Author: Maryann

By Maryann Lawrence, Startup Rep, Direct Incorporation

Over the next few weeks we will be reviewing the process for incorporating a business in the most popular states, starting today with incorporating a business in California.

How much time does it take to incorporate in California?
You have two options when incorporating your business in California. The first is the standard route, which takes 10 to 12 weeks to complete. Your other choice is to pay a $65 expedite fee and speed up the process to four to six weeks.

How much does it cost to incorporate in California?
The state fee to form an S-Corp or C-Corp in California is $100, while the LLC state fee is $70. Once your company has been incorporated in California, you will pay an annual franchise tax of $800. In addition, you will need to pay a filing fee of $25 each year.

About Direct Incorporation’s California incorporation services.
Direct Incorporation offers three packages to assist you with incorporating in California.

1. Our Standard Package costs $149 and includes the following services:

* Articles of Incorporation Completion. The preparation and completion of your company’s Articles of Incorporation (the primary document used to incorporate a business), based on the unique needs of your particular company and the requirements of the specific state.
* Preliminary Name Check. Audit of supplied information to ensure compliance with state formation requirements, including your company name choice.
* Real-Time Online Access to Client Resource Center. Check the progress of your order; download copies of relevant incorporation documents.
* Prompt Shipment. Order confirmation and documents will be promptly delivered to your office.
* Notice Documents. Documents sent to you, alerting you to the post-incorporation requirements of your state.
* Obtain Your EIN. (Employer Identification Number) Employer Identification Number obtained upon request (at no additional cost).
* Filing of State Franchise Tax. (if required by state at filing of Articles)
* S-Corporation Assistance. (For S-Corp Clients) Preparation and partial completion of S-Corp election form (2553).

2. Our Premier Package costs $317 and includes the above, plus:

* Boxed Corporate Records Binder. Customized with your company’s name in gold lettering.
* 20 Stock Certificates. Customized with your company’s name.
* Stock Transfer Ledger. Bound in booklet form, which includes 8 pages ruled and printed on ledgerstock.
* Corporate Bylaws. (For Corporations) Can be adopted by your company or altered to fit your company’s needs before adoption.
* Operating Agreement. (For LLCs) Can be adopted by your company or altered to fit your company’s needs before adoption.
* Embossed Corporate or LLC Seal. Custom manufactured with your corporate name.
* Corporate Suite. Provided in convenient e-book format on CD Rom. Legal and practical resources for the new business containing documents, tools, and reference handbooks.

3. Our Venture Package costs $773 and includes the above, plus:

* 3 months of the Business Compliance Program
* Trademark Protection
* Website + Email
* Logo Design

Learn more about incorporating a business in California.

Do you have questions about incorporating a business in California? Please leave a comment below and I will try to answer them. Thanks!  – Maryann

By Maryann Lawrence, Startup Rep, Direct Incorporation

You’ve come up with a great company name. You’ve checked that no other company owns it. Now, how do you protect it from being swiped by someone else? When it comes to protecting your company’s mark, the best defense is a good offense.

1. Register your mark with the United States Patent and Trademark Office.
2. Use your mark correctly. If your company sells products, you will want to use a trademark, or “TM”. If your company sells services, you’ll want to go with a service mark, or “SM”. If you’ve federally registered your mark with the United States Patent and Trademark Office, protect it with a registration mark, or “®”.
3. Use it or lose it. Make sure your advertising contains your name and mark at least once per page.
4. Routinely check search engines to confirm that no one else is using your name. Better yet, consider hiring a watch service to monitor any activity related to your mark.

For more tips on protecting your trademark, check out Inc.’s article, How to Protect Your Trademark From Infringement.

Do you have questions about trademarks, service marks or registration marks? Please leave a comment below and I will try to answer them. Thanks!  – Maryann

 

By Maryann Lawrence, Startup Rep, Direct Incorporation

It’s all over the news. Sarah Palin’s name will soon be trademarked. Alaska’s former governor applied for the trademark earlier this year and, so far, she has passed all trademark hurdles, according to U.S. News & World Report.

According to her trademark application with the United States Patent and Trademark Office, Sarah Palin wants to register her name in two classes:  information about political elections and educational and entertainment services.

This begs the question; can anyone trademark their personal name? Here is where it gets a bit complicated. In order to trademark your personal name, you will have to prove that your name has achieved secondary meaning. In other words, the public needs to have associated your name with a good or service.

For example, celebrities can and often do apply for trademark protection based on the distinctive nature of their name and talent. (They make money off of being who they are.)

For more on trademarking a birth name, check out this great post from the Ohio State Bar Association website.

