Planning Week 8

Set Up Your Business Legally

You’ve worked hard to build up your retirement assets. Choosing the right legal form for your business helps you protect them.

This is one planning decision for which you need to call upon professional advise and assistance to complete.

Legal Form Selection & Registration

Legal Name

In Planning Week 3 you worked with the VI Support Team to complete a series of decisions and tasks related to creating an online presence for your company.

One of these tasks was to work with your VI coach to identify and register an appropriate website address for your company website (your domain name).

The domain name you selected has been registered and your website should be up and running located at that web address.

At this point in the Virtual Incubator Program you need to return to the topic of business name.

Now it is time for you to decide how you will legally identify your company.

Domain Name Versus Legal Name

More and more new businesses today are using their domain names also as their legal names. An example is our parent company, Bizstarters.com. Our legal name is Bizstarters.com LLC. We purposely chose this approach so that each time we send an invoice, company check or piece of correspondence the legal name reinforces our marketing brand name – Bizstarters.com.

But, you may choose to use another source for your business’s legal name. An example could be to use the beginning letters of the names of your children, Joanne and Bob, to create a legal name like JoBo Enterprises.

Before you can move forward to complete your planning work this week, you must finalize your choice for a legal name for your business.

How to Do It

At this point in your life, you’ve accumulated some level of retirement assets, likely in a 401(k) account or other deferred compensation account. You may also have investments in stocks and bonds.

You’ve worked hard to accumulate this wealth and we know that you want to do all that you can to legally protect these assets as you launch and grow your business.

Why LLC

We have consulted with a team of very experienced CPA’s to determine the optimal way to legally set up your company so as to provide reliable legal protection.

They have advised our startup clients to use the Limited Liability Company (LLC) legal form, which creates a legal identity for your business that is separate and distinct from your personal legal identity.

Should you find your company in a legal dispute, you have the piece of mind that others can only access assets clearly identified as being owned by your company. For most new businesses, this is usually the business checking account and possibly a money market account.

How We Register Your LLC

1. You choose a legal name for your business.
2. The VI Support Team assists in setting up a LLC legal form using this business name.
3. The VI Support Team assists you in obtaining a Federal Employers Identification Number (FEIN) from the IRS for the legal name and form you have set up.

Service Fee: The state filing fee and administrative cost for our online registration agent are included in your VI Program fee.

Great Online Resource

Learn more about the LLC legal form.

Opening Your Business Bank Account

We review setting up your business bank account during Planning Week 9-10. You should be aware that to open an account for a LLC your bank will likely require the following documentation that flows from this planning decision:

1. Legal proof of LLC registration (The VI Support Team will provide this).
2. Copy of the FEIN registration with the IRS (The VI Support Team will also provide this).

Tax Planning

A key reason why our team of CPA’s have recommended use of the LLC legal is that it both provides protection of your personal assets, and provides the most flexibility in choosing how the proceeds of your company will be taxed, both at the state and federal level.

Other legal considerations

1. We suggest ways to find a local business attorney.

2. And, we advise you to consider if you need special legal documents such as a client contract form.

Great Online Resource

Nolo.com offers a wide variety of articles, tips and resources pertaining to all aspects of small business law.

They also sell a line of specialized workbooks and guides on various aspects of business law, such as how to protect intellectual property.