

Register a Business Today - count
http://swombat.com/2011/1/3/register-a-business-today

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rafski
In many European countries it costs considerable money to keep a business
alive, REGARDLESS of any income.

In Spain you have to pay €250 a month Autonomo, a social tax, even as a sole
trader/freelancer. €250 x 12 months is €3000 (roughly $4000). This is a lot of
money to get taxed for nothing annually in a country where minimum monthly
wage is in the region of €550 and rent prices are high. Ever been to Barcelona
and wondered why it wasn't the design Mecca it had all the makings of? The
fantastic design scene seen in the design of posters, flyers, logos, shops,
interiors, all the design festivals, the conferences… yet nothing significant
comes out of it. The social tax prevents small business there from starting
up, a policy that makes room for large companies.

In Poland, it costs a similar amount of social tax (ZUS) just to stay
registered as a company (a sole trader that is, there are higher costs
associated with keeping a proper company registered).

It's better in the UK and Republic of Ireland:

In the UK the minimum amount of social tax (NIC) for a sole trader with
minimal or no income is £2 per week, which seems fair enough.

In Ireland the social tax (PRSI) is 3-5% of your income but no less than about
€250 per year (might have gone up this year). Seems bearable as well.

In both countries (not 100% sure about UK) you can register a Business Name
(€20 in Ireland) without having registered a company. In Ireland you can start
trading without even registering with the Revenue until you make around €3500.

~~~
Ras_

      Finland: 
      Start-up notification by private trader 75€
      Start-up notification by private limited company (min. 2.5k€ share cap) 350€
    

No liability to collect VAT if annual sales do not exceed 8,5k - unless you
are a foreigner with no fixed establishment in Finland.

    
    
      May neglect the appointment of an accounts auditor if more than one of following are not met:
      Balance sheet total exceeds 100k
      Net sales or corresponding earning exceed 200k/year
      There are more than three employees on average
    

Self-employed pension insurance (YEL) not mandatory e.g. if not resident,
annual work income is below 6 775,60 euro...

<http://www.yrityssuomi.fi/default.aspx?nodeid=15325> (guide text)
<http://www.prh.fi/en/kaupparekisteri/hinnasto.html> (registrar, prices)

Quite easy, but for example dividends are taxed so heavily that Estonia is a
good alternative to set up shop. You should come here mainly because of
quality workforce. Finland is a low-paying country for engineers (65-75 % of
German average, 60-85 % of French average, 65-80 % of UK average - stats from
2001 though).

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apollo
If you live in California there's an annual minimum franchise tax of $800,
plus whatever annual fees are charged by the state you incorporate your LLC
in.

~~~
bmr
My unused CA S-Corp has been the bane of my existence lately. From the $800
fee to the documentation required to stay in good standing (small, but easy to
forget when the company does nothing), it's more pain than it's worth.

If you're someone with lots of ideas and lots of peaks of excitement, it
actually might better to postpone incorporation until you can't responsibly
continue without some sort of limited liability.

~~~
alain94040
Which is why we invented <http://foundrs.com>, which is a way to have your
cake and eat it too. Don't pay any taxes until your business takes off (at
which point you should incorporate), but have a good founder agreement in
place so that the compan doesn't explode during takeoff :-)

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bhousel
You can even register a business for things that you might consider a hobby as
long as you can earn a little bit of money doing it. For example, I know
someone who is an amateur photographer who occasionally takes photos for his
friends at weddings or other family gatherings. His business only barely
breaks even, but it does allow him to consider his camera and computer
equipment as business expenses - things that he would probably spend money on
for himself anyway.

Any small business owner should be familiar with the IRS Guides at
<http://www.irs.gov/businesses/small/index.html> , and especially Publication
535, which tells you business expenses are allowable:
<http://www.irs.gov/publications/p535/index.html>

