The decision to form an LLC or incorporate can help you protect your personal assets from the debts and obligations of your business. Unfortunately, many small business owners avoid doing this because they assume it's too expensive. For a few hundred dollars, these small businesspeople could form an LLC and obtain valuable protection that one day could protect them in case of demand.
The incorporation or constitution of a limited liability company is not necessarily expensive. There are many entities to choose from, as well as states, each with their own costs. You can also choose to work with a lawyer to incorporate your business, which is usually the most expensive option. If you want to save money, you can do your own incorporation, but this can be complicated because even simple paperwork errors can cost you later. