I need to make my business legal, and I have a lot of questions...

A DUNS number is a unique nine-digit number used by Dun & Bradstreet to identify a business for purposes of credit reporting. If you're not going to be seeking credit in your business's name, then not having a DUNS number won't be of any consequence.

In my case, I'm establishing credit in my corporation's name, so it's a must-have for me. My reason for this is that I want to keep my finances separate from the business's.

As for getting sued, disavowing liability in your terms doesn't necessarily shield you from being successfully sued. In today's litigious society, it should be remembered that just about anyone can sue for anything. In regards to a lawsuit actually being successful in a case such as that, it would have to involve some kind of culpable negligence.

When it comes to incorporating, I honestly wouldn't consider paying a lawyer to do it for you. It costs considerably more time and money to have someone else do something so relatively simple. For example, in may case it cost $70 to incorporate. Had I used one of the various online services to do it, my cost would've been ~$300. A lawyer would cost ~$1K to do the same.

If you want to incorporate, I'd strongly recommend spending some time in your local book store or library to study. Books by Nolo Press are a great source of info. There's also a wealth of information online.

Ken,
I want to keep my finances separate (personal vs. business). Right now I'm using my personal credit card to make purchases, etc. for the business. I want to get a credit card just for the business, but I need to make it a business first. I'll start reading up on everything as soon as I can.

Thanks guys..

Dustin J. Cox
Diapsid

The steps to obtaining business credit are relatively easy, but they can take a few months.

Ideally, you want to obtain credit based solely on the business's profile, although some creditors require a personal guarantee which links you to the credit account.

A great place for you to do some research on establishing business credit is CreditBoards. Be sure to read the pinned threads, especially the "mother thread" as they contain all the basic info.

Thanks Ken. I'll check it out.

Dustin J. Cox
Diapsid

what is involved in changing from a sole owner legal business to a S-Corp or LLC?

I set up as a sole owner to obtain my sellers permit to sell at a few local expos and things are progressing and I would like to switch over. Any thoughts on an easy way to do this cheaply?

I have my Fed Tax ID and State Tax ID and my Sellers permit already

Originally Posted by MorphTiles

what is involved in changing from a sole owner legal business to a S-Corp or LLC?

Although you can definately do this yourself, it is strongly advised to pay the $300-$800 and have a lawyer take care of everything. As a lawyer told me once, maintaining a corporation takes about fifteen minutes per year...and your lawyer takes care of the necessary yearly paperwork. Incorporating is easy, safe, and adds to business credibility in the eyes of the consumer.

However, you are now on a salary. Gone are the days of pure profit. If you suddenly need an extra $2000 to buy a plasma television...you are out of luck. As a sole proprietor you only have to sell an extra Albino Ball Python. As an employee of a corporation you must save a little at a time per paycheck...or embezzle the money.

Chris

Or pay yourself a bonus. There is nothing wrong with paying yourself a bonus if you are the majority shareholder.

S~

true but bonuses get taxed at a higher rate

Originally Posted by MorphTiles

true but bonuses get taxed at a higher rate

That is one of the cons of corps. You get taxed twice. First the income is taxed to the corp, then your income (wages) is taxed. As scary as it can seem, I'm still a sole proprieter. I just don't make enough to pay double taxes, and the yearly mandatory minimum corporation fees, especially the fees here in CA. It's understandable why many business' feel CA is very business unfriendly.

Yeah I have heard in Cali its nearly impossible for a small business to be a corporation and keep its lights on.

S~