I was interested in registering a business name (Based in PA). I saw a form to register a Fictitious Name, and it cost $75 to file.
What I am trying to figure out is if I do that, will I then have to do all my taxes audits, record-keeping from that point?
I'm 19 and I'm doing a filming service in my area for profit, and starting out I'm doing some small family jobs under the table. If I register the name, will I have to then do all the legal stuff? Or can I register to 'reserve' the name until I can get together the startup funds?
If you check online with your PA gov. They should have a lot of
information for you. If you don't want to incorp right away at
least get your business established in your state for tax purposes.
Information on an LLc also can be checked out at IRS.gov just type it in
google. In my state, tax Id costs around $20.00. To get a federal
tax # and to get an LLC started, about $50.00
I would check your own state gov. first.
Good Luck
Starting a personal small business can be daunting. But my first recommendation is to incorporate PERIOD!. You can form an LLC. It will cost you about $500 (I think) to have someone else to do it but it's a must. If you can't afford that yet, then keep going the way you are for now. If you're concerned about the name, you need to do something to get it on record but most people overestimate the value of their business name to them and to others as they're starting. Unless you have an evil cousin that will steal your name, that may not be a consideration.
Once you've formed the LLC (done right with someone's help for the $500ish) you can take your income as a dividend draw. This way you don't have to deal with payroll which is the biggest hassle getting started. You also won't be in the Social Security system so start saving.
A Fictitious Name is good for an established business and is best used for other reasons.
Good luck!
Starting a personal small business can be daunting. But my first recommendation is to incorporate PERIOD!. You can form an LLC. It will cost you about $500 (I think) to have someone else to do it but it's a must. If you can't afford that yet, then keep going the way you are for now. If you're concerned about the name, you need to do something to get it on record but most people overestimate the value of their business name to them and to others as they're starting. Unless you have an evil cousin that will steal your name, that may not be a consideration. Once you've formed the LLC (done right with someone's help for the $500ish) you can take your income as a dividend draw. This way you don't have to deal with payroll which is the biggest hassle getting started. You also won't be in the Social Security system so start saving. A Fictitious Name is good for an established business and is best used for other reasons. Good luck!
Wow, Thank you for both of your posts! You're very helpful.
I am, however, still a little unclear about the LLC.
Are you saying that I would have to go to some sort of lawyer to get the name registered as an LLC? Or do I do it online? I'm not too sure about that.
And also, if I do splurge the $500 to get the LLC, with my profits, I still have to file them for taxes? What other legal implications does this bring me? I'm only 19, and I just want to get as much money as I can before I decide to go full force, because I'm still in school.
My main concern is that someone could take the name, or something close to the name where I would not legally be able to use it. I want to secure the name, without the taxes for now.
When I get more business experience (I.e. graduate college) I will probably start an establishment and do all the taxes and all. But I have a feeling that may not be possible/legal lol.
Again, I really appreciate your help woodencrates!
Wow, Thank you for both of your posts! You're very helpful.I am, however, still a little unclear about the LLC. Are you saying that I would have to go to some sort of lawyer to get the name registered as an LLC? Or do I do it online? I'm not too sure about that. And also, if I do splurge the $500 to get the LLC, with my profits, I still have to file them for taxes? What other legal implications does this bring me? I'm only 19, and I just want to get as much money as I can before I decide to go full force, because I'm still in school.My main concern is that someone could take the name, or something close to the name where I would not legally be able to use it. I want to secure the name, without the taxes for now.When I get more business experience (I.e. graduate college) I will probably start an establishment and do all the taxes and all. But I have a feeling that may not be possible/legal lol. Again, I really appreciate your help woodencrates!
You may want to look at this post here.
In general, unless there's something special, you don't get much benefit from forming a company just to protect the name. I've registered a business name and gotten a matching domain name before but I wasn't as stretched for cash as you probably were and I was, with good cause, considering that the company could be national quickly.
It may not be a cause to incorporate early but once you have a business you can write off just about anything if you know the rules. There's a fine like between tax avoidance and tax evasion but avoidance is legal and it can be a lot harder for small businesses to get started without learning some of the things you can do. I could write a book on them but honestly, you're probably better off getting a book on the subject. There are probably many.
Consider a company like LegalZoom or BizFilings online to create the business. I think it's the fastest and easiest. Don't buy the form kits, corporate seal, etc. They're all a waste of money. Also, you'll get pushed hard to purchase a Registered Agent service. I won't tell you not to purchase it but I don't.
Most any cost associated with starting or running your business is tax deductible and generally you get 5 years before you need to turn a profit. The business can't be an obvious hobby though and I wouldn't recommend writing off a home office. There are things that are red flags for the IRS and an audit would likely cost you a lot compared to the savings. Again, there's probably a lot of good books that cover real world do's and don't's for starting up a business.
The reason for forming the company is legal protection. If you have to close the business or get sued you want to protect yourself and forming an LLC puts a shield up between you and your business operations.
Being 19, I wouldn't rush things too much. Consider setting a goal to have everything in place and be 'small business educated' by the time you graduate. There is a lot to learn but it's much easier before you start doing business than after.
(If you appreciate the advice you can hit the 'Kudo's' button and give me a star ^_^ )
Good luck!
One more thing... You may want to look into the book The E Myth Revisited by Michael E. Gearber. It's essential reading for someone starting up a small business.
Message Edited by woodencrates on 07-04-2009 06:00 PM
Seeker | Window Shopper | 7/15/2009 - 4:55 pm
woodencrates | Creator | 7/3/2009 - 12:36 pm
dynamicf | Performer | 7/4/2009 - 4:44 pm
woodencrates | Creator | 7/4/2009 - 5:53 pm
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