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Incorporate an Online Business or Form an LCC

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Utilize the Incorporate website to incorporate your business online. The Company Corporation can help you incorporate or form an LLC in as little as 10 minutes. Protect your personal assets and gain tax advantages for your Internet business today. Our online form is quick and easy and our knowledgeable representatives can help you learn more abut how to incorporate your online business and gain a greater understanding of the benefits it will give you.

I have an online auction site where transactions take place in different states. What should I know about my duties and responsibilities to collect sales tax in multiple states? Do I need to incorporate my online business?

If you are looking to incorporate a business online, understanding sales tax compliance is important. As an online entrepreneur, your duties and responsibilities are much the same as for a regular retail business. Even though you have transactions in many states, all with different sales tax laws, it is not your responsibility to collect the sales taxes for all states. Online businesses are required to collect and pay a sales tax when they deliver products and some services to a state in which they have a physical presence. This usually means having an office, store or other facility; however, if a business sends a sales force into a state, it is also considered a physical presence. Some products or services are exempt. Rules and regulations vary by state and sometimes within the state. Consult your accountant or a tax specialist for more specific information about your state.

I use the Internet to expand my business and increase my customer base. Should I incorporate my online business? Will forming a corporation or LLC help me succeed?

Yes. If you are interested in learning how to incorporate online, some important features to consider include:

  • Credibility. Often when a potential customer is choosing an expert online with which to do business, they will first look to see if the company appears reputable. Having an Inc. or LLC after your name adds immediate credibility and authenticity to your business.
  • Asset protection. If you operate as a sole proprietor or in a general partnership, your personal assets are at risk from business debts or possible lawsuits. However, owners of corporations maintain separate business and personal identities; therefore, your personal assets are protected from any liability incurred by your business.
  • Tax treatment. Tax rates for business entities are lower than the individual tax rate. In addition, expenses like insurance and travel for business purposes may be eligible tax deductions.
  • Share the responsibility. Business entities can raise additional capital for their business by attracting investors to provide financial help or lend expertise. Your success in attracting investors to your business can be greatly enhanced when they're protected from personal liability by virtue of your incorporation status.

I operate my business from my home state. I have heard there are advantages to incorporating my business in Delaware or Nevada. Where should I incorporate?

While operating your business from your home state is probably the most cost effective, both Delaware and Nevada can offer advantages that other states can not.

Some of the reasons for Delaware's popularity include:

  • Out of state businesses don't pay Delaware corporation taxes.
  • There is no minimum capital requirement to form a Delaware business entity.
  • There is no personal income tax in Delaware for non residents.
  • One person can hold all Officer and Director positions.

Some of the reasons business owners choose to incorporate in Nevada include:

  • There is no franchise tax in Nevada.
  • There are minimal reporting and disclosure requirements for Nevada corporations.
  • There is no personal income tax in Nevada for non-residents.
  • There is no IRS information sharing agreement for Nevada corporations.

A factor to consider, when forming a company in any given state, is that the company may also have to qualify to do business in other states where it owns property or otherwise conducts business. Generally, qualifying a company to do business in a state other than its state of formation may require filing fees or other documentation. Also, if a company fails to qualify to do business in a required state, it may be subject to penalties.

The Company Corporation can help you form a business online in any of the 50 states or the District of Columbia in as little as 10 minutes. We have formed more than 300,000 businesses nationwide for entrepreneurs just like you.

I have a great idea for an online business. What steps do I take to get started and will forming an entity help raise the capital I need to successfully launch the business?

If you are looking to incorporate your business online, The Company Corporation's website provides many links to get the answers you need to prepare for success. We have business specialists ready to assist you today.

  1. Choose a Business Name. The Company Corporation can assist you with name search and reservation.
  2. Choose a State in which to form your business.
  3. Select the type of business structure that best meets your needs.
  4. Get a Federal Employer Identification Number (EIN).

If business ownership has always been your dream, but you realize your idea is too big to go it alone, forming a business entity allows you to share the responsibility. Incorporating or forming an LLC allows you to offer shares of ownership to potential investors. Start with a business plan to get others excited about your idea. Decide how you will set par value to get the capital you need to get started. Not all investors have to be financial resources. Some can help you launch your business by sharing their expertise. With the right combination of investors, you will be on your way to business ownership.