Is Your Business Too Small to Incorporate?


Whether you’re still in the idea stage of your business or are already operating out of your home, you might be wondering if your business is too small for you to take the next step and incorporate. But the thing is, you may be overestimating the size or profitability your business needs in order to file for registration. If any of these apply to you, you might want to think about filing for a corporation, LLC, or non-profit organization:

It’s more than just a hobby

If you’re bringing in $30,000 a year from your Etsy account, that’s more than just selling your crafts as a hobby. The same goes for Ebay or other online vending sites. If you’re making a job-worthy profit, you should make it an official business. Registering your business will not only give you more credibility, but will also give you liability protection and tax benefits.

You’re selling food or drinks

If you’re selling homemade food or drinks, your business needs a Food and Drink License, which means that you need to have a legally established business in the first place. This is another realm where both liability protection and credibility play an important role in the success and protection of your business.

You’re entering people’s homes/people are entering your home

If you’re running a bed and breakfast from your house or a housekeeping service to clean the houses of others, this means that either people are entering your home or you are entering theirs. This has the potential to bring a huge amount of liability to you, and establishing your business as a separate legal entity is not only good for you but good for your clients. They’ll trust you more, and again, you’ll gain tax benefits from establishing your business.

You’re operating a charity

If you’ve started a charitable foundation, you’re going to be benefiting others as well as yourself if you register as a non-profit. If you qualify as a 501(c)(3), you’ll be elligible for federal exemption from corporate income tax, as well as state and local income taxes. And of course, people are far more likely to donate to a charity with legal credibility.

For the most part, people will expect any kind of profitable business to be registered, as it validates the trustworthiness of the company. If you’re wondering whether you should take the step and file for incorporation, LLC formation, or non-profit formation, call Direct Incorporation at 1-877-281-6496 today!

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