~~~
jotto
this is not exactly true, there has to be a reasonable chance that this is a
profitable enterprise defined both by your effort/intention and at least some
profitability over a period of time. if it doesn't meet these standards, it's
a hobby and you cannot deduct associated expenses. see here:
<http://www.irs.gov/newsroom/article/0,,id=169490,00.html>

~~~
bhousel
You are correct, in this case the person does make a little bit of money from
photography, some from friends and some from stock photography sites. He did
speak with a tax expert and is apparently in the clear as far as the IRS is
concerned. I think his "income" is somewhere in the $100/year range.

My point was just that there are a lot of activities that most of us might be
doing anyway for fun, not considering the tax advantages of organizing a
business. e.g. amateur photography, helping people with computer and website
issues, personal services, blogging, etc.

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rdl
There are extra benefits to incorporating a C corp in the USA before
12-31-2011: the Small Business Jobs Act 5-year 0% capital gains thing.

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ionfish
If you're in the UK, Companies House have a web page that explains the basics
of setting up a limited company.

[http://www.companieshouse.gov.uk/infoAndGuide/companyRegistr...](http://www.companieshouse.gov.uk/infoAndGuide/companyRegistration.shtml)

You can also use their WebCHeck service to find out whether the name you want
is taken or not.

<http://wck2.companieshouse.gov.uk/>

~~~
swombat
For the UK, also worth noting that it's worth getting the printed certificate
of incorporation, since you will need that in order to open a bank account.

~~~
sjtgraham
Barclays let me open a business account with a PDF of my certificate of
incorporation.

~~~
ZeroMinx
Same for me with Cater Allen.

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sjtgraham
It's worth noting that one can buy companies 'off the shelf', i.e. companies
incorporated some time ago, from many formation agents. I have to say, in the
UK at least it's about as easy to see whether a company is trading or dormant
and to see its filings as it is to check its date of incorporation, so I'm not
sure how much extra utility it provides.

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hammock
California: A $20 reporting fee and a statement of information are required 90
days after formation and then every two years. An annual $800 LLC tax is due
75 days after formation and every year thereafter. There is a minimum annual
fee of $865 if the LLC's net income exceeds $250,000.

Nevada: A $125 fee and an Initial List of Managers and Members are due 30 days
after formation. The annual report filing fee is $125. There is no state
income tax or franchise tax.

Delaware: There is an annual LLC tax of $200 due each June 1, beginning the
year following formation. There is no state income tax.

New York: Every LLC must publish notice of its formation in two newspapers in
the county in which it was created. In some areas, the fees for this
publication can run up to $2,000. The company must then submit a certificate
of this publication to the state, together with a $50 filing fee. For LLCs
that choose to be treated as a partnership, there are annual fees that
increase based on the number of members the company has (from a minimum of
$325 to a maximum of $10,000).

<http://www.legalzoom.com/llc-faq/llc-operating-costs.html>

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A1kmm
In New Zealand: NZ$10.22 to reserve the name (a necessary prerequisite),
NZ$153.33 to register the company (total cost ~ US$126.50). There are no fees
or taxes due for companies with no income.

Companies are legally required to file an annual return to the companies
office (there are no fees for online filings). Annual returns can be as simple
as confirming company details, stating the date of the AGM, and indicating a
resolution not to appoint an auditor was passed.

Tax returns (and company tax payments as a percentage of before-tax profit)
are required by a separate government department if any income is earned, but
not if no income is earned.

Name changes cost $10.22. Changes to the company addresses, director details /
addresses, or shareholder details / addresses must be notified by law
(changing the details online is free).

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MJR
Where can you register a business for $30? Most states have fees for
registration closer to $100 a year and any website you use is also going to
charge you a fee upwards of $100.

~~~
HeyLaughingBoy
Varies according to business type. My Sole Proprietorship was about $25 four
years ago.

[edit] And that's one nice thing about the US: how quick and easy it was. I
literally only created a business name and got a bank account because a
customer wanted to pay me by check instead of the usual PayPal. The dollar
amount was well worth it, so I took the check, registered the business and
opened an account to deposit it all within a week or so.

