Focus CPA Group-(562)281-1040

Posts Tagged ‘Small Business Owners’

I’ve heard that one of the main banks offers help to small business owners with a business software package to help with accounts and stuff. Do you know which bank? What the software is? What does it do?

At some point of time, a sole trader or partnership will opt for business incorporation. The good news is that as of October, 2009, business incorporation in the UK is becoming easier and more profitable to companies.

Business incorporation – Pros

There are many factors that make business incorporation attractive to business owners. Low taxes and easier financial accessibility are noteworthy. Increased profits also play a part. Many small business owners have made considerable savings on taxes by minimizing the salary paid to owner and increase income through dividends, which attract lower taxes. Significant cash benefits may be derived from additional tax deductibles. For instance, entertainment and medical expenses, travel costs, recreational facilities and pension costs are all tax deductible.

The fact that business owners are afforded personal liability protection also adds to the allure of business incorporation. In case of a financial crisis (and we all know from recent experiences that a financial crisis can happen any time), creditors cannot confiscate the personal assets of the shareholders, directors or employees.

Add to this the credibility factor that results from business incorporation and you can easily see why more and more small businesses are becoming incorporated, even though many small companies may find that deriving the benefits of incorporation takes time.

Business incorporation – Cons

In case of limited liability, banks might need personal guarantees. So, there are restrictions on limited liability. Besides, small companies may even find that administering a limited company is somewhat costlier. So, unless there is a significant rise in pre-tax profits, it might make sense for small business to resist the lure of company incorporation. However, in case of a venture capital, incorporation is a must since capitalists will require an equity stake in the business, which is available only if the business is incorporated.

However, the Government has decided to make incorporation easier and more advantageous to business owners.

As of October 1, 2009:

Some of the forms that are currently used for incorporating will be changed or replaced.

The business incorporation process will become much easier and less complicated.

The practice of nominal or authorized share capital will be discontinued upon incorporation of the business.

Company naming will become more stringent.

Directors are now required to provide a different service address. After this, their personal address need not appear on any public documents.

The decision of business incorporation cannot be taken lightly even though the path to incorporation has been made easier. It is a major step and it needs a good amount of vital planning. The opinion of an accountant and other reliable resources is priceless when you undertake something as important as a business formation.

After deciding what type of products or services you are going to offer, the most important decision you will make in start a new business is the type of business structure to form. You will be faced with deciding whether to form a General Partnership, S-Corporation, C-Corporation, Venture Capital or Limited Liability Company. If you are starting a small or home business a Limited Liability Company or LLC is your best choice hands down.

A Limited Liability Company (LLC) provides you best of all Worlds, in that it is a type of business ownership combining several features of corporation and partnership structures. Unlike a general partnership, owners of an Limited Liability (LLC) have limited liability. Which mean an owner of LLC can not lose more than the amount he or she has invested in the company. Thus, the owner is not personally responsible for the debts and obligations of the company in the event they are not fulfilled. And, unlike a limited partnership, owners of a Limited Liability Company (LLC) do not lose their limited liability by actively participating in management of the business.

A Limited Liability Company (LLC) also have many advantages over the most popular business structure, the Corporation. The Limited Liability Company (LLC) and the S Corporation both have the benefit of pass-through taxation. This means that owners in the company report their share of profits and losses on each owner’s individual tax return. The IRS assesses no separate tax on the company itself. However, in the C Corporation “double taxation” occurs when the C corporation first pays taxes on its own earnings and then the shareholders or owners pay income taxes on the dividends they receive. Even though the tax status of a Limited Liability Company and a S Corp are almost identical, the Limited Liability( LLC) can offer small and home business owners many advantages over a Corporation.

A Limited Liability Company (LLC) is much easier to form. Requirements for forming a corporation and filing the necessary documents with the IRS to have it be taxed as an S corporation is a complex and time-consuming process. With a LLC you simply file a Certificate of Formation or Articles of Organization with proper state agency, in most states it is the Secretary of States. Unless you choice to do otherwise, single-member Limited Liability Companies are automatically taxed as sole proprietors by the IRS. Limited Liability with multiple owners are automatically taxed as partnerships. Which is much different from the Corporation which must file IRS Form 2553, “Election by a Small Business Corporation,” within 75 days of the corporation’s formation to obtain pass-through status a! s an S corporation.

