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What Motivates Entrepreneurs to Start Small Businesses? by @DeborahSweeney

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Entrepreneurship isn’t for the faint of heart. Starting a small business means that you get to pursue your passion, but must also make sacrifices, like careful budgeting and working more hours outside the traditional 9-5 schedule, to reach your goals. However, this investment of time and energy does pay off as more and more individuals turn to entrepreneurship every year.

A recent report from Guidant Financial and the Small Business Trends Alliance (SBTA) takes a closer look at entrepreneurship in the new decade. Small Business Trends: 2020 surveyed more than 3,000 current and aspiring small business owners to uncover insights into what’s driving today’s small businesses. Data from the survey examines the demographics of entrepreneurs in 2020, including their age range, gender, and education backgrounds. It also takes a closer look at the industries entrepreneurs want to go into, challenges that they currently face, and motivations for opening a business.

Let’s go back to the last part of that sentence. What’s truly motivating individuals to explore entrepreneurship and try it on for size?

Ready to be your own boss

Since 2018, the Small Business Trends report has surveyed entrepreneurs and overall business climates. 2020 marks the year the most individuals surveyed said they were ready to be their own boss, at a whooping 55%. This compares to previous surveyed years 2019 (26%) and 2018 (49%).

How do you know you have what it takes to be an entrepreneur? A few traits successful entrepreneurs have in common include passion, resilience, innovation, and organization. Studies from the last few years have also shown individuals possessing emotional intelligence, including personal and social competence, tend to be the top performers.

There’s a popular saying that essentially sums up if you must ask where things are going, you already know the answer. Let’s use the example that you find yourself investing a lot of time and energy into a flourishing side hustle on top of working a less than fulfilling 9 to 5 job. You’re focusing on certain nuts and bolts of the hustle, like drafting a business plan and putting aside funds, that will help it keep growing and succeeding. This hard work may be leading up to making that side gig your full-time career. You’re ready to take the leap forward and be your own boss.

Growing desire to pursue your passion

The surveyed results for this motivator option have fluctuated a bit in the Small Business Trends report. 45% of surveyed individuals agreed in 2018. This number dipped to 23% in 2019 and rose back to 39% in 2020.

Passion, as mentioned earlier, is a major factor in determining whether entrepreneurship is a fit for you. Pursing your passion means going on a transformative journey. You must be willing to do it, ready to invest the time and energy, and stay motivated enough to keep going through the good and bad moments alike.

What happens if you find your interests start to splinter into several fields? Maybe you started a PR consulting company where you provide public relations strategies and initiatives to clients. Business has been going great, and you have another emerging side hobby — baking. You love to bake and have even started a blog featuring your recipes that has a moderate, but growing, readership. Who says you need to stick to one field and never explore other industries? Why not pursue both passions and embrace serial entrepreneurship? Starting one successful business may lead to a domino effect where you take another interesting hobby you’re passionate about and turn that idea into a startup. Let your passion — and original ideas — act as your guide toward entrepreneurship.

Opportunity presented itself

The Small Business Trends report notes that this option tied at 25% with “dissatisfied with corporate USA” in 2020. However, motivator did not tie with another option in the years prior. Opportunities continued to present themselves to aspiring entrepreneurs, with 19% surveyed in 2019 and 36% surveyed in 2018.

However the opportunity presents itself for entrepreneurs, it’s always a good idea to do your due diligence before moving fully forward. Once you know you want to turn your dream into a business, start by creating a business plan to act as the company’s foundation and outline goals to reach. Incorporate or form an LLC for liability protection. Register for any necessary trademarks and copyrights, obtain an EIN number, and file for required business licenses depending on the industry. Getting your ducks in a row puts you on the right path for running a small business successfully.

 

 

Deborah Sweeney is the CEO of MyCorporation.com which provides online legal filing services for entrepreneurs and businesses, startup bundles that include corporation and LLC formation, registered agent services, DBAs, and trademark and copyright filing services. You can find MyCorporation on Twitter at @MyCorporation.

Legal Steps to Closing a Business Before the New Year by @CorpNetNellie

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by Nellie Akalp

Did your business struggle this past year? You’re not alone. Statistics show 20% of small businesses fail in their first year, while 30% fail in year two, 50% fail after five years in business and 70% don’t make it past their 10th year in business. Business failure does not mean the end of your entrepreneurial dreams. However, before you move on to your next great idea, it’s important to follow the right steps to legally close your business. 

Closing a business legally is just as vital as starting one legally. If you don’t do it correctly, you could get in trouble with the federal and state governments, putting your business reputation and credit health on the line. Even if you’ve already closed down the business, you need to make sure you’ve processed the correct paperwork and paid any outstanding fees—by year end, if possible. 

Why? In the eyes of the government and the IRS, if you don’t follow the proper steps of business closure, you are still responsible for filing annual reports, filing state/federal tax returns, and maintaining miscellaneous business licenses and filings. You are also responsible for any fees associated with the inactive business. If you don’t pay those (perhaps because you think you no longer have to), it could lead to a bad credit score, which will only hurt you when it’s time to secure financing for your next business. Here are five steps to closing your business.

Step 1: Make a Unanimous Decision

If you’re a sole proprietor, the decision to close down a business is all yours. However, if you have any partners (even silent ones), own a corporation or LLC, you must get all co-owners and board members to agree to the business closure. The method for closing your business should be outlined in your operating agreement/articles of incorporation. Usually the process requires there to be a formal vote to close the business, signatures collected, and documentation made in the company’s meeting minutes. 

