Join Dana Robinson for an in-depth discussion in this video Understanding corporate entities, part of Setting Up Your Small Business as a Legal Entity.
- The first question you might ask…yourself is why incorporate?…I'll discuss this in more detail later,…but the most fundamental reason…that people incorporate is because…it's thought to help diminish risk…by separating the business…from the personal assets of the business owner.…If it helps diminish personal liability,…why do some business owners not incorporate?…The reason that many small businesses choose…not to incorporate is because there are costs.…There's a cost of forming the entity,…there's an annual cost to maintain the entity,…There's a cost to have your accountant…file taxes each year for the entity.…
In my first business, the annual renewal cost…to maintain the corporation would have been…more than the cost of my insurance.…In California, the initial cost…of incorporating was about $100,…but there's a renewal fee of $25…plus an annual corporate tax of $800.…In addition to these costs, a corporation or LLC…will have to file its own tax return,…costing several hundred dollars in CPA fees.…Even without an attorney involved,…
DISCLAIMER: This course is taught by an attorney and addresses US law concepts that may not apply in all countries. Neither LInkedIn nor the attorney teaching the course represents you and they are not giving legal advice. The information conveyed through this course is akin to a college or law school course; it is not intended to give legal advice, but instead to communicate basic information to help viewers understand the basics of intellectual property.
- What is a sole proprietorship?
- Understanding corporate entities
- Exploring corporations and LLCs
- Choosing a corporate entity
- Creating an operating agreement
- Exploring incorporating examples
- Establishing an IRS tax ID