Forming an LLC, C or S Corp

[entrepresooner]

Would it make any sense to go ahead and form my legal business entity, apply for my EIN, and other formal business documents even though I'm not planning on going into business immediatly?

What I want to do is just have the infrastructure in place so that when I'm ready, I can strike that much faster. Also, I want to start building credit under this entity so that it will be easier to get financed on future opportunities.

This business entity will be a sort of "umbrella" under which all my ventures fall under. Anything from Real Estate Investments, wholesaling, and retailing.

This will also allow me to setup a corporate website, and email which will make me more presentable to investors, lendors, and possible business partners.

What do you think?

[BulaRae]

Get the book "What My Rich Dad Taught Me About Corporations" by Robert Kiyosaki, and also "Inc. and Grow Rich" through Sage International (sageintl.com).

You can certainly get an EIN online or over the phone (irs.gov) and don't need to have anything in place yet officially. Make sure you select that you plan to have 1-4 employees (vs. 0). If you select 0 it's a red flag for an illegal or fake cover and they will track you and audit you like lint on a dark suit.

[entrepresooner]

I wasn't aware he had a book specifically about corporations. Kiyosaki is the one who inspired me to be an entrepreneur...I'll definitly look that one over. Thanks

[JLeezer]

If you register any form of a legal entity with your state you will be obligated to fulfill the state requirements (such as annual registration fees, filings, and tax returns) and federal requirements (tax returns, mainly). Also, if you begin dabbling in any particular business but do not make a profit from it, depending on the specific situation the IRS can reclassify the activity as a hobby and not a business, which can open you up to tax liabilities that you otherwise would not have expected.

Also, you can most likely register the domain name for your corporation and set up email without having the entity in place. Simply be sure to clarify that the domain is for the future company or register a fictitious name (or dba or assumed name) with your state.

FYI, your corporate website and email will not make you more presentable to lenders and investors. A good, solid business plan with significant, accurate information will do that much better. Focus on planning your business, not jumping head first into an empty pool.

[BeTheBox]

Get your EIN or tax id number INSTANTLY and FREE from the irs.gov website. Do not get caught up in any of the pay programs. For BeTheBox we used legalzoom.com to file the LLC. Took about 20 days for the signed materials to get back to us, and we choose to use them as our reg. agent. Legalzoom is a great service, but be careful. They will try to upgrade your package when the standered is only needed, not to mention their Tax Id application service is $79 (again, its free and instant off the IRS website).


I wish you luck.

Drew Petrizzo
BeTheBox Marketing

[entrepresooner]

I agree that it won't really do much for lenders and investors. But when I am doing research, and contacting people in various industries, having the @mycorporation.com instead @yahoo.com will help my credibility.

What about setting it up to build business credit? That seems like reason enough. Also, I am 100% starting a small DJ business next semester so its not like the corp will be sitting idle.

To me it just seems like opportunities come and go before I can jump on and this will solve that problem for me.

[BeTheBox]

Web Development is our main market. Shoot me a message if you need any work done, be it design or graphical. Be glad to answer any design questions you may have

[OmariHoldings]

Web Development is our main market. Shoot me a message if you need any work done, be it design or graphical. Be glad to answer any design questions you may have

We need some work done. What all can you all do as far as web development is concerned? Thank you very much

Prince Anthony, CEO
Omari Holdings, LLC

[jasaunders]

Wow, so much bad information being spewed.

[entrepresooner]

Such as? If your going to say something like that you have to elaborate. Don't leave the thread hanging!

[jasaunders]

You are better off either (a) speaking directly with an attorney, (b) working with a reputable B&M incorporation firm, or (c) visit government websites or call your local AHJ's yourself to read up on the process and learn the information yourself.

When you ask these questions on a forum such as this, you get a lot of bad information that people have "heard", but have no real knowledge of. AKA- Make sure you select that you plan to have 1-4 employees (vs. 0). If you select 0 it's a red flag for an illegal or fake cover and they will track you and audit you like lint on a dark suit. That is one of the most absurd comments I have ever heard on the subject.

[fwn122]

Form and LLC it's very simple and inexpensive.

[entrepresooner]

I agree that this is not the place for legal advice, not that I'm not grateful for every peice of info I get on these forums.

But I am more asking what people think of my idea of forming the legal entity ahead of time, in order to build a corporate identity, build business credit, and appear more organized to the outside world.

[jasaunders]

And the answer is... It Depends. Jon gave a good answer. What is the point of incorporating ahead of time? I don't see why you would want to form an entity and then just have it sit idle, because you will be responsible for following local and state reporting requirements. And many states have annual LLC franchise fees, so it will cost you just to have an idle entity. I don't see a reason why you would create an entity unless you were going to be using it, I don't see any benefits to formation before you are ready.

[entrepresooner]

It will only be idle for a few months, if that. The point is mainly to build business credit that won't rely on a personal guarantee of any kind.