If the business is a corporation and you’ve issued shares, you need two-thirds of those with voting shares to agree on closure. If there are no shares issued, the board’s approval to close is enough. If the business is an LLC, the rules vary from state to state, so check your state’s requirements.

Step 2: File Paperwork

After the official vote for dissolution, you must file the appropriate forms with the Secretary of State’s office in the state your business was formed. These forms are called “Articles of Dissolution,” “Certificate of Termination” or “Certificate of Dissolution.” If you don’t complete this step, you are still obligated to file the required annual paperwork and pay the fees associated with the business. 

It’s also important to cancel any city registrations, permits, licenses, and business names. When you file the dissolution paperwork with your state office, the business name is automatically cancelled. However, if you’ve registered a fictitious business name (DBA) with the state, you may need to file a separate cancellation notice on the DBA. Canceling a trademark is a bit more complicated, but can be done through the United States Patent & Trademark Office (USPTO) or by using a third party company to do if for you. 

Step 3: Settle Your Debts

You are also responsible for settling all the company’s financial obligations such as paying vendors, employees, etc. Creditors have first rights to any residual assets and if you, as the business owner, pocket any money before paying creditors, you can be personally sued for the money. If you don’t have the money to pay off all the debt, you may have to file bankruptcy and let the courts settle the assets. Likewise, LLCs and corporations are required to pay off creditors before any money or assets are distributed to shareholders, although personal assets are off limits to creditors.

Step 4: Cancel Your Business with the IRS

You cannot cancel your IRS assigned Employer Identification Number (EIN)/Tax ID once your business has started operating. The number is forever and permanently linked to your business whether it is open or not. (If you were assigned a number, but never used it, you can write to the IRS and have it cancelled.) If the business is a corporation, you should file Form 966, Corporate Dissolution or Liquidation.

Step 5: File a Tax Return

Don’t wait for tax season to file your last tax return. File the final wage reports, report any capital gains and losses, submit employment tax returns, and be sure to check the box labeled “final return” on the forms so the IRS knows this is the final return and your business is no longer operational. 

Nellie Akalp is a passionate entrepreneur, business expert, professional speaker, author, and mother of four. She is the Founder and CEO of CorpNet.com, a trusted resource and service provider for business incorporation, LLC filings, and corporate compliance services in all 50 states. Nellie and her team recently launched a partner program for legal, tax and business professionals to help them streamline the business incorporation and compliance process for their clients.

File This Paperwork to Prep Small Businesses for 2020 by @DeborahSweeney

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Entrepreneurs are on the cusp of more than a new year. We’re approaching a whole new decade! How exciting is that? As small business owners say goodbye to 2019, it’s crucial that they enter the next decade in compliance. Forgetting to file or update outstanding documents could result in their business falling into bad standing with the state. Bad standing may result in penalty fees or worse, involuntary dissolution of the business.

However, bad standing doesn’t impact businesses that routinely keep up with corporate maintenance. File these three legal documents to stay in compliance and fully prepare your business to enter a fresh, new decade.

1. Update corporate minutes and bylaws.

Is your business incorporated as a corporation? If so, you may be familiar with corporate minutes and bylaws.

Minutes are notes that are taken during corporate meetings. Taking minutes ensures that the meeting’s purpose has been recorded and details important information. Should anyone need to go back and review their minutes, they’ll be able to easily find and reference these written records. Bylaws, on the other hand, are the written rules and regulations for a corporation. A corporation’s bylaws outline rules for adding and removing directors, the rights and responsibilities of owners, and guidelines for conducting and organizing meetings.

Updating corporate minutes and bylaws is a must before the year ends. Doing this does more than help keep your corporation in compliance. Staying on top of these details contributes to the overall success of the business. Thanks to well-documented minutes, team members have a thorough understanding of what they need to work on next. Both documents also work as tools to avoid conflict. If anyone has a question, they may refer to the corporate minutes and bylaws for clarity. Ultimately, updating corporate minutes and bylaws may lead to an increase in productivity. This added boost aids to your bottom line, especially if you’re starting 2020 with several New Year’s business resolutions!

2. File annual reports.

This is applicable to businesses that have filed as a corporation or LLC. Annual reports are filed yearly with your local Secretary of State office. An annual report documents changes and keeps the state updated on your activities. Some changes may include the names and addresses of members in the business, the business address, name and/or address of your registered agent, and changes in business activities.

Filing an annual report is a fairly straightforward process. You may already be used to doing it, if you have been in business for some time. Before you file, check in with your local Secretary of State for the official filing deadline. These vary on a state to state basis. Some vary depending on your entity formation. File the annual report by its respective deadline and pay the filing fee to avoid delinquent penalties. Remember to also note the changes in your bylaws or operating agreement for your respective corporation or LLC, too!

3. Complete a delayed filing application.

Do you want to start a business this year? Consider completing a delayed filing application. A delayed filing allows you to delay the company’s effective date of incorporation.

Why would you want a delayed filing? Don’t you feel ready to incorporate now? There are a few benefits associated with delayed filings. If you incorporate in the final two months of the year, you will need to pay any additional fees associated with the business. You are also required to report and pay taxes with the IRS since the business has technically been in business for the 2019 calendar year. A delayed filing allows you to not just save money. Filing this paperwork in advance creates a more predictable start date for the business. While the state works on its processing and turnaround times, you may use this time to better prepare your business for its grand opening in the new year — and decade!

