You have made a big move, you have formed your business and gotten it incorporated, what next? This particular post will act as a guideline to the process that you will need to follow as you begin the launching phase of your company while you prepare to take on investment.
The first step, get a new Federal Tax Identification Number
A corporation or LLC is in itself its own separate entity. Therefore, it is mandatory that you get the business, it's own Federal Tax identification number that is also known as the EIN Employer Identification Number.
When forming a business, you should think of it as the birth of a child. Therefore, this particular child will need his or her own SSN (social security Number) this is the same for your business. Even though you have a Tax ID number as a sole proprietor, you will need to get a new one for your new business structure. Consult an attorney to assist your through this specific transition.
You will need to cancel your fictitious business name
In case you had a DBA for your previous sole proprietorship business, you may need to have it canceled. Many small businesses that have thrived to huge corporations started off as a sole proprietorship and then got a DBA for their business name. Therefore, in case you file for your LLC or Corporation under the same name that you had used in your sole proprietorship, then you will need to cancel the DBA that you had earlier set with the sole proprietorship, to ensure that your paperwork is clean and in order. You can consult your attorney about this.
Close your previous bank account and open a new one
In case, you had a dedicated bank account as a sole proprietor, then you need to close it in preparation for a new account. This is because once your corporation or LLC is processed, then you can open a business bank account under the LLC or corporation, this is because you are obligated to keep your business and personal finances separate. Therefore, having a dedicated bank account for your corporation is mandatory.
It is crucial that the finances are kept separate to ensure that your finances do not commingle. Having a separate account will ensure that all the expenses and cash flow separately.
Trademark your company name
Once you are done forming your LLC or corporation, then you have registered your name in the state. It prevents anyone from using your specific business name in any other of the 49 states in the US. Therefore, in case you want to protect your brand, nationwide you will need to consider filing for trademark protection.
Take a look at your compliance responsibilities
Once you have acquired the corporation or LLC status, then you have got to operate your business at a higher administrative level, that you previously did with the sole proprietorship. A good example is, if your business had been operating as a corporation, then you will need to record minutes of the meeting whenever a corporate meeting is held. You will also need to take note of every action or decision that is made in the company minutes.
The LLC and corporations are usually required to file an annual report with the state, as well as keep up with their quarterly tax payments.
File state and Local Registrations
Most states in the US will require that companies that are formed in other states register their businesses in the states that they are conducting their businesses. In case you are using the services of a registered agent service such as a Corporate service or Corporation Trust Company, with a small fee the firm can help guide you through the process. Your lawyer should also be in a position to assist your coordinate the process as well.
Mollaei Law is a law firm specializing in business law serving businesses and entrepreneurs. We provide legal expertise in all stages of business development by drafting and reviewing contracts and agreements, assisting transactions and negotiating, forming LLC's and Corporations, registering trademarks and copyrights, business planning, and answering any legal questions you may have about your business.
Sam Mollaei, Esq., business lawyer, can be reached by email firstname.lastname@example.org or via phone (818) 925-0002.