Other attractive benefits of Limited Liabilities Companies (LLC). In contrasted to Corporations, LLCs are not required to hold annual meetings or keep formal meeting minutes. Owners of a Limited Liability Companies do not have to issue stocks to the owners. There is no limit to the number of members who may have an ownership interest in the company.

There are some draw backs to an LLC but as it relates to small or home business owner they are so insignificant they are no worth mentioning. It clear that an Limited Liability Company is a small business owner?s dream. It provide the protection of corporation, while maintaining the simplicity of a partnership. With LLC you will have more time to focus on the important details of your business and not spending precious time pushing useless paper. For more information on LLCs or other business issues visit www.wizatbiz.com

What Every Small Business Owner Should Know About Their Taxes.

My Tax Tutor For Small Business Owners.

• ISBN13: 9781592575022
• Condition: NEW
• Notes: Brand New from Publisher. No Remainder Mark.
• Click here to view our Condition Guide and Shipping Prices

Product Description
Be a pro in no time …

Ideal for bookkeepers, accounting clerks, and small business owners, this practical guide goes beyond general accounting principles to teach readers how to prepare and manage their companies’ books. In this new edition, readers will find completely revised and updated information on handling sales and services, and updated tax information reflecting changes in the tax code.

• Perfect for the many pract… More >>

Alpha Teach Yourself Accounting in 24 Hours, 2nd Edition

• ISBN13: 9781592575305
• Condition: NEW
• Notes: Brand New from Publisher. No Remainder Mark.
• Click here to view our Condition Guide and Shipping Prices

Product Description
Updated information on new tax rates, forms, software, and more!

A comprehensive overview of the monthly accounting process for small business owners and novice bookkeepers and accounting clerks, this book guides readers through the ins and outs of creating accounts, conducting transactions, handling employees and payroll, managing month- end procedures, and issuing financial reports.

• Fully revised to reflect the latest laws a… More >>

The Complete Idiot’s Guide to Accounting, 2nd Edition

Forming more that 30,000 business entities since 1989 Nevada Corporate Headquarters clients regard them as a one stop business formation company. From small business support services that include tax consulting, estate planning, bookkeeping, tax preperation, and helping you maintain the on going compliance needs of your business. NCH is proud of having helped so many small business owners and entrepreneurs grow their businesses and protecting personal as well as business assets. The legal barrier that seperates your business from your personal assets (the “corporate veil”) has never been pierced in Nevada for corporations that have been run properly. In 21 years the corporate veil was only pierced 4 times and that was due to fraud resulting in harm to another party. Nevada is one of the most difficult states in the entire United States to pierce, because of Nevada courts. Nevada Corporate Headquarters corporate consultants are certified asset protection planners, who can help your business select the best entity to meet your business strategies. It doesn’t matter where in the United States that your business is located, NCH is beneficial to business from all 50 states. Basing your business out of the most business-friendly states as well as the state with the strongest “corporate veil” is one of the smartest things you can do for your business. Through legislation NCH provides small business advocacy, the state of Nevada offers advantageous tax benefits, enhance asset protection, and increased privacy to small business owners. NCH will help you determine if your corporation or LLC should be formed in your home state or the state of Nevada.If your business can benefit from Nevada?s bulletproof corporate veil or you?re a small business owners who needs incorporation and business services all under one roof, contact Nevada Corporate Headquarters today for a free, no-obligation consultation, 800-508-1729.

Product Description
A Complete Guide to Formations for the New Business Owner This comprehensive handbook describes the different types of business formations (sole proprietorships, partnerships, C corporations, S corporations, and limited liability companies), including the advantages and drawbacks of each, to help new small business owners make well-informed decisions. The first part of the book covers all the various legal business formations, with specific headings designed to help… More >>

Small Business Formation Handbook

Product Description
Worried about escaping an audit intact? Then you need Surviving an IRS Tax Audit.

This Nolo book explains what to say, what to do, even what to wear, so that a visit from the auditor doesn’t turn into a disaster.

With material pulled directly from IRS training manuals, the book exposes the tricks of the auditor’s trade. It provides you with a profile of People Most Likely To Be Audited (small business owners and contractors, step car… More >>

Surviving an IRS Tax Audit