 

Deborah Sweeney is the CEO of MyCorporation.com which provides online legal filing services for entrepreneurs and businesses, startup bundles that include corporation and LLC formation, registered agent services, DBAs, and trademark and copyright filing services. You can find MyCorporation on Twitter at @MyCorporation.

Business Entity Refresher Course by @CorpNetNellie

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by Nellie Akalp

Choosing a business structure affects your business’s ability to get credit and obtain funding. It also offers you personal liability protection and affects your tax status. In other words, there’s a lot you need to know to make sure you’ve chosen the best entity for you and your business. Here’s a quick refresher on what you need to know. 

Choosing a Legal Structure

Sole proprietorships are the most prevalent legal structure in the U.S., mostly because they are the cheapest and easiest to form and require a lot less paperwork than any other entity. The proprietor controls the business and any profits pass directly through to the owner. When tax time rolls around, all income and expenses are reported on the owner’s personal tax return; income tax rates are based on personal tax brackets. Sole proprietorships must still pay into Social Security and contribute to Medicaid. The biggest downside to the sole proprietorship is the lack of protection it offers; the owner is personally liable for all debts and lawsuits. 

Partnerships are similar to sole proprietorships, but with at least two owners (the partners) responsible for the business’s liabilities and debts. Partnerships also retain pass-through taxation. Partnerships should have an agreement detailing owners’ responsibilities, decision-making powers and what happens in case the business dissolves. 

Corporations offer personal liability protection, unlike sole proprietorships and partnerships. In addition, the Tax Cuts and Jobs Act reduced the corporate tax rate from 35 percent to 21 percent, which makes the C Corp legal structure even more appealing. The protection for owners and shareholders stems from the fact the business is a separate legal entity and all actions of the corporation belong to the corporation only. In other words, personal assets are not affected in case of a lawsuit. Corporations can also sell shares in their business and can go public.

S corporations’ profits and losses are passed through to the owners/shareholders for tax purposes; however, like C Corps, the owners’/shareholders’ personal assets are protected from liability. Both C Corps and S Corps do require a lot of paperwork to remain in good standing and must adhere to annual deadlines. Both must adopt bylaws, hold annual director and shareholder meetings, and keep meeting minutes with corporate records. 

Limited liability corporations, or LLCs, are popular because they offer protection from personal liability with less stringent requirements than an S Corp or C Corp. “Members” of the LLC can choose whether they want to be taxed as a sole proprietorship, partnership, S Corp or C Corp. In general, an LLC does not need to have an annual meeting nor a board of directors.

Not a U.S. Citizen? 

Do you live in another country, but want to start a business in the U.S.? Luckily, you don’t need to be a citizen or a resident to start a business in the U.S. Foreign entrepreneurs have only two choices of business structure for their U.S.-based business: The C corporation and the LLC. You cannot choose to form an S Corp in the U.S. because each S Corp shareholder must be a U.S. Citizen or permanent resident alien. You must pay taxes to the IRS on the income earned in the U.S. and must also pay an annual fee to the state where your business is incorporated.

Switching Entities

There are a few circumstances where you may want to change the legal structure of your business. You may decide you want more protection than that offered by a sole proprietorship. You may decide you want to take your business public. Perhaps you just want to take advantage of the new, lower tax rates offered to C Corps. Whatever your reason, switching entities is possible if you know the right steps to take. 

In general, going from a sole proprietorship to a corporation/LLC requires conducting a name search for the entity’s new name and filing the correct documents with your state, such as the Articles of Incorporation for corporations. You’ll also need a new Federal Tax ID or Employer Identification Number (EIN) from the IRS. Finally, you’ll need to set up a new business bank account with the new corporation’s name.

To change from an LLC to a C Corp, all members must first agree to the change in structure. Then, in some states you can simply file a document with your state called a “statutory” conversion, which officially changes your business from one entity to another. In some states, you need to create a new C Corp and then make the original LLC a subsidiary or a DBA (Doing Business As). The IRS considers changing from a C Corp to an LLC a monetary transaction, so you would need to sell the assets of the LLC to the new corporation and pay taxes on any assets that have appreciated in value. 

Choosing the right legal structure can make it easier to achieve business goals such as finding financing or reducing tax liability. Whatever legal structure you consider, get professional advice to determine what works best for your needs both today and in the future of your business.

Nellie Akalp is a passionate entrepreneur, business expert, professional speaker, author, and mother of four. She is the Founder and CEO of CorpNet.com, a trusted resource and service provider for business incorporation, LLC filings, and corporate compliance services in all 50 states. Nellie and her team recently launched a partner program for legal, tax and business professionals to help them streamline the business incorporation and compliance process for their clients.

Why Does My Business Need State Unemployment Insurance? by @DeborahSweeney

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Small businesses have no shortage of items to check off their initial to-do list. The journey begins once they have incorporated or formed an LLC. Then, they must look into registering trademarks, obtaining employer identification numbers (EINs), and getting relevant business licenses. Filing for state unemployment insurance might be a little further down that list, but that doesn’t mean small businesses should put off obtaining it.

However, if you don’t understand why businesses needs state unemployment insurance you might be less inclined to prioritize its filing. Let’s take a closer look at how SUI aids to small business growth.

What Is State Unemployment Insurance (SUI)?

Do you plan to hire employees to work for your business? Have you already hired employees at your profitable startup? Then you’ll need to file for state unemployment insurance, ASAP.

State unemployment insurance (often abbreviated as SUI) is an employer-funded tax program. SUI works to protect workers that find themselves involuntarily employed. Some examples of involuntary employment include the following scenarios:

  • Being laid off.
  • Being fired for reasons other than misconduct.
  • Being let go from a position due to health or personal problems.

