Business Entities and Accounts

This is something that you will want to do as soon as possible to not only write off your expenses but also to protect yourself as an individual from business risks such as bankruptcy and lawsuits. This is a pretty easy process usually but there are some steps you may want to take to ensure you are starting the right type of business entity and structuring it correctly for whatever you are trying to do.

Steps to take.

- Find out what business entity you should use! Most likely if you are starting a new business you are going to want to simply start an LLC (Limited Liability Company) in your state. However, if you are unsure for what you are doing you can always contact a startup lawyer for this. If you do decide to go this route, try to avoid putting a large retainer up with your lawyer. Many times, lawyers will try to squeeze as much money out of you as possible but with this you can search for a startup lawyer online and if you just are looking to find out what entity you need and how to structure it, it should only cost about $200. It may not be necessary to do all this but once you do you can rest easily, knowing that your business is structured properly.

- Once you know what type of entity you need to set up for your business you can have the business entity created online for cheap. zenbusiness.com is a great place to have your LLC formed online. I would check out their site, but you can also just type in create LLC in whatever state or country you are in, and you should find some good places to go as well. Typically this part of the process will cost anywhere from $50-$300 for a simple LLC.

- After setting up your LLC you will want to open a business bank account as soon as you have your business paperwork back from whoever you used to create your business entity. You will need the EIN number for the business, which is essentially the tax id of your business as well as any other paperwork provided on your business and proof of your own identity if you are the business owner. Most banks will be happy to start a business bank account for you but if one says no for some reason just try another bank. TD Bank is great for business if they are in your area and Bank of America works great as well. Once you have your business bank account set up you will now be able to use your business debit card for purchases made for the business. This will allow you to write off these expenses come tax time and have all your income and expenses organized correctly from the start.