2020 has been the most exciting year for me. It is one thing to sit and daydream about the kind of life you wish to live. You can even watch others do it on social media and tv. But it is breaking down all of those desires into a plan of action that becomes quite overwhelming. I then decided best to become a legal entity in order to move forward in all of my projects. I did not know what it would take to become that legal entity.
If there is one key thing that I discovered in my journey so far, it is that you can find free information about anything. There is an unlimited supply of FREE knowledge at our fingertips at any given moment. That is not to say that EVERYONE knows what they are talking about. You will be able to soak in the knowledge that you see re-present itself throughout the course of your research. Checking multiple sources will help you focus in on the more beneficial details of starting a business. You would be surprised at what you can teach yourself about the legal obligations of running a business.
Myself, I am currently a team of one. So partnerships are not something I will be talking about here so much. If that is your situation, there is plenty of information online related to this topic instead.
After digging into the tax portion of starting my business, I discovered that my business will be considered a Single Member Liability Corporation (SMLLC). You don’t have to file a separate tax return with this entity because they are taxed like a Sole Proprietorship. One would simply claim any profits or losses on their personal taxes under schedule C. You also have the option of electing pass-through taxation (corporate tax treatment). In addition to the federal income tax, SMLLC’s will need to pay self-employment taxes (social security and Medicare) every year. Being new to the business world, I know I still have A LOT to learn about how to file taxes, but I look forward to the challenge. Plus there are so many helpful tools to utilize along the way. I will be giving Quickbooks a try myself in the very near future!
Another thing to note when registering your Single Member LLC is that you will be required to select a registered agent. The state requires a registered address for that agent that gets displayed publically. This is where signing up through credited companies who specialize in forming business entities comes in handy. In most cases, the service will come along for a trial period by registering through them. This person will be responsible for any legal correspondence with your company. An added benefit of doing it this way is that you have professionals handling the paperwork. That alone can save you from the heartache of rejection from a mistake on the application.
I used a company called INC Authority to form mine, and it made the process SIMPLE and EASY. Just watch out for the “added benefits”. Some companies may try and charge you for things you can get for free yourself. Saving any amount is EVERYTHING when you want to cut on start-up costs. Some examples of this would be filing for your EIN or forming your operating agreement. These are things you can do for FREE if you use your resources! One add on I did pay for was expediting the paperwork and it was well worth the $50.
As I have mentioned before, my team is me at this given moment in time. I am in charge of it all. Design, ideas, content, marketing, bookkeeping, investing, scaling, blogging, social media outreach, customer service, scheduling, as well as all of the other things that come with starting your own business. Another huge advantage of filing as an SMLLC is that you have COMPLETE control in all aspects of your business. There are no other members to consult with, no board of directors to determine what’s best. It’s just you and your ambition that will determine just how far this thing will go. Just how much your contributions will impact the world around you. You get to decide just how successful your company will be by every decision you make along the way.
It is important to research your specific state for any additional licenses that you may need to operate. You will want to make sure you obtain proper insurance and get all the required legal documents so that your dream doesn’t one day become at a risk. I know that I will need a “resellers permit” in WA
More to come of my Cynful Creations Lip Kits in the very near future!
Thank you universe, thank you, God, for manifesting my 2020 dreams into the most fabulous and fulfilling life! As always, I look forward to sharing the next manifestation of 2020 really soon!
Please share with me an app you use currently to make your entrepreneur’s life easier in the comments!!