Generally, the worker is at no fault for this type of employment. As the worker looks for new jobs, SUI provides them with short-term benefits through unemployment compensation.

Who Pays For Unemployment Insurance?

Earlier, I mentioned profitable businesses that plan to hire or have hired employees need to file for SUI withholding. Employers that have paid an employee more than $300 in wages are responsible for paying their state unemployment insurance.

It’s also not possible to avoid making these payments. Employers must submit their tax reports or tax and wage reports on a quarterly basis. What if your business has no paid employees during that quarter? You’re still required to submit the documents, and pay unemployment taxes on the employee’s state wages.

Do Self-Employed Entrepreneurs Need SUI?

Good question! Self-employed workers that have incorporated as a corporation or formed an LLC may pay themselves as an employee of the business. Others, like sole proprietors, may consider purchasing unemployment insurance as an additional safety net.

It’s recommended that you check in with your local Secretary of State before making any snap decisions. You can ask questions and learn more about the different laws related to the program.

How Much Will This Cost?

Paying for state unemployment insurance is not a one-size-fits-all situation across every state. SUI is run on a hybrid state-federal system where rates and maximum taxable wages are subject to change yearly. What employers pay in SUI withholding this year may not be the exact same as it was last year.

However, there is generally a state maximum wage up to which employers pay unemployment insurance. While they’ll report the full amount the employee made in their tax and wage reports, they will not need to exceed payments past that mark.

Because rates do fluctuate each year, it may be difficult to calculate rates for unemployment insurance. If you find this to be the case with your business, check in with the state for more information on their rate calculation process.

Should You Do SUI Withholding Yourself?

It is possible that entrepreneurs can maintain their own SUI withholding. More often than not, however, they tend to utilize the assistance of a third party filing service. They may choose this option based on the following reasons:

  • Maintaining SUI administration is a big responsibility. If you fail to maintain paperwork or respond to unemployment claims on time, your business could face expensive penalties.
  • SUI withholding is a time consuming process to keep up with in addition to day-to-day responsibilities.
  • Businesses that have frequent unemployment claims filed and associated with their companies face an increased tax rate. This could make for more complicated paperwork — and even more time and energy spent on it.

Luckily, there are plenty of professionals that can assist entrepreneurs with SUI filing services. Best of all, when you work with a professional you maintain a bit of peace of mind. Your business has not fallen out of compliance, and is on top of it when it comes to maintaining unemployment insurance.

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Deborah Sweeney – Legal Expert, CEO, MyCorporation.com – Calabasas, CA

As CEO of MyCorporation Business Services, Inc., Deborah Sweeney is an advocate for protecting personal and business assets for business owners and entrepreneurs. With her experience in the fields of corporate and intellectual property law, Deborah has evolved from lawyer to business owner. She has extensive experience in the start-up and entrepreneurial industry as she has been involved in the formation of hundreds of thousands of businesses for MyCorporation.com’s customers.

Ms. Sweeney received her JD & MBA degrees from Pepperdine University. She is active in the community and loves working with students and aspiring entrepreneurs. She serves on the Board of Regents at California Lutheran University and is a founding member of Partners of Pepperdine. Deborah has served as an adjunct professor at the University of West Los Angeles and San Fernando School of Law in the areas of corporate and intellectual property law. Ms. Sweeney is also well-recognized for her written work online as a contributing writer with top business and entrepreneurial blogging sites.  She is a regular contributor on Forbes, American Express, Social Media Today, and BlogHer among many others.

In her ‘free’ time, Deborah enjoys spending time with her husband and two sons, Benjamin (8) and Christopher (6). Deborah believes in the importance of family and credits the entrepreneurial business model for giving her the flexibility to enjoy both a career and motherhood. Follow her on Twitter @deborahsweeney and @mycorporation.

What Does It Take To Turn A Summer Side Hustle Into A Small Business? by @DeborahSweeney

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Summertime and the living is easy — especially when business is booming from your side hustle! If you’ve been running a successful summer side hustle for a few years now, you might want to consider spinning it off into a full-time gig.

What does it take to turn a side hustle into a thriving small business? It’s a much less intensive process than many entrepreneurs may realize, and follows certain step-by-step guidelines. Take a look at the best ways to prepare your side hustle to become its own year-round small business.

1. Draft a traditional or lean business plan.

You might have already created a lean business plan for your side hustle. If that’s the case, it’s time to add more details about the business. If you don’t already have a business plan, it’s also the time to draft one.

Most entrepreneurs choose to draft a traditional business plan or a lean startup plan. The format decided upon often depends on the needs of their business.

Consider a summer side hustle that has been around for several years. It has a proven track record of steady cash flow and offerings that continually appeal to consumers. As this side hustle pivots into becoming a full-time small business, a traditional business plan will provide an objective look into the company’s future.

A traditional business plan outlines the following areas:

  • Executive summary. The ability to explain who you are, what the business does, its industry, location, how it makes money, and why consumers want these goods and services.
  • Business description, concept, and strategy. What do your products and/or services do, and what makes them unique?
  • Industry analysis. A thorough analysis of your brand’s competitors.
  • Market analysis. A thorough analysis of your brand’s target audience.
  • Organization and management. The core responsibilities of your team members (if you have any employed).
  • Financial projections. Tables that provide information about cash flow, projected profit and loss, and a break-even analysis.
  • Financing request. A section specifically created for businesses seeking funding from investors.
  • Other additional information as it pertains to the company, like letters of incorporation and trademark registration documents.

