After Your Business is Formed, WHAT'S NEXT?
“Start a business that matches your personality.” - Marlary
Introduction:
There can be just as many questions after incorporating a business or forming an LLC. So, to help you jumpstart your new business and create the proper legal foundation, I’ve compiled a list of the ten most important steps to take after forming your business entity to Create a Strong Legal Foundation for Your Corporation or LLC.
1. Execute your Organizational Documents
A Corporation has Bylaws, and an LLC has an Operating Agreement. These documents define a company's internal governing rules. For example, a corporation's bylaws address how meetings are held, what votes are required to take action, how stock should be issued, the officers and their duties, etc. An LLC's Operating Agreement defines members' relationships and responsibilities, how membership interests can be transferred, how profits and losses are allocated, and more. Make sure you have a corporate or LLC binder with your bylaws or Operating Agreement (and other documents) safely inside.
2. Apply for an EIN Federal (Employer Identification Number)
An LLC or Corporation is its own separate entity (remember, an LLC or Corp can sue, be sued, get a loan…). As such, it needs its own federal tax ID number, also known as an Employer Identification Number (EIN). As an LLC or Corporation, you'll need this EIN to open a business bank account or file your business tax returns correctly. You'll need to get one now if you haven't already obtained an EIN during your formation process through our service. We will gladly assist with preparing and filing the necessary paperwork and obtaining your company's EIN for a minimal service fee. Click here to start: www.redeemservicesllc.com
3. Apply for Business Licenses, Permits, and Sales Tax Registrations
Remember that incorporating or forming an LLC provides the legal foundation for your business, and a business license gives you the legal right to operate your business. Most types of businesses require federal and/or local licenses to operate (the specifics will depend on your type of business and location).
Here at www.redeemservicesllc.com, We offer comprehensive business license service packages to ensure you're squared away with all necessary federal, state, county, and local business licenses and permits.
4. Get Business Liability Insurance Coverage
Creating an LLC or Corporation is an important step toward minimizing your personal liability. However, it's not a substitute for insurance. That's because a corporation or LLC won't protect you unconditionally from personal liability (for example, if your personal actions result in an injury, you can be personally liable). In addition, you will probably want to protect your business from personal injury or property damages in the event of a lawsuit. Insurance comes in different forms depending on your business needs, so you should discuss your specific business risks with an insurance agent or broker who's familiar with small business.
5. File any Fictitious Business Names (DBA Filings)
Suppose your company will operate under any variation of your official company name filed on your formation paperwork; in that case, you must file each variation's DBAs (Doing Business As), also called fictitious business names. You should have your Corporation/LLC file the DBAs, so they operate under the umbrella of your Corporation or LLC. And if you previously had a DBA as a sole proprietorship, you can cancel that DBA or let it lapse.
You can also file for DBAs if you're going to operate multiple ventures under the same company. For example, you can establish one main company (i.e., Susy's Corp) and then have Susy's Corp file multiple DBAs for each of the specialized brands (i.e., Susy's Soaps, Susy's Knits…). This way, each of the smaller companies can reflect the branding and name best for their specific market yet still enjoy the legal protection of the main holding company.
If your Corp/LLC will be conducting business under multiple names, simply call us today and let us file your DBA's for you in any of the 50 states for a discounted fee.
6. Open a Business Bank Account
You must create a separate business bank account to keep all business transactions separate from your personal transactions. This step will not only streamline your business accounting and tax reporting, but it's essential to maintaining the "corporate veil" that minimizes your personal liability. Most banks will require the business' formation documents, organizational documents, and an EIN to open the bank account. If you previously had a business bank account as a sole proprietorship or partnership, you'll need to close that account and then open a new bank account under the Corporation or LLC.
7. Apply for Trademark Protection
When you incorporate, or form an LLC, you prevent another company from filing under the same name in the same state. But, this is far different than federal trademark protection which can protect your name in all 50 states. By officially registering your trademark with the USPTO (U.S. Patent and Trademark Office), you'll help prevent others from choosing your name in the future (since there's a public record of your trademark), and it will be easier to bring a suit in federal court in case someone else does begin using your name.
8. Get your Documentation to work with Third Parties
If like most businesses, you plan on frequently working with third parties (employees, contractors, customers), you should get your paperwork to document each of these relationships. For example, you may want to have a non-compete form in place before hiring any employees. Or, you'll need an Independent Contractor Agreement before using independent consultants. Anticipate these needs and get these documents in order up front so they'll be ready to send and sign as soon as you need them.
9. Sign Agreements, Contracts, & Loans in the Corporation's name
Now that you have formed an LLC or Corporation, it is critical that you sign all important contracts under the official LLC or Corporation name filed in the paperwork.
10. Maintain your Corporate/LLC Compliance
Your work isn't done after you submit that initial paperwork. For both the LLC and Corporation, you'll need to keep up with state paperwork (typically on an annual basis). For example, you'll most likely need to file an Initial Statement of Information within your state and pay a small fee, and then continue filing an Annual Statement with the state each year. You'll need to keep up with your estimated taxes on allocated corporation or LLC profits and file the annual tax returns for the LLC/corporation with both the IRS and your state. Corporations will need to file their Annual Meeting Minutes for their board of directors and shareholder meetings.
As you navigate life after the incorporation or LLC formation process, remember that my team and I are here to help you! Thank you for choosing US Redeem Services LLC as your business filing service. We want to help you in any way we can as you grow your business. Please feel free to contact us with any questions or if we can assist you with your future business filing needs!
We Thank You for Your Business!
Contact us here for your next steps: www.redeemservicesllc.com
Other resources to help you get started with your business
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Considering that this is your first business, it’s safe to assume that you have limited knowledge of what goes into building a company. This is why having a business startup checklist helps.
