Incorporation for Home Based Businesses

I’m just a small business; do I really need to incorporate?

It doesn’t matter whether you’re a fortune 500 company with thousands of employees or an individual operator of a home based business, Incorporation is the best way to protect yourself and your personal assets from the threat of lawsuits. Incorporation also carries the additional legal advantages of:

1. Reduced Taxes

2. Increased Privacy

3. Reduced Risk of Audit

4. Building Credit

5. Raising Capital

6. Enjoying Corporate Benefits

A corporation is a legal entity empowered by state statute which can be used for the benefit of its shareholders to act as a scapegoat, decoy, servant or friend depending on their needs. An entity you can control without being held liable for its actions.

If you operate a business of any size or are considering starting a business, establishing a corporation can provide a cost effective foundation to reduce your taxable income, protect your personal assets and facilitate estate planning in your best interest.

1. Tax Savings – Properly structured corporations can pay a fraction of what someone would pay in federal taxes on the same personal income and in some cases pay no State taxes. The variety of tax saving strategies that can be obtained through the corporate structure is vast including medical coverage strategies, retirement savings, after tax investments, insurance, travel, entertainment, real estate, recreational vehicles and more.

2. Asset Protection – Every day thousands of lawsuits are filed by individuals, lawyers and businesses looking for easy money. Using a corporation to shelter your personal assets from the potential liability of your business can provide safety and peace of mind.

3. Estate Planning – America’s wealthiest families have always known the advantages of careful estate planning. Properly structured within a corporation, estate benefits can be paid out without paying estate taxes. This can mean the difference between significant wealth to family survivors or significant wealth to the government forcing loved ones to sell the estate just to pay the taxes.

What State offers the best incorporation benefits?

The answer to this questions is best answered by a competent Attorney and Accountant based on your individual circumstances. However the following information should provide you with a good prospective from which to begin your discussions.

States with the most business friendly tax systems

According to the new 2007 edition of the Tax Foundation’s State Business Tax Climate Index,, “Wyoming has the most business-friendly tax system of any state while Rhode Island is the least hospitable to businesses. After Wyoming, the states with the most business-friendly tax systems for 2007 are: South Dakota, Alaska, Nevada, Florida, Texas, New Hampshire, Montana, Delaware and Oregon.” http://www.taxfoundation.org/files/taxwatch-fall2006.pdf

What is the best Corporate Structure

There are basically 4 types of corporation C, LLC, Close and S. Again, be sure to consult a competent business Attorney to decide what’s best for your business.

‘C’ Corporation – The c corporation is a legal separate “entity” which may live forever or be empowered to protect the shareholder from economic harm. It my own assets, sue or be sued, transfer its ownership easily, borrow money, mortgage its assets, and file bankruptcy. A board of directors and corporate officers remove day to day management from the hands of the owners (shareholders). Shareholders elect the board at shareholder meetings.

LLC - Otherwise known as Limited Liability Company (LLC) hase members instead of shareholders. It may elect to pass gains or losses, credits or deductions, on to the members of the LLC. An LLC status avoids the potential corporate problem of “double taxation.” Individual members may benefit from a reduction in their taxable income if the corporation operates at a loss. Despite their unique tax treatment, LLC’s maintain full corporate attributes like limited liability. If you are not sure about what type of corporation to start with, this would be the one to choose. An LLC can later be converted to a C corporation, much easier than converting a C to an LLC.

Close Corporation - The Close Corporation was created by an act of legislature especially for small corporations which have a small number of stock holders usually having ties to one another through family relationships or friends and business partners. Close corporations are special cases of regular business corporations electing to operate in a more informal manner likened to partnerships. Regular business corporations must conduct shareholder and director meetings, elect a board of directors, and provide shareholders with written proposals for any major corporate action to be voted on in the annual meetings. Family corporations usually do not hold annual meetings because the family regularly makes decisions around the breakfast table or wherever. A Board of Directors is also not required and so there is much less paperwork required for ongoing operations.

“S” Corporation – “S” status for a corporation is granted by the IRS to any regular business corporation or close corporation which meets specific criteria. Domestic corporations having 100 or fewer shareholders all of the same class who are citizens of the U.S. or resident aliens may elect to pass gains or losses, credits or deductions, on to shareholders in much the same manner as partnerships. “S” status avoids the corporate potential problem of “double taxation.” Individual shareholders may benefit from a reduction in their taxable income if the corporation operates at a loss. Despite their unique tax treatment, “S” corporations maintain full corporate attributes like limited liability and continuity of life. Whether a corporation is a regular “C” corporation or a close corporation, it may become an “S” corporation for tax purposes.

Whatever structure you choose and regardless of where you incorporate, your business and your family will benefit from a carefully planned and executed corporate strategy.