Do you have questions about trademarks, service marks or registration marks? Please leave a comment below and I will try to answer them. Thanks! – Maryann

By Maryann Lawrence, Startup Rep, Direct Incorporation

LLC maintenance requirements, IRS corporate tax obligations, internal corporate formality requirements – managing the backend of a business is enough to make your head spin! But don’t worry, there’s help out there. A little advanced planning – and utilizing an automated reminder service – will go a long way, especially when it comes to the IRS. Here are just SOME of the things you’ll need to plan for when running your business:

Annual Report Filing
Most states require that Corporations and LLCs file a statement and pay a moderate fee on an annual or biennial basis. This filing requirement, which is generally referred to as an “Annual Report” or “Franchise Tax,” updates the state government as to the status of the company, and permits the company to continue its existence.

Licenses
Are you running a daycare or restaurant? Are you an Engineer or Attorney? In order to comply with state business regulations, most new corporations and LLCs will be required to obtain a license and possibly pay a state fee before transacting business. After formation, it is urged that you check with the appropriate state agencies to ensure that you comply with the license requirements for your particular business.

Tax issues
It is important to remember that although federal taxes are likely to comprise the most significant portion of your tax liability, certain entities will also have to pay tax at the state level. Learn more about tax filings.

Publication Requirement
A handful of states has a publication requirement. This requirement generally directs a new corporation or LLC to file a notice of incorporation (organization) in a newspaper of local circulation.

Do it the easy way – Automate!
Direct Incorporation’s Business Compliance Program will keep you informed and up to date with your corporate responsibilities so that you can focus on growing your business. We’ll help you with:

• IRS filings
• State reports and renewals
• Internal corporate formalities
• Custom notices and licenses

In addition to keeping you informed of your corporate responsibilities, the Business Compliance Program provides you with an interactive software program that will walk you through your corporate formality meetings, such as your shareholder meetings.

Head still spinning? Contact Direct Incorporation for help. Thanks!  – Maryann

 

By Maryann Lawrence, Startup Rep, Direct Incorporation

So, you’ve got a great name and you want to start printing your business cards, brochures and sales sheets. But first, you’ll need to perform a trademark search to make sure no one else has nabbed your name. Why is this important? Because finding out after you’ve started using your name can have a devastating effect on your business in the form of fines, legal liability, and the lost cost of having to switch names midstream.

Performing a trademark search is free and easy.

You’ll need to perform a trademark search before you submit your application to the United States Patent and Trademark Office (USPTO). Submitting a trademark registration application blindly risks a considerable amount of time and money.

Don’t worry! Performing a Trademark Search is free and will ensure that you can use the name you want to use for your business. It also lessens the risk that your trademark registration application will be rejected by the USPTO.

When trademarking, keep expansion in mind.

Even if no one else is using the name in your state or geographic region, a Trademark Search will reveal if someone is using the name in any part of the country. This is important to businesses that plan on expanding. And we all invision growing our business, right?

Each year, thousands of business owners find out that they are practically frozen out of expanding to an area with their business or brand name, as someone in that area has Common Law Rights to that business name. A Trademark Search will reveal this scenario up front, before your put time, money and effort into building a brand.

Perform a free trademark search for your business now.

Do you have questions about trademarks? Please leave a comment below and I will try to answer them. Thanks!  – Maryann

By Maryann Lawrence, Startup Rep, Direct Incorporation

There’s a lot of talk about the best place to incorporate or form your LLC. Should you incorporate in a “tax haven” state with no individual income tax, such as Florida or Texas? Should you follow large publicly traded corporations and incorporate in Delaware? Or, should you consider the recent trend and incorporate in Nevada or Wyoming because you’ve read that you can remain anonymous and avoid paying taxes?

Well, for a small business, the answer is usually none of the above. It is usually makes the most sense to incorporate in your home state, where your business is domiciled and operates. This is typically the answer for a few basic reasons.

First, most small businesses will incorporate or organize as an S-Corp or LLC, which are pass thru entities. As an S-Corp or LLC, you won’t be subject to corporate tax generally, just individual income tax. As such, it won’t matter if you incorporate in a state with a high corporate tax rate, moderate tax rate, or no corporate tax at all because you won’t be subject to it. Additionally, incorporating in another state will not affect the state in which you’re subject to individual income tax. For example, if your business is in California and you are subject to California income tax, then incorporating in Delaware won’t change that fact. Hopefully you are in state with no individual income tax, such as Texas or Florida and not a state with a high tax rate, such as California, New York or Massachusetts.

Secondly, if you incorporate in another state, your fees will add up quickly. You will very likely be required to file as a foreign business entity in your home state. Foreign entity fees are usually higher than incorporating, so you will be doubling up on fees, or worse. You will also be required to file annual reports in both states and hire an outside service to be your registered agent (assuming you do not have a physical address in that particular state).

Finally, the stated benefits of incorporating a small company in Delaware, Nevada or Wyoming are often exaggerated or misunderstood. Though a plurality of all companies incorporate in Delaware, the benefits are generally geared towards larger corporations and publicly traded corporations. For example, Delaware corporate law benefits the entity in the case of shareholder derivative suits and also provides anti takeover protection, circumstances which are virtually irrelevant to a small, closely held company. As for the Nevada and Wyoming options, there is no appreciable tax benefit for an S-Corp or LLC that doesn’t operate within the state (see above). What about anonymity? In Nevada, you can take certain measures, such as hiring a “nominee director” to avoid putting the actual directors on state public documents- usually around $600 per director. However, remember that most of these companies will also be required to file as a foreign entity back home. As foreign entity, you will be required to provide the actual directors’ names and addresses.

