The BizFilings blog covering business tips and trends.
New Year May Mean Time to Incorporate
Published on Jan 4, 2011
Read 'New Year May Mean Time to Incorporate' at 'Time to Start Up,' the small business blog by BizFilings.
As 2011 gets under way, borrowing among the country's small businesses is up, unemployment is expected to fall slightly for December, consumer spending is increasing and manufacturing activity is accelerating.
Accordingly, small businesses need to ask themselves a few questions: Is it time to start hiring? Should the marketing budget be expanded? If so, when? Should the company begin a more proactive social media presence? Is it time to get incorporated? If so, does the business need a registered agent service? What about corporation vs. LLC?
If small businesses begin to receive greater access to capital and outside investors - as they are expected to, thanks to initiatives such as the recently enacted Small Business Lending Fund - then it is important for owners to protect their personal assets through a business entity such as an S Corp, LLC, C Corp or other classification.
"The end of the year is a great time to think about the administration of your business," Charley Moore, founder and CEO of Rocket Lawyer, told Inc. magazine. "Think about your corporate structure and consider if incorporating at this time will give you a new year of different tax treatment, or protect your company as it goes into a new phase."
Determining what entity suits your small business is dependent on a number of factors including growth rate, investment, size of staff and assets - both liquid and illiquid. Owners should consult legal or filing experts to determine if the time is right to form an LLC or corporation.