A lean startup plan is a little less intensive, but covers these key areas:

  • Value proposition. A clear statement summing up the value your business brings to its market.
  • Key partnerships, resources, and activities. Information about any partners your business may have and resources that allow the business to create value.
  • Customer segments, channels, and relationships. The ability to define your target audience.
  • Revenue streams. How the business is able to make money.

2. Incorporate the business.

Incorporating a business, even one that starts off as a side hustle, provides the company with tons of valuable benefits. It allows you to build credibility much faster than businesses that do not incorporate, which shows customers that your company is legitimate.

Entrepreneurs may choose from a variety of entities to incorporate their side hustle turned small business. Some of these may include sole proprietorships, partnerships, corporations, and limited liability companies. LLCs, or limited liability companies, often tend to be quite popular with entrepreneurs. The entity is flexible in terms of management and also provides liability protection. This acts as a safeguard between personal and professional assets. In the event of an unforeseen circumstance, like a lawsuit, liability protection ensures that your personal property like cars and houses will not be impacted.

3. Register for trademarks.

Earlier I mentioned that trademark registration documents are generally kept in the appendix of a business plan. Chances are pretty high that your side hustle may have a unique name, phrase, symbol, design, or logo associated with it. This unique mark differentiates your business from competitors. However, if you do not register a trademark the unprotected mark may end up in the wrong hands and be plagiarized by copycats.

Kick off your plans to register your mark by conducting a trademark search. You may do this through the United States Patent and Trademark Office trademark database. This database provides more information as to whether or not another entrepreneur has claimed a mark similar to or the same as your own and if there are any pending marks. If it turns out your trademark is not available, you may need to go back to the drawing board in creating a new one.

However, if the trademark is available it’s highly advised to file a trademark application as quickly as possible. This allows you to register the mark for your business and have the peace of mind in knowing the trademark associated with your brand is exclusively yours.

4. File for any necessary business licenses and permits.

Every side hustle turned business is different with varying needs. Once certain side hustles become full-time businesses, they may require business licenses and permits to operate and remain in compliance. Check in with your local Secretary of State to determine which business licenses and permits your company is required to have by the city and state you do business in. These often vary, depending on the location and industry of the small business.

5. Conduct annual maintenance.

As your side hustle transitions into a small business, you may pick up even more legal necessities along the way like an employer identification number (EIN) and doing business as name (DBA). Remember that businesses incorporated as LLCs and corporations are required to file an annual report. This allows them to communicate any changes made in the business and stay in compliance with the state.

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Deborah Sweeney – Legal Expert, CEO, MyCorporation.com – Calabasas, CA

As CEO of MyCorporation Business Services, Inc., Deborah Sweeney is an advocate for protecting personal and business assets for business owners and entrepreneurs. With her experience in the fields of corporate and intellectual property law, Deborah has evolved from lawyer to business owner. She has extensive experience in the start-up and entrepreneurial industry as she has been involved in the formation of hundreds of thousands of businesses for MyCorporation.com’s customers.

Ms. Sweeney received her JD & MBA degrees from Pepperdine University. She is active in the community and loves working with students and aspiring entrepreneurs. She serves on the Board of Regents at California Lutheran University and is a founding member of Partners of Pepperdine. Deborah has served as an adjunct professor at the University of West Los Angeles and San Fernando School of Law in the areas of corporate and intellectual property law. Ms. Sweeney is also well-recognized for her written work online as a contributing writer with top business and entrepreneurial blogging sites.  She is a regular contributor on Forbes, American Express, Social Media Today, and BlogHer among many others.

In her ‘free’ time, Deborah enjoys spending time with her husband and two sons, Benjamin (8) and Christopher (6). Deborah believes in the importance of family and credits the entrepreneurial business model for giving her the flexibility to enjoy both a career and motherhood. Follow her on Twitter @deborahsweeney and @mycorporation.

 

Should You Incorporate As A Professional Corporation Or Professional LLC? by @DeborahSweeney

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When it comes to incorporating a small business, I generally recommend a broad range of legal formations to entrepreneurs. These entities often include limited liability companies (LLCs), partnerships, and corporations. Each entity provides liability protection, which ensures the separation of personal and professional assets. Entities like these are also ideal across industries and occupations. Most entrepreneurs, whether they’re opening a bakery, starting a consulting business, or setting up a clothing boutique, can easily incorporate their business and find that their chosen entity is a good fit for them.

What about entrepreneurs in niche-based industries, like doctors and lawyers? These types of entrepreneurs come with specific practices and licenses. Their businesses are subsequently structured a bit differently and as such, would need to incorporate as either a professional corporation (PC) or professional LLC (PLLC).

Sounds like this describes your current occupation? Keep reading as we dig into what each entity does and why they matter for these types of professions.

Professional Corporation (PC)

What does a professional corporation do?

A professional corporation is a legal structure designed specifically by state law to protect the personal assets of licensed professionals. The entity provides limited liability protection, much like that of a traditional LLC. Your personal assets will remain protected in the event of a lawsuit or other legal obligations.

How does a professional corporation differ versus a traditional corporation? Again, much of the answer is found in what the practice does and its licenses. Shareholders, directors, and officers must all be part of the same profession. Proof of good standing, such as their licenses, must also be provided in order to qualify as a professional corporation.

A professional corporation is an ideal entity for… Businesses that offer professional services that require state licenses. Typically, these include companies that participate in the following activities.

