Whether you want to open a small business or a large corporation, there are many steps and expenses involved. To start a company, you must register your business with the state and get a unique identification number (EIN). You also need to choose a legal structure—like an LLC, S-corp or C-corp—and write corporate bylaws that outline how your company will be run. Then, you need to acquire any necessary licenses, permits and registrations.
A corporation is a separate entity from its owners, which means that shareholders can limit their personal liability for the company’s debts. However, this type of structure has more complex set-up and maintenance costs and higher levels of legal responsibility than other types of businesses.
In addition, a corporation must maintain an active bank account and file regular reports to the state. It must also have a registered agent in the US, which is a person or business that receives service of process notices, government correspondence and compliance-related documents on behalf of the corporation. Many people use a professional service such as a law firm or accounting firm to serve as their registered agent.
A limited liability company, or LLC, is a simple and flexible business structure that offers owners protection from personal liability. An LLC can save you money on self-employment taxes by allowing you to split income into salary and distribution, which the IRS taxes separately. A corporation is a more complicated and expensive structure, but it may be best for companies that plan to raise capital from investors or to grow into other markets. set up a company