~~~
capstone
Companies that check out your years-in-business history (one of the central
points of the original article) normally do not go for sole proprietorships.
If an RFP says, minimum 3 years in business, the next line is usually, minimum
X number of employees.

As far as costs, yes, it may cost you $25 to register your sole proprietorship
but then it will cost you hundreds of dollars to file your year-end taxes,
plus all the quarterly's. Add hundreds more for UBT. Plus most states get you
in other ways, e.g. the metropolitan commuter tax in New York.

~~~
HeyLaughingBoy
Sole props are the cheapest, simplest tax structure around.

I don't know why you think it costs "hundreds of dollars to file." Perhaps
you're talking accountant's fees? My tax accountant does the Schedule C for
about $75 extra as part of our personal taxes annually -- I just provide him
with a P&L statement for the year. For previous businesses I did all the taxes
myself: the IRS provides lots of easy to understand, free publications for
small business. Hell, I did a few years of 1065 (Partnership) returns (stupid
decision to form business as partnership!) myself and those are awful.

~~~
capstone
I agree with your point that sole props are cheap and simple. My comment was
within the context of the submission. The author recommended creating a
"placeholder" entity to be able to pass years-in-business requirement, and
unfortunately, for situations where that requirement exists in the first
place, a sole proprietorship is not going to fly.

And yes, I meant accountant's fees. You don't just have your IRS filings, you
also have the state and the city which depending on your location require
multiple filings plus UBT and other complications. So you have a minimum of 15
different filings (1 yearly plus 4 quarterly, times 3 for federal, state and
city), and usually more. I am not sure where you live - personally, I've filed
in the US, East and West coast and Midwest and it's never cost me anywhere
near $75. Perhaps you and your accountant have been ignoring deductions, self-
employment taxes, UBT, etc. I simply don't see how you could have a
professional CPA charge $75 for all that.

As far DIY tax prep I think it's a waste of your time to understand all the
complexities. Tax requirements change every year and sometimes mid-year... if
you are a consultant, your time is best spent doing what you know.

(So did I understand correctly that your accountant files just one yearly form
in addition to your personal taxes? That doesn't sound right. If you are not
in the US, you can probably gamble on not being audited, otherwise I'd be
looking for a new accountant asap, and paying him to re-file your previous
years as well).

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dennyferra
Should you validate your idea first before registering your company? And is it
ok to start out with a DBA and then LLC later?

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beagle3
My CPA recommended "The corporation company" ( incorporate.com ) to save the
hassle, but web reviews are mixed. Anyone have experience with a simple,
reasonably cheap, incorporation service?

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edw519
_If your company registration date is 2 months ago, you will be at a
disadvantage in negotiations about price, up-front payments, and other similar
things._

OTOH, if you build a compelling product that satisfies your customer by
extinguishing his hair on fire (which you should do anyway), then the rest of
this is just details. If a prospect will cut of his own nose to spite his face
by negotiating price or terms based upon your incorporation date, then maybe
that's a customer better off not converted.

There may be good reasons for registering a business now, but this isn't one
of them.

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sudonim
What websites would you recommend to register a SAAS company. I'd guess that a
Delaware LLC might be the best way to go? Can anyone with experience chime in?

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mikek85
fwiw, I created a company with 100 shares of which I took only 1 at time of
creation.

Apparently this makes things easier if/when you come to distribute shares to
others as it will be a simple allocation of unallocated shares rather than a
more convoluted 'transfer' process.

~~~
draz
so if I were to create a website that (hopefully) generates money and in the
future I'd like to add investors/workers, I should already start thinking
about "shares?"

~~~
yoshyosh
definitely not if you haven't created the website yet. MVP first, how can you
make that 1st $ asap to validate your idea

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noverloop
I would have done this a long time ago if my country wouldn't levy taxes on
companies that aren't active (dormant).

I hadn't considered incorporating abroad seriously until now.

Are there any gotcha's with a company abroad? e.g. annual tax filing in my
country (Belgium)? wages paid out by foreign corporation? ...