  • Medical services
  • Legal services and representation
  • Accounting and financial services
  • Architectural services

What kinds of professionals benefit from a professional corporation? Take a look at the list below to see if you might qualify to incorporate as a PC.

  • Lawyers
  • Physicians
  • Engineers
  • Doctors
  • Dentists
  • Optometrists
  • Accountants
  • Architects

Are there are any additional benefits to incorporating as a professional corporation (PC)?

One of the greatest benefits to incorporating as a professional corporation is protection from any negligence or malpractice of the practice’s associates.

Many professional services have more than partner and/or owner associated with it. Let’s use the example that a partner working for a medical service caused an injury. Even if it was accidental, there is a possibility that this partner could be the target of a lawsuit. What would happen to the other owners? Would they also be at fault for what the partner caused? No. The professional corporation would step in and shield the assets of the other owners.

Professional LLC (PLLC)

What does a professional LLC  do?

A professional LLC is necessary for professionals that work out of states where licenses are required in order to perform services. Much like a typical limited liability company, a professional LLC will separate a professional’s workplace and personal assets. A PLLC also limited personal liability for claims that are related to the negligence or errors of partners.

A professional LLC is an ideal entity for… Businesses that offer professional services that require state licenses. Sound familiar? All of the aforementioned companies, like those in the medical and accounting industries, may file for a PLLC. The same goes for the listed occupations, including doctors, lawyers, and engineers.

Should I know anything else about incorporating as a professional LLC (PLLC)?

One of the biggest benefits to incorporating as a PLLC is the ability to establish a professional identity for your business and its services. However, it’s important to research whether or not the state you do business out of has authorized PLLCs.

What does that mean? Essentially, you want to make sure that the state has given PLLCs the go-ahead to limit personal liability for claims related to a co-partner’s negligence, so one partner is not solely liable for these claims. Some states provide this legislation. Others do not. Before moving forward with this entity, it’s a good idea to check in with the state you plan to do business in to see if they are authorized to offer PLLC formations.

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Deborah Sweeney – Legal Expert, CEO, MyCorporation.com – Calabasas, CA

As CEO of MyCorporation Business Services, Inc., Deborah Sweeney is an advocate for protecting personal and business assets for business owners and entrepreneurs. With her experience in the fields of corporate and intellectual property law, Deborah has evolved from lawyer to business owner. She has extensive experience in the start-up and entrepreneurial industry as she has been involved in the formation of hundreds of thousands of businesses for MyCorporation.com’s customers.

Ms. Sweeney received her JD & MBA degrees from Pepperdine University. She is active in the community and loves working with students and aspiring entrepreneurs. She serves on the Board of Regents at California Lutheran University and is a founding member of Partners of Pepperdine. Deborah has served as an adjunct professor at the University of West Los Angeles and San Fernando School of Law in the areas of corporate and intellectual property law. Ms. Sweeney is also well-recognized for her written work online as a contributing writer with top business and entrepreneurial blogging sites.  She is a regular contributor on Forbes, American Express, Social Media Today, and BlogHer among many others.

In her ‘free’ time, Deborah enjoys spending time with her husband and two sons, Benjamin (8) and Christopher (6). Deborah believes in the importance of family and credits the entrepreneurial business model for giving her the flexibility to enjoy both a career and motherhood. Follow her on Twitter @deborahsweeney and @mycorporation.

Empowering Women Going through Relationship Challenges: The Untold Stories of Divorce Coaching by Lilly Parks of @naked_recovery

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by Lilly Parks

The good news is that the divorce rates in the US have started dropping since 1990, and have followed a downward trend since then. And thanks to millennials who are doing things differently, the rates will likely continue to decline. This is according to a sociology professor at the University of Maryland, Philip Cohen, in his analysis of the American Community Survey (ACS) data.

Still, the divorce coaching industry is thriving, but not for reasons that you’d normally associate with it.

Divorce coaches make a living out of helping people, cope with the breakdown of a relationship. They also empower these men and women to become better. This makes divorce coaching a rewarding business, what with a bigger cause behind it. But the real reason that lawyers work with divorce coaches is that they’re the ones who take care of the non-legal work that lawyers and their legal staff generally don’t do.

It’s easy to associate divorce coaching as something similar to therapy, which is not exactly far off. But these independent third parties provide more than just encouragement, guidance, and motivation. Their work also covers pre-divorce, during a divorce, and after divorce.

The roles divorce coaches play

Before a divorce
● Assess a marriage to identify if there’s still hope to work on the marriage or if a separation or divorce is the only solution
● Assess the counseling needs of parents and children
● If the decision to get a divorce is final, prepare clients for the upcoming journey
During a divorce
● Help clients work through their financial and personal needs
● Encourage sound decision-making by providing clear information about the divorce proceedings to clarify thoughts and concerns
● Help a client build a personal support system

After a divorce
● Help set goals for the future
● Share the positives of divorce based on their own experiences since some divorce coaches have gone through divorce themselves

How divorce coaching helps and empowers women

● Hand-holding

While your friends and family can provide support, relying on them comes with its own emotional baggage. Family members could be pushing you to take your ex to the cleaners or suggest many ways that you can hurt the other party.
As an independent third party, a divorce coach can create a non-judgmental, patient, safe, and supportive environment for you to get down to what really matters without pressure. Emotions are also excluded.

● Overcome separation

And the emotional turmoil that comes with it.

Grieving the loss of a relationship is one of the many things that women go through following a breakup or divorce. A divorce coach will help you deal with the loss and then help you build your support system.

