Business Formation

Business Formation

Many business owners have the illusion that owning something of their own means sitting in Adirondack chairs enjoying the view while sipping wine. Spoiler Alert! Business ownership does not mean you own a business; it means a business owns you.

All kidding aside, pursuing a passion and making it into a business is a great way of life, but certain foundational steps need to be in place for long-term success. Liability, self-employment taxes, retirement savings and solo 401k plans, accountable plans, exit strategies, business entity type, etc. are all considerations that many small business owners neglect. LLC? C-Corp? S Corp Formation? Perhaps a Limited Partnership?

We can help from A to Z and do it all for you.

Yes, LegalZoom might appear cheaper. But after you add on all the bells and whistles, our fee is very reasonable. And, you get excellent business consultation by using the Edwards CPA Group. Way too often people run out and do the LegalZoom thing, and then need to us to unravel a bad decision and put things back together. That gets expensive pretty quickly. So, forming a business is not the kind of thing to be stingy on- get solid answers and solid advice from a trusted business consultation and tax preparation firm. We’ve unraveled enough LegalZoom filings to choke a small horse. Do you know what it takes to choke a small horse? A lot!

Don’t forget that the Edwards CPA Group also consults with you on how to account for your business transactions, what tax savings strategies to deploy, what tax deferral plans to implement such as self employed 401k plans or profit sharing plans, and basic business operations. Small business consultation is what we do, and we do it well by catering to your unique needs. You are special and unique.

LLC Formation and Fees

Do you know what LLC stands for? We think it’s for Lawyers Likely Choice! It’s a very common entity start. An LLC can be a single-member sole-proprietor or a C Corp. We will walk you through which entity choice is the best for you. The Edwards CPA Group can do complete filings with the Secretary of State (for any state), and our fee is $425 plus the state filing fees. We can file your paperwork in all 50 states plus the District of Columbia. Some states are fast, some still require paper submissions (such as Pennsylvania). Some are slow for no reason, like California. You might also have to file an Initial Report. States such as Nevada and California have an Initial Report Filing requirement and our fee to prepare this filing is $100 plus the state filing fee.

We’ll also obtain your Employer Identification Number (EIN) from the IRS, create an Operating Agreement (for single member LLCs only) and draft an Accountable plan for reimbursable expenses. We prepare the Articles of Organization or Certificate of Formation and By Laws. The aforementioned documents are required by most banks for a business checking account. The Patriotic Act, Bank Security Act and Homeland Security want to clamp down on illegitimate business accounts and financial holdings. This fee also includes your S Corp election should you need it. We will send all the required worksheets and forms via secure email to get you started!

S Corp Formation

As mentioned elsewhere, an S corporation does not exist as an entity. Some other underlying entity must exist, such as an LLC, partnership or corporation, that then chooses to be taxed as an S Corp. People say “I have an S Corp” all the time… and there is not wrong with that, but technically you have some other recognized entity being taxed as an S corporation. The Edwards CPA Group will advise you on forming an S corporation and if and when it’s right for your business.

Partnership

Another error we see often is business owners adding their spouse; there are cases where this makes sense and in community property states it doesn’t matter, but if you add your spouse you instantly become a partnership requiring a partnership tax return (Form 1065).