Hi all
I'm getting closer and closer to tossing open those virtual business doors and have been thinking about what kind of paperwork I need to operate as an official small business. Does anyone have any experience with this?
I noticed a few of you are LLCs and I'd also really appreciate any tips you can give me on the process you went through to set that up. Cost, which offices to contact, etc. Is it very complicated?

Any other thoughts on this are welcome
Thank you!

Hi Rose
You know, since I've been out of the country from the start of my business I've not had the pleasure of setting up either of these. I did not *have* a U.S. address any longer to base anything on. In fact, I'm really looking forward to writing in the forums here about the entire process - I also intend to establish my company as an LLC.
I believe Lily (Office Goddess) would have some good insight into this though, as she's already set up as an LLC. Let's hope she adds her two cents to the thread
*hint, hint*

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No legal advice here, just my own experiences!

The first thing I did was build a business plan. I totally cheated and used this website: http://www.canadabusiness.ca/ibp/en/index.cfm. Be prepared to spend some SERIOUS time building this - it took me several days due to the thought process involved. But, well worth it!

Next, I typed up a LLC operating agreement (sorry, no website - send me your email address and I will send you the template I used)

Neither of these documents is critical for starting up your business but the banks will want them if you are trying to get a business loan. This also really helped me to focus on what I wanted and where I was going with my business.

Setting up as an LLC in Colorado was REALLY easy! I logged on to the Colorado Secretary of State's website and filed the articles online for a $10 fee. The articles basically just asked for who I was, what the name of the company would be, and where I was physically located.

Be prepared for LOTS of junk mail shortly after filing! I got a PO Box the same day I filed and then put in a change of address immediately to get the junk mail away from the house. Be sure and use your business checking account (see next paragraph!) to open the PO Box. I put both my business and personal names on the box ownership papers.

Immediately after filing, I opened up a business bank account and got a business debit card to use for paying online filing fees, tax deposits, etc. The bank will need a copy of your filed articles as proof that you are legit so be sure and print them out. I suggest you use a different bank for the business than for personal use - this keeps everything easier to track and looks better on paper.

The tax issues depend on whether you are a sole owner or a partner (sole owner is, obviously, much easier!) If you are a sole owner, your SSI number is your tax id. If you are a partner, you will need to file with the Feds to get an EIN (Employer Identification Number) at http://www.irs.gov/businesses/small/...102767,00.html

Tax deposits need to be filed quarterly based on your NET income. This can best be done by signing up for the Fed's online tax deposit service https://www.eftps.gov/eftps/ If you are a sole owner, you will use your SSI number and your own name to set up the account. If you are a partner, you will need to file with the Feds to get an EIN (Employer Identification Number) and you will use THAT info to set up your account. I recommend depositing 30% of your NET income each quarter. (Painful, but necessary).

I also recommend setting your business up ASAP in an accounting system (I use QuickBooks) in order to track your expenses, etc.

As an LLC, you will be filing your businesses income as part of your personal income at the end of the year. All the more reason to have an accounting software package. (Setting up/operating QB for people is what I do for a living - SHAMELESS PLUG FOR BUSINESS HERE!!)

Sorry you asked??

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Lily Chambers, The Virtual Office Goddess, LLC
Author "How to Do Your Own Small Business Bookkeeping"

Wow, Lily thank you! This is exactly what I needed to kind of set it all out in an orderly plan. You've really got it together and that is so sommendable. Thanks very much for taking the time to share these details with me. You've just made my whole weekend

And Tess, when you do go through all of this it will be a superb process to detail in the forums so be sure to keep us posted.

Thanks again Lily
If I might ask one follow up question? What would you say are the reasons behind keeping a business account and a personal account at different banks? I have such great service at my local credit union and had hoped to go through them but if you do think it's unwise I'll take your advice and look into other options.

Speaking of which, does anyone have any tips or touts on the best banks for setting up a business accounts. Which offer the best services and rates? I guess that's a tough one though and is more relative to area - so any national banks?

Thanks again!
Rose

Originally Posted by americanrose

If I might ask one follow up question? What would you say are the reasons behind keeping a business account and a personal account at different banks? I have such great service at my local credit union and had hoped to go through them but if you do think it's unwise I'll take your advice and look into other options.

The basis is to make it easier to keep your personal and business accounts COMPLETELY separate. If both are at the same bank/credit union, it is easier to accidentally deposit to (or withdraw from) the wrong account if you forget your deposit slip/checkbook, and it is more tempting to just transfer money from one account to another rather than writing yourself a check and depositing it in the other account. From an accounting standpoint, separate is better and easier to track Obviously, it doesn't matter from an actual financial standpoint as long as you have separate accounts for business and personal transactions, especially since an LLC is considered an extension of your personal income.

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Lily Chambers, The Virtual Office Goddess, LLC
Author "How to Do Your Own Small Business Bookkeeping"

Makes perfect sense, I hear ya!
Thanks Lily

Lily, great info Thanks so much for sharing!

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Great info Lily, I didn't realize how easy it was to register as an LLC. I also did mine online on Connecticut's DRS website and it cost me a whooping $50 . I was consulting in my last job and my accountant recommended putting 25-30% way for tax purposes, it gets easier to put that much away when you begin.

Having a separate business account saves you a lot of time during tax season. All in all, taking these steps help with conditioning your mind as a business owner and not an employee and think about the impression you would make on potential clients.

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Creative & Strategic Web Design Services
www.aivirtualsolutions.com

Thanks to you too Agnes, so much! This is all the perfect start I needed. Just a little push in the right direction

Originally Posted by Agnes I

All on all, taking these steps help with conditioning your mind as a business owner and not an employee and think about the impression you would make on potential clients.

By separating my personal and business finances, I am also helping to separate my personal and business lives. I try to think of the business as a separate entity - when I talk about the business to my hubby I usually reference it as "Goddess." Of course, we are both starting to think of the business as a "her" and, in a lot of ways, as my employer!!

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Lily Chambers, The Virtual Office Goddess, LLC
Author "How to Do Your Own Small Business Bookkeeping"