdictions. Panama bearer shares do not have to be kept anywhere in the world and the share certificates themselves can be made out in blank. The person owning the share certificates controls the corporation. In most of the other bearer share issuing jurisdictions the bearer shares need to be kept with the corporate agent in the country of formation and must have the names of the owners on them. This sort of defeats the purpose of bearer shares and of course ruins the anonymity. In Panama the owner of the bearer share corporation never has their name appear anywhere, not in any public registry, not in any database and the government of Panama does not even know who the owners are of a bearer share corporation or a foundation. There is no requirement to report the transfer of the shares to any other entity in Panama. Panama still does it the old way and has not sold out with tax treaties to keep their tourism business going. Panama has precious little tourism and most of what it has is from other Central and South American countries.

Panama Foundation Pricing Scams - Once again only a Panama attorney can form a Panama Foundation so if you are dealing with a non-lawyer corporate agent you are never meeting or communicating with the attorney who did your foundation. This is not a good thing. The Panama foundation to be anonymous needs to have three nominee council members and these are often omitted. This is like leaving the power steering off the car. Foundation council members like corporate directors do appear in the public registry and you do not want friends, associates, relatives etc. appearing in the public registry of your corporation or foundation. The annual fee for the Panama foundation paid to the government is $300. We include this fee in all of our prices start-up and subsequent year annual fees starting in year two. We also include a resolution signed by the nominee council members to open a Panama bank account. You also have a chance to communicate by email, phone or in person with one of our attorneys to create a letter of wishes. This is a secret document that details how your foundation assets are to be dealt with in the event you are incapacitated temporarily or permanently, and what happens with your foundation assets in the event of your death. Things like the simultaneous death of you and your next heir will be covered which could occur with an airplane or auto crash. We also create a Foundation Protector document if you wish to use a protector which is popular. You have direct communication with an attorney that is assigned to handle your asset protection structure that you can call and ask "Your Asset Protection Attorney" questions. We rest our case.

Panama Bank Account Scams - Many non-attorney corporate agents sell a Panama corporation which they buy from a Panama lawyer and include a bank account. They use terms like offshore bank account, private bank account, secure bank account etc. They do not say Panama Bank Account because they most likely can not get you a Panama Bank Account. They prefer to send you to some other jurisdiction where anyone can get a bank account.

What they are really doing is helping you fill out the bank forms and send them in to some less than desirable jurisdiction. Usually the jurisdiction will be in numerous tax treaties and other privacy invading treaties. The banks will often have total assets of under $25,000,000. Their bank secrecy laws will be weak at best. They are using jurisdictions that used to be secure but have compromised their corporate and bank privacy in recent years and as a result of that are desperate for depositors and will deal with almost anyone including a non-lawyer corporate agent.

Panama banks need to conduct due diligence on their clients which is similar to the due diligence a lawyer is required to conduct. When we as a licensed law firm introduce a client to a Panama bank the bank is comfortable knowing that we already did our due diligence and are thus vouching for the client in this way. The lawyer in our firm representing you physically goes to the Panama bank with your file and gets the account opening started. We do the follow up until your account is open. As your law firm we can always intervene on your behalf with the bank. A corporate agent and a law firm are far from the same thing to a Panama bank.

Another issue is the Panama bank runs a credit check in Panama on the nominee corporate directors or the nominee foundation council members. Our nominees clear the credit checks just fine. Other entities may use nominees that for various reasons will not clear the bank credit check. We provide your corporation or foundation with a Panama bank account that has online banking including the ability to send international wire transfers and also has a secured Visa card or Visa debit card that will work online, in person and in ATM machines around the world.

Panama Stock Broker Scams - When we open up a stock brokerage account for a client it is with a Panama Stock Broker or a major European stock broker done anonymously. Many of these corporate agents say they will get you an offshore stock broker but do not say where. Be careful it can be in some unreliable jurisdiction where the privacy has long since been eroded by numerous tax treaties and other agreements with numerous countries. Panama Stock Brokers like dealing with a Panama Attorney for the same reasons as the banks.

Attorney Client Privilege - It is always best to have a licensed attorney do your asset protection structure. This way all of your communications are covered by attorney client privilege, which in Panama is very strong. If you are dealing with a corporate agent who is not an attorney there is no attorney client privilege even if the corporate agent bought the corporation or foundation from an attorney. The corporate reseller still knows who you are, has your identity documents, references, knows where you are banking etc and he can be subpoenaed to produce this information and he has no attorney client privilege to protect you.

Licensed Corporate Agents who have some protections under law in some countries (there are no such entities in Panama) are still a weak link in your asset protection structure. If some one want to get into your structure they can hire a local attorney to file a court case with some trumped up frivolous reasons to get your records and the corporate agent would have to spend thousands of dollars to go hire a lawyer to fight back and keep your records private. The chances of him doing so are slim and none. He might suggest you hire an attorney to fight back and suggest an attorney and you can only guess as to whether or not the bill will be through the roof because you are between a rock and a hard place.

A real law firm will on the web site state that they are a law firm or an attorney and have the name of at least one of the attorneys on the web site. Do not be deceived by official looking websites offering services from many different jurisdictions that are not attorneys. Generally this type of person is a nobody just an internet marketing company that buys the structures from the one selling them to him at the cheapest price. Be careful who you trust your asset protection structure to. Many people know how to make money but few know how to keep their money safe.

http://www.panamalaw.org

If you have ever seen the initials LLC after the name of a company, you may have wondered what it means. LLC, or limited liability company, refers to a form of business in which owners have limited liability. An LLC is a cross between a corporation, which has limited liability, and a partnership, which has tax advantages and greater flexibility than a corporation. A company with a single owner can benefit most from the LLC designation.

You can form a corporation or an LLC online at very reasonable costs that will save you money and problems in the long run. A properly run corporation or LLC protects the personal assets of owners from debts or court judgments against the company. If your business fails or goes bankrupt, for example, your creditors cannot force you to use your home, car, and personal financial accounts to settle your debts if the business is a limited liability company. Sole proprietorships and partnerships offer no such protections, leaving owners vulnerable to devastating personal losses if their businesses do not succeed.

You can incorporate your business or form an LLC in any state, whether or not you live there or conduct your business there. Small business owners, however, typically do it in their home states in order to avoid duplicate paperwork, costs, and regulation. That said, some states make the process easier and some make it more difficult. State regulations are subject to change, so it's important to check on them when you are ready to incorporate or form your LLC.

To incorporate you must file Articles of Incorporation or a Certificate of Incorporation with the state. States require Articles or Organization of a Certificate of Formation to form an LLC. Most states process filings in three to five weeks; most states will expedite the process for an additional fee.

You have the choice of filing yourself or hiring a company experienced in business formation to do the filing for you. Typical services include checking name availability, preparing Articles of Incorporation or Organization according to state statutes, forwarding Articles to the appropriate state agency for filing, and monitoring the progress of your filing. While professional filing services do cost money beyond the state-required fees, they can save you time and money by doing it right the first time. They know how to satisfy each state's requirements, and how to troubleshoot if need be. By handling the paperwork for you, professionals free you to establish and grow your business. And online filing makes it that much easier.

If you do decide to seek professional assistance, look for a company with significant experience forming corporations and limited liability companies. Look for companies with affiliation with the Better Business Bureau or other business associations. Steer away from websites that are unclear or difficult to navigate, and from services that do not specify their costs upfront. Look for services that stand by their work with a satisfaction guarantee. A website with detailed information about the process and the regulations is a good place to start.