Duvall & Associates, Inc.
BUSINESS ADVISOR NEWSLETTER
 

How to start a business on your own

- by Alan Duvall 

Published in Dayton Daily News April 30, 2006 

Forming a business as a limited liability company shelters the owner from some legal woes.

Fire in the belly.  You feel it building... until you can’t resist its incendiary power.  So you make the life-altering leap to the world of small business ownership.  

For those business mercenaries who hate high-priced professionals preferring solo ventures into the unknown – some Map-quest guidance. 

Sole proprietorships are one-owner companies with company tax filings on personal returns.  Unfortunately such simplicity generates legal issues – if the business is sued the owner is personally liable for resultant damages. 

LLCs are essentially taxed in any manner desired.

Personal protection from business maladies traditionally resided in formation of corporations with two tax options.  Regular “C” corporations pay taxes on undistributed income.  Alternatively, income of “S” corporations is generally taxed directly to shareholders.   

Recently, limited liability companies (LLC’s) have come into vogue as vehicles bestowing owner protection from business litigation with the added advantage of tax flexibility.  LLC’s are essentially taxed in any manner desired.  As sole proprietorships or corporations for single owner entities.  As partnerships or corporations for multiple owner companies.

Recognizing the collective economic power of small business people, governments have sought to ease start-up filing requirements, a task accessorized by the internet. 

Corporate and LLC business names must be registered with the State.  Available names and business forms can be obtained from the Ohio Secretary of State’s office toll-free at 877-SOS-FILE or via web-site www.state.oh.us/sos/.  For convenience Ohio has initiated the 1^st Stop Business Connection to guide go-it-alone trailblazers through the labyrinthine maze of administration 800-248-4040.      

Businesses can obtain Federal ID numbers for business and tax filings toll-free 800-829-4933 or web www.irs.gov.  Ohio sales Vendor Licenses can be obtained in Montgomery County from the web-site www.mcauditor.org. 

Numerous web-sites such as orderinfo@uslegalforms.com provide boiler-plate business documents such as LLC operating agreements. 

Soloing efforts may save front-end costs, but professional guidance is advised for tax and legal angles imbedded in the entity-selection process.  In particular, multiple owner companies need prenuptial agreements defining normal operating procedures and rigid parameters in case of business divorce. 

An ounce of prevention is worth a pound of legal cure.

Alan Duvall is a certified public accountant in Dayton.  Contact him at Alan@Duvallcpa.com.