Sunday, March 13, 2005
My Small Biz, Inc...or LLC...or????
One of the first major choices I felt like I should make with Paper Bride is what "form" I wanted my company to take. There are several major classifications to choose from including: Sole Proprietorships, Partnerships, Corporations, "S" Corporations or Limited Liability Companies. There are general rules that go along with each of these biz types, however, there are some major differences based on whatever state you might live in. For instance, after some research, I decided to register my company as an LLC. There are a whole host of places you can go to online that will manage this process for you (for a fee, of course), however, I decided to go at it alone. Little did I realize that as a resident of New York State there is a "publication requirement" for every LLC registered in the state. Basically, this means that anyone who registers their company as an LLC needs to publish a notice of this formation in the newspaper for six consecutive weeks (this is not true of any other type of business formation in NY...ONLY LLC's). This doesn't sound too horrible until you consider the fact that you are told by the state which newspaper you need to publish this notice in. And as a resident of New York City, my choices are basically The New York Times, The New York Post and a couple of other papers. Translation: forming my little LLC (which cost $200 to register) was going to cost me up to $3000 in publication fees! Needless to say, after I had begun this process, I began to think that an "S" Corporation might be a better bet for me...I continue to wonder if I should switch up to this day. My best advice is to do a LOT of research on this subject. Most people tell you to speak with a lawyer, which isn't bad advice at all, except if (like me) you have no start-up money to speak of. If you have an accountant, speak to them as they have lots of great advice on this subject as well. You definitely need to familiarize yourself with all of the business structures before making a decison as this is a super duper important one. Having said that, its usually not horribly difficult to go back and change the structure of your biz later on, but if possible, you want to get it right the first go around, right?