In balance, do the benefits of incorporating in another state outweigh the disadvantages? For most small companies, the answer is probably no.   Most save time and money by incorporating in your home state.  Please consult an accountant and/or attorney for advice on your specific situation.

Do you have questions about incorporating your business? Please leave a comment below and I will try to answer them. Thanks! – Maryann

 

 

Maryann Lawrence, Startup Rep, Direct Incorporation

The short answer to the best time to incorporate? Immediately. Incorporating your business generally protects your personal assets should there be a lawsuit filed against your business. It also can offer tax benefits, such as substantiating tax deductions for a wide variety of operating costs, and it enhances your image as a business owner.

If your business is already up and running, forming a corporation immediately might make the most sense. In addition, you can potentially save money by forming a corporation before the year’s end.

If your business is not yet operating, you could wait until the following year when your business begins operations. This might defer some of the costs and filing work until you are completely ready to pull the trigger.

However, incorporating sooner, rather than later, is usually the best strategy. This way, once you’re ready to launch your business, you’ll be ready to go with your company name, EIN, bank account, etc…

Also, waiting too long to incorporate could prove risky because you could lose the name you would like for your new business. In addition, it is a bit time consuming, and so the quicker you get started, the easier it will be on you once your business ramps up.

How long will it take to incorporate?

It only takes about 10 minutes to complete an online application. Once this is complete, it depends on your state. For example, Alabama takes four to six weeks, while Alaska takes only 15 to 20 business days. Colorado and Hawaii offer incorporation services in about four business days, while California can take up to 12 weeks.

Do you have questions about incorporating your business? Please leave a comment below and I will try to answer them. Thanks! – Maryann

Maryann Lawrence, Startup Rep, Direct Incorporation

You’ve heard of LLCs, S-Corps and C-Corps, but are you aware of the new legal entity out there called B-Corp? A B-Corp, or Benefit Corporation, is a new form of incorporation that legally recognizes companies that “do good” AND make a profit.

Take Dansko for example. You may have seen this brand at your local department store. Dansko makes dress shoes, sandals and boots, but it does it in a way that uses a for-profit business model to affect social change. Its office building is LEED® certified, it hosts West Grove, Pennsylvania’s only Community Recycling Center, and it pays its employees to take time off to volunteer, as well as match its employees’ salary and gives that amount to the organization at which they volunteer. For these reasons, Dansko qualifies for B-Corp status.

The benefits of a B-Corporation:

• B-Corps enjoy the brand differentiation of being recognized as socially beneficial corporations
• B-Corps enjoy discounts from B-Corp service partners
• B-Corps can attract outside investors, while non-profits cannot
• B-Corps enjoy enhanced collaboration with other businesses that share their goals
• B-Corps can hold their directors accountable for decisions that impact their mission to meet social and environmental performance standards

How to become a B-Corporation:

1. Take, and pass, the B Impact Ratings System
2. Complete a telephone interview with B Lab
3. Amend your governing documents to adopt the B-Corp Legal Framework
4. Put your John Hancock on the B Lab Term Sheet to make it official

Today it’s only available in a few states: California, Hawaii, Michigan, New York, North Carolina and Pennsylvania.

Have a question about incorporating your business? Feel free to post it below and I will try to answer it. Thanks! – Maryann

Maryann Lawrence, Startup Rep, Direct Incorporation

A Trademark is one of the most valuable assets of any business. It distinguishes you from your competition and generates an indisputable record of your use, which is vital in defending your rights if another business were to come along and try to use your mark. It also gives your trade name and brand names more credibility with the public and with other business you deal with.

What is a trademark?

A Trademark is a word, name, symbol, design, phrase or sound that identifies a business organization and distinguishes it from other business organizations.

What can be trademarked?

Logos, names, taglines and packaging can be trademarked if they meet certain qualifications. You can’t trademark a word or phrase that’s commonly used or that is already trademarked by another company. For example, “hot tub” cannot be trademarked because of its common use, while “Whirlpool” is already trademarked and owned by the Whirlpool Corporation.

What’s the difference between a trademark and a service mark?

A trademark identifies and distinguishes the source of the goods, while a service mark identifies and distinguishes the source of a service.

How long will my mark last?

The registration is valid as long as you timely file all post registration maintenance documents. You must file a “Declaration of Use under Section 8” with the United States Patent and Trademark Office between the fifth and sixth year following registration. In addition, you must file a combined “Declaration of Use and Application for Renewal under Sections 8 and 9” between the ninth and tenth year after registration, and every 10 years thereafter.

Do you have questions about registering your business? Please leave a comment below and I will try to answer them. Thanks!  – Maryann