One of the first things they look into is the immense confusion you are experiencing and then help address your overwhelming emotions and fears.

Part of their job is to discuss major concerns, such as:
● How can you manage financially?
● What will happen to your children?
● How do you break the bad news to your children?
● How do you deal with co-parenting?

With a seasoned divorce coach, you will be able to navigate through the financial, legal, and practical challenges of divorce.

● Grow and learn

There are lessons to be learned following a divorce. But unless someone is guiding you to the right path, you may not see those important lessons. You could get stuck in the grief stage, never to move on from there. You could choose to use alcohol, drugs, and food to cope with the fallout rather than take good care of yourself.

The right divorce coach can help you appreciate the good side of such a horrific experience.
It is possible that you chose the wrong partner. You made mistakes that contributed to the breakdown of a relationship. By identifying what went wrong, you’ll know better next time.

● Help reboot and create a new life

After a divorce, the focus of coaches is to help a client establish a vision and goals for the future, both for the short-term and long-term.

This is how divorce coaching empowers women, especially women who experienced self-discovery and happiness following a relationship breakdown.

Short-term goals may include going on a divorce retreat to learn about mindfulness and meditation. Many women who went on a retreat post-separation came home with a new perspective. They got to know who they really are, which is the greatest gift you can give to yourself. Another goal is to travel a lot, which some women say has helped them re-evaluate their values in life.

A good example of a long-term goal is to live a healthy lifestyle. A study that appeared in the Journal of Women’s Health showed that 80,000 women became healthier after a divorce.

A divorce coach can help you set similar goals for yourself.

If you want to take back your power, you will find a guide and supporter in them.

Once you’ve rediscovered yourself, you can start building a new life, a new career, and a new you.

—————————————————————————————–

Lilly Parks is a Divorce Angel and part of the dynamic Naked Divorce team. She is committed to helping her clients find the path towards healing and has been providing assistance to those who are going through the difficult trauma of divorce for more than 5 years.

 

What Do Entrepreneurs Gain From Incorporating A Business? by @DeborahSweeney

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by  | Featured Contributor

Should you incorporate your business? Is it really necessary to incorporate if you want to run a business? As the leader of a business that specializes in document filing services, I hear the first question asked quite a bit by new and existing entrepreneurs alike. My answer is always a resounding ‘Yes!’ — and not just because it’s what I specialize in doing, either.

The second question is a little trickier to answer. In theory, you don’t have to incorporate a small business. Some entrepreneurs have side hustles that they choose not to incorporate. The reasons for this may vary. The gig, for instance, could be a side project you’re passionate about, but don’t make much money from or have a desire to expand into working on full-time. Another reason could be the incorporation process itself. This is often viewed as too time-consuming and boring to do… so entrepreneurs avoid doing it. However, entrepreneurs may not realize just how many benefits they’re missing out on simply because they chose not to incorporate.

Should you incorporate a business? Yes! Is it really necessary to incorporate? Also, yes! Let’s talk about all the great things you (and your business) gains from getting started.

Liability Protection

If you decide to form a limited liability company (LLC) or corporation for your business, these entities ensure that it receives liability protection.

What does this term mean, exactly? Liability protection maintains a separation between your professional and personal assets. If your business was delinquent on its debt, liability protection would ensure that personal assets, like houses and cars, were not impacted outside of the business.

Are there any entities that do not provide liability protection? The most prominent one is a sole proprietor. Many entrepreneurs incorporate under this entity due to its affordability. Acting as a sole proprietor also ensures that you, the business owner, are in control of the business. This kind of responsibility, however, means that any and everything that can happen — from accidents to product damages — holds you fully accountable. If the thought of unforeseen circumstances keeps you up at night, you may consider switching entities for liability protection.

Building Credibility

How do you feel after you’ve done business with a company that had an “Inc.” or “Corp.” in its name? There’s a bit of added trust that comes with shopping or investing with these types of businesses. Incorporating gives businesses an added boost credibility. This legitimizes the business, making it a win-win for both the company’s reputation and the trust customers are able to quickly establish with it.

Understanding The Structure Of Your Business

It’s not uncommon for an entrepreneur starting a business to ask themselves what type of business they want to own and operate. They have a pretty good idea of what their offerings will be and their given industry. What about the company’s legal structure?

Incorporating does more than provide liability protection, potential tax savings, and establish credibility for a small business. It also provides them with an entity that helps structure the company.

Let’s take a moment to compare and contrast what it means to incorporate as an LLC versus a corporation. An LLC provides a bit of added flexibility in its legal structure, such as the ability to choose an S Corporation as its tax entity. Forming an LLC is also ideal for small businesses that wish to stay small and independent. In the event that you choose to expand and would like to take the business public, you do not need to remain an LLC forever. You may change the entity to a public legal structure like a C Corporation when the time is right.

Corporations, on the other hand, are much more strict legal structures. Entrepreneurs that choose to incorporate as a corporation usually have big plans for their business, like raising capital, going public with an IPO, and expanding worldwide. A corporation would be the ideal entity for this kind of business structure. It allows entrepreneurs to accept money from investors, issue stock, and still keep the company protected through liability protection.

Incorporating Is Just The First Step!

Understanding the entity you want, and need, before incorporating your business ultimately provides it with a great foundation for success.

Don’t forget that you’ll need to check a few legal items off your to-do list after incorporating, too! Apply for basic business licenses that pertain to your company and its offerings, business insurance, an employer identification number (EIN), and any trademarks or copyrights necessary to protect your intellectual property.

