If you plan on ringing in 2003 by starting a new company, congratulations to you! Taking the leap into the world of the entrepreneur can be both an exciting and somewhat daunting endeavor.
However, it can also be one of the most rewarding experiences if you take the time to plan properly.
While many people focus on trying to lower their potential tax burden by investigating and researching tax codes and law, many people would find they can avoid serious tax issues simply by having a solid plan in place before opening the company's doors.
In addition, it's important to accept your strengths and your weaknesses.
You know what you're best at accomplishing.
Make sure you secure relationships with trusted advisors such as a lawyer, accountant, banker, financial planner and benefits manager professionals who can fill needs where entrepreneurs may be lacking either in time or talent.
These professionals can prove invaluable to the future success of your company, and save you money in the long run.
The following is a comprehensive list outlining some of the most important things a new business owner should consider before opening their doors.
By ensuring that proper systems are in place from the get-go, financial advisors can streamline processes, which translate into significant financial savings internally as well as with taxes.
* Consult an accountant to compare the tax aspects of various business entities.
* Choose the business entity that's best for your needs.
* Consult an attorney regarding federal and state laws governing creation, ownership and operation of your entity.
* Draft and execute an agreement among principals.
Set a goal for your target business start date.
* File with the state for your certificate of assumed name (DBA).
* Obtain your federal Employer Identification Number (EIN).
* File for incorporation or file the necessary LLC or partnership documents with your state.
* Obtain your state tax ID numbers.
In addition, you need to also file these required documents with your state unemployment tax department.
Obtain your state sales tax certificates.
* Obtain any required city, county or local business licenses and permits.
* Open your business checking account.
* Determine the appropriate funding for your entity, and obtain it.
Remember that corporations issue stock certificates.
* Hold all necessary corporate or other organizational meetings.
Remember to also elect your board of directors.
* Set up the books for the new entity.
Close books on the previous entity if you're changing the form of your business.
If you have confusing issues to handle throughout this process, your financial advisor or accountant can provide consultation and assistance.
* Send a notification of the business name and business start date to customers, vendors, bankers, etc.
* Consult with an insurance professional to obtain business liability and workers' compensation coverage.
* Review wills and estate plans of the owners.
* Hire employees if necessary.
* Develop your marketing plan and set business goals.
* Throw open your doors and get your business started! Mike Klaich is managing shareholder of Muckel Anderson CPAs in Reno.
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