topic Re: Starting a new business in Business Credit

Starting a new business

Bfent1 — Sun, 13 Jun 2010 21:58:11 GMT

Getting ready to start my own entertainment business in the form of a LLC. In the next week or so and needed some advice on the best route to take step by step to form an LLC and also to be prep to obtain business credit. I was referred to Legalzoom, but wanted to know if that was the best way or is it a better way to become an LLC. Thanks in advance.

Re: Starting a new business

llecs — Mon, 14 Jun 2010 00:47:48 GMT

Congrats!

Just last month, I formed a new LLC too. IMO and IME (I started other businesses), hire an attorney. All it takes is one snafu in the paper work or state registration to result in undoing everything and starting over from scratch (I had to do that once...pain). I'm in the DC area and isn't that cheap, but I paid $2700, but that also included all the paperwork, registered agent info, and trademark registration and search.

Starting biz credit is pretty easy. I'd start by getting your DnB and opening some Net30 accounts from whereever. I'm out of the loop with biz credit (prefer cash now), but I started with a Uline, Staples, Dell, Lowes, and Home Depot without any PG. Of course any Visa, MC, etc. would require a PG so make sure your credit is good if you go that far. There's a Business CCs or Business Credit thread around here somewhere that has some great info.

Re: Starting a new business

Anonymous — Mon, 14 Jun 2010 10:44:18 GMT

And here's a link to the thread llecs was referring to, Business Credit 101.

Re: Starting a new business

Bfent1 — Mon, 14 Jun 2010 18:02:48 GMT

That was real helpful, another question, I'm ready to start my LLC but I don't have a physical address yet other than my home address. So do i need another physical address to form the LLC or just for credit purposes, I asked because the type of company it is I can start without any credit, but do want to apply for credit soon after.

Re: Starting a new business

Bfent1 — Mon, 14 Jun 2010 18:06:55 GMT

Thanks real helpful. Do I need another physical address other than my home address to form an LLC or just for credit purposes?

Re: Starting a new business

Anonymous — Tue, 15 Jun 2010 13:50:33 GMT

@boefobb wrote:
Thanks real helpful. Do I need another physical address other than my home address to form an LLC or just for credit purposes?

No, you don't have to have a separate physical address for your business, it's just kinda recommended (on many levels).

The last few years have seen enormous amounts of small home-based business startups. Creditors/vendors know this, it's an important and growing share of their market. As long as you've got all the docs (tax numbers, Sec. of State filings, separate business checking accounts, etc.), you're a legit business. No need to rent office space just for obtaining credit. And the LLC formation doesn't need a separate address, either.

I would definitely suggest a separate line for your business phone, however. You can save a few bucks by requesting a SOHO line from the phone company. It's listed in the phone book/directory assistance under your company name (at your request), which validates your business status for some vendors/creditors.

Good luck with your new venture!

Re: Starting a new business

Bfent1 — Wed, 16 Jun 2010 18:55:05 GMT

Thank U.... Real helpful.

Re: Starting a new business

Bfent1 — Wed, 16 Jun 2010 19:23:35 GMT

Has anyone on the forums used legalzoom.com to form an LLC? If so are they any good and if not why?

Re: Starting a new business

ngerasimatos — Fri, 18 Jun 2010 19:20:39 GMT

Legal Zoom is good, also http://www.incorporate.com/ is good as well, and much cheaper. Its pretty simple, if you want to form an LLC all you need to do is the following.

(1) Pick a company name.

(2) Create a company (You can do it on-line at: www.incorporate.com). I created an S-Corp but this might vary for you as you mentioend you wanted an LLC – my accountant helped me select in this case.

(3) Once the corporation is set up, you get assigned an Employer Identification Number (also referred to in other forms as EIN or TIN). You will pretty much need this number for all forms you fill out. You will then need to file a Form 2553 (Election by a Small Business Corporation) with the IRS –this form might vary depending on the corporation type.

(4) File a Business License (also referred to as a Business Tax Certificate) for your corporation

(5) Open a Business Account at a bank (I think Washington Mutual offers Business accounts at no charge)

(6) Open up an IRA account (this is instead of creating a Profit Sharing Plan which worked out better in my case)

(7) Purchase insurance. I purchased it at Techinsurance.com. Not sure what insurance requirements are today or for your specific industry, but let me know once you know.

(8) Sign up for payroll services. You can handle your own payroll service but I decided to pay a small fee and have Paychex, Inc. handle all the paperwork for me. There are also some banks that will offer payroll services at more competitive rates.