———————————————————————

Deborah Sweeney – Legal Expert, CEO, MyCorporation.com – Calabasas, CA

As CEO of MyCorporation Business Services, Inc., Deborah Sweeney is an advocate for protecting personal and business assets for business owners and entrepreneurs. With her experience in the fields of corporate and intellectual property law, Deborah has evolved from lawyer to business owner. She has extensive experience in the start-up and entrepreneurial industry as she has been involved in the formation of hundreds of thousands of businesses for MyCorporation.com’s customers.

Ms. Sweeney received her JD & MBA degrees from Pepperdine University. She is active in the community and loves working with students and aspiring entrepreneurs. She serves on the Board of Regents at California Lutheran University and is a founding member of Partners of Pepperdine. Deborah has served as an adjunct professor at the University of West Los Angeles and San Fernando School of Law in the areas of corporate and intellectual property law. Ms. Sweeney is also well-recognized for her written work online as a contributing writer with top business and entrepreneurial blogging sites.  She is a regular contributor on Forbes, American Express, Social Media Today, and BlogHer among many others.

In her ‘free’ time, Deborah enjoys spending time with her husband and two sons, Benjamin (8) and Christopher (6). Deborah believes in the importance of family and credits the entrepreneurial business model for giving her the flexibility to enjoy both a career and motherhood. Follow her on Twitter @deborahsweeney and @mycorporation.

How divorce coaching empowers women following a relationship breakdown by Lilly Parks of @naked_recovery

by Leave a Comment

by Lilly Parks

The good news is that the divorce rates in the US have started dropping since 1990, and have followed a downward trend since then. And thanks to millennials who are doing things differently, the rates will likely continue to decline. This is according to a sociology professor at the University of Maryland, Philip Cohen, in his analysis of the American Community Survey (ACS) data.

Still, the divorce coaching industry is thriving, but not for reasons that you’d normally associate with it.

Divorce coaches make a living out of helping people, cope with the breakdown of a relationship. They also empower these men and women to become better. This makes divorce coaching a rewarding business, what with a bigger cause behind it. But the real reason that lawyers work with divorce coaches is that they’re the ones who take care of the non-legal work that lawyers and their legal staff generally don’t do.

It’s easy to associate divorce coaching as something similar to therapy, which is not exactly far off. But these independent third parties provide more than just encouragement, guidance, and motivation. Their work also covers pre-divorce, during a divorce, and after divorce.

The roles divorce coaches play

Before a divorce

  • Assess a marriage to identify if there’s still hope to work on the marriage or if a separation or divorce is the only solution
  • Assess the counseling needs of parents and children
  • If the decision to get a divorce is final, prepare clients for the upcoming journey

During a divorce

  • Help clients work through their financial and personal needs
  • Encourage sound decision-making by providing clear information about the divorce proceedings to clarify thoughts and concerns
  • Help a client build a personal support system

After a divorce

  • Help set goals for the future
  • Share the positives of divorce based on their own experiences since some divorce coaches have gone through divorce themselves

How divorce coaching helps and empowers women

  • Hand-holding

While your friends and family can provide support, relying on them comes with its own emotional baggage. Family members could be pushing you to take your ex to the cleaners or suggest many ways that you can hurt the other party.

As an independent third party, a divorce coach can create a non-judgmental, patient, safe, and supportive environment for you to get down to what really matters without pressure. Emotions are also excluded.

  • Overcome separation

And the emotional turmoil that comes with it.

Grieving the loss of a relationship is one of the many things that women go through following a breakup or divorce. A divorce coach will help you deal with the loss and then help you build your support system.

One of the first things they look into is the immense confusion you are experiencing and then help address your overwhelming emotions and fears.

Part of their job is to discuss major concerns, such as:

  • How can you manage financially?
  • What will happen to your children?
  • How do you break the bad news to your children?
  • How do you deal with co-parenting?

With a seasoned divorce coach, you will be able to navigate through the financial, legal, and practical challenges of divorce.

  • Grow and learn

There are lessons to be learned following a divorce. But unless someone is guiding you to the right path, you may not see those important lessons. You could get stuck in the grief stage, never to move on from there. You could choose to use alcohol, drugs, and food to cope with the fallout rather than take good care of yourself.

The right divorce coach can help you appreciate the good side of such a horrific experience.

It is possible that you chose the wrong partner. You made mistakes that contributed to the breakdown of a relationship. By identifying what went wrong, you’ll know better next time.

  • Help reboot and create a new life

After a divorce, the focus of coaches is to help a client establish a vision and goals for the future, both for the short-term and long-term.

This is how divorce coaching empowers women, especially women who experienced self-discovery and happiness following a relationship breakdown.

Short-term goals may include going on a divorce retreat to learn about mindfulness and meditation. Many women who went on a retreat post-separation came home with a new perspective. They got to know who they really are, which is the greatest gift you can give to yourself. Another goal is to travel a lot, which some women say has helped them re-evaluate their values in life.

A good example of a long-term goal is to live a healthy lifestyle. A study that appeared in the Journal of Women’s Health showed that 80,000 women became healthier after a divorce.

A divorce coach can help you set similar goals for yourself.

If you want to take back your power, you will find a guide and supporter in them.

Once you’ve rediscovered yourself, you can start building a new life, a new career, and a new you.

 

—————————————————————————————–

Lilly Parks is a Divorce Angel and part of the dynamic Naked Divorce team. She is committed to helping her clients find the path towards healing and has been providing assistance to those who are going through the difficult trauma of divorce for more than 5 years.