Antique Auto Insurance – Protecting Your Investments

Usually, when you buy auto insurance, you’re doing it to protect yourself on the road. However, when you have an antique car, you will need to buy special antique auto insurance to protect your investment. The problem with regular car insurance is that it doesn’t protect antique or collectible cars to the fullest extent. While you might have a classic worth over $100,000, you are only going to get current actual cash value from a regular policy, should anything happen. That means that while your car might be worth a lot in value, you will only get a portion of that when you have a regular auto insurance policy.

An antique car or a classic auto is an investment, and you need to make sure that you treat it as such and protect it in the way that it deserves to be protected. Getting a special antique auto policy will guarantee that your prized possession is protected at all times and for the full value that it is worth, rather than just the replacement cost based on current values. A ’66 Mustang might only have a replacement value of $15,000 today (or less), but it could be worth well over $70,000 because of the work and care put into it. That’s why you need a special policy.

Look at it this way. Auto insurance is for cars that you drive. You don’t drive classic cars. Antique auto insurance is for collectibles. That is what your coveted automobile is, after all, and you should protect it like the priceless gem that it is. Sure, you’ll probably pay more for a classic car policy, but you can guarantee that you’ll get much better coverage and the right types of protection for your baby.

Classic cars are a hobby for many people. Having the right coverage and being able to distinguish a collectible from a driving car is going to be critical to your success in making sure that your car is protected. In order to get the right antique auto insurance policy, you’ll need to speak with an insurance agent to learn about getting an appraisal of your car and choosing the best coverage for your classic or antique auto so that you are safe no matter what happens.

If you’re looking to find out more about antique auto insurance, or if you want a quote on your Pennsylvania insurance needs Williams Agency can help.

Work From Home Business Success – How To Achieve It?

How to make work from home business success real? Lately, many of us wish to quit our nine to five jobs and begin our home business. Still, whilst thousands, perhaps millions of us dream about it, very few of us are going to really do something about it.

Few brave ones that do make a go for it, have more than a few choices presented to them. Frequently you will have to choose between trying to establish your own business company, in whatever field you want, or to begin with an affiliate home based business. Both have the chance to be extremely productive if they turn up to be successful.

Every enterprise requires a lot of work, before you can enjoy any success in it, no matter the approach you choose. For example if you put in more effort and money you are going to see it repaid a lot faster. Then again, to run a usual business model calls for a great deal more of your time, effort and investment capital and furthermore caries larger amount of risk involved.

Competition and Product Creation

Starting your private business can often be very complicated. In case that you do not have a new concept that can be successfully marketed, you are going to have to confront many competitors.

You are going to be forced to design ways to draw away customers from the already entrenched businesses around you and over to yours. Should you succeed, the prize can be worth your time and the effort but if you fail you could end up losing everything.

Affiliate home based business on the other hand, provides numerous benefits here. Number one, you are advertising products that are already made, you do not need to manufacture your product. Recognized brands are easier to sell, specially if they have a good reputation. High quality products with good reputation will certainly attract customers much quicker than the products that are new and unknown.

Starting Capital

Becoming a sole proprietor is incredibly risky. If something goes wrong and your new business fails, as most of them do, your source of income has ended. Besides, depending on the debt total your business acquired and how you financed the venture, you might lose a good deal more than just your income.

If you however work from home as affiliate marketer that can of risks are almost non existent. You are paid depending on how well you perform. You do not have to be concerned on how the business is performing in general, as long as it works well for you.

Every month you are going to receive your commission based on the amount of products you sold. And should the affiliate program you are promoting suddenly crash or close down, you just change some text and links and change to a different one. Affiliate marketing businesses are usually well established so you should not worry about them going out of business all of a sudden.

Marketing Your Business

Advertising is important fragment of every business. When you are sole proprietor, advertising is going to depend only on you. You should have budget sufficient enough to hire an expert or set up a marketing campaign by yourself. First way will cost you money and the second will require equally your money and your time.

If you choose to work from home at affiliate marketing, the advertising is all that will be required from you. Generally you will be handed over all you should have for start. Product or service owners provide advertising material for free because it is in their best interest to help you out. If you are successful they will earn more money too.

Business Knowledge and Information

To conclude, you will need help and guidance when running a business. In case of old fashioned business, you are going to need to hire out experts for this. This is going to drive more costs for you. In case of affiliate programs, there should be a representative on board, you can get in touch with him or her and ask for help and information.

Having a business is difficult no matter how you slice it. Each option you take, will require a lot of work and dedication.

But, if you want to work for yourself, why not choose an option in which majority of the hard work is done for you already. With choosing affiliate marketing, the possibility of failure is almost completely taken away. This allows you to pay more attention to vital segments of your business, earning profits, improving your affiliate marketing business and enjoying work from home business success.