MoneyMindedMoms: Starting a Business, Part 2: Registration

It’s time to kick off 2011 as an entrepreneur and start that new business you’ve envisioned. The sky is the limit ladies, but first: YOU MUST REGISTER YOUR BUSINESS!

Here’s the deal: If you do not register, you are personally liable for all debts and claims against the business. Unacceptable! You are a mother with a family to protect and are already taking enough risk striking out on your own. Forming a legal corporate entity will limit the risk of personal liability. You haven’t slaved away all these years to achieve financial security to lose everything in a lawsuit! Don’t leave yourself and your family exposed… Register!

Luckily, registration is a simple process and can be completed quickly – sometimes within a day! That said, you must do it right so consult a lawyer to consider some key issues, i.e.: (i) the right corporate entity for you (most likely an S Corp or LLC for tax reasons), (ii) where to register (usually your home state), (iii) what fees/taxes to expect, (iv) other filing requirements like whether to file an operating agreement (i.e., terms of a business relationship), and (v) whether a license or insurance is necessary.

These considerations vary depending on the state so professional advice is crucial. That said, almost every state has a website that explains in simple steps how to register and provides sample forms to create your entity (e.g. http://www.dos.state.ny.us/corps, http://corp.delaware.gov, http://www.corp.ca.gov). Your accountant can also create your business entity and might do it for free if you’re using them for taxes!

I remember when my law partner and I registered LaSasso Griesmeyer Law Group PLLC… We hashed out our operating agreement and, within 48 hours, we had a law firm! Sure there was much more to consider (which we’ll discuss next time), but we were in business and ready to live out our vision.

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