Definitely some good information here. For me I think I would definitely go LLC right away because I don't understand the advantages there could be for a very small start up to incorperate. If I am missing out on something here I would like to be filled in - I promise I'm trying not to be that ignorant :). Hope the best to all you!

Yes, as all the replies offer ideas on both sides, this is is the building foundation for your business. This is NOT something you want to cut corners on. Get professional help from BOTH your CPA, and a qualified tax/estate attorney before proceeding. Good luck on starting your own small business. Starting our Home Business was the best decision we ever made. Hats off to anyone who makes the plunge! Mary Jones Wellness Home Business Las Vegas, NV ---This post was edited to remove a commercial link. Read our discussion policies for more Community best practices.

As stated, an LLC may be a better option. Less filing requirements, etc. Plus, it will help you reduce your payroll costs. In a corp - you are employees of the corp and thus have to treat yourself as employees and the costs associated with that. Not so with an LLC that flows through. As to the cost - it really depends on how you go about it. You can file all the paperwork yourself in your state and I would think the filing fees are that high. You can also use companies that specialize in this industry to do it for you - might be a bit more expensive - but I don't think it will be - try legalzoom or similar companies. Regarding the annual taxes - let a CPA firm do them the first year to better understand what is needed - then do them yourself after that. Just my opinion. The rest you should be able to do just as you have done before.

The decision about whether to set your company up as a corporation or an LLC or remain a general partnership depends on many factors.  The factors are generally your risk of liability, your tax obligations, your long-term goals, and your risk tolerance.  There is no one answer'.  That is why someone recommended talking to a lawyer.  Business laws are determined by state statutes.  So, what is permissible in Pennsylvania, may not be permissible in Mississippi.  Or more specifically, an LLC may protect a Pennsylvania business but may not protect a Mississippi business.  Incorporating your business involves more than just filing documents with the state.  In fact, deciding the best entity for your business is a crucial step. Sounds like you need some basic information.  If you are in a large city, then you can probably find several organizations that will provide free legal services. I know in Philadelphia, Law Works ( a division of Philly VIP) offers free legal advice to small businesses. So, I suggest that you search the internet to find your local legal aid organizations. Also, check with your local bar association. For example, in Philadelphia, the Young Lawyers Division of the Philly Bar Association hosts several community events, where lawyers give free, one-on-one advice to attendees. If all else fails, please read a book about how to choose the best entity in YOUR state. I like the books produced by Nolo Press. Your local Small Business Development Center will have many books about how to choose the best entity for your business in your state.   Good luck.  Sharmil McKee Business Attorney McKee Law Office Philadelphia, Pa www.MckeeOffice.com

Hi Missgrits, We published a blog, Should My Company be an LLC, an S-Corp or Both?, that provides helpful information about the pros and cons of each, so feel free to check it out. For relevant taxes and information specific to the state of Mississippi, you can take a look into Business Incorporation. Message Edited by Christine_Lai on 08-24-2009 10:38 AM

You should contact the secretary of state in mississippi in regards to becoming inc and if it is expensive then you can become incorporated in the state of Delaware which many business owners from all across the U.S have done. Then i would focus on building strong business credit.

Hi Missgrits, You can also take a look at the Mississippi Secretary of State for incorporation forms. Have you found these suggestions helpful? Let us know!

I  can imagine the people that your husband contracts with could read a book go online and try to build it themselves. Then they would never be quite sure if they built it correctly. Since you are building your business upon the foundation of a Corp. or LLC it might be sensible to rely on a professional.   After reading your posts and the replies I think that you should contact your accountant have her recommend an attorney bite the bullet and pay for a professional. It does not sound like you enjoy the details of paperwork.

Sound advice from everyone, particularly from Sharmil and Christine. It's important to understand that as long as you're operating as a sole proprietorship and you're not incorporated or formed as an LLC, your personal assets could be at risk. Choosing a business structure like a corporation or an LLC provides protection (in most cases) for your personal assets (house, cars, equipment) should your business be sued by another party. The threat of losing your home or any of personal assets to a potential lawsuit should motivate you to get your business formed as soon as possible, regardless of whether you decide on a corporation or an LLC. Message Edited by NicoleD on 08-28-2009 01:01 PM

As a follow up on siotw's post, I've recently been advised that it's not a good idea to have 100% of your corporate shares in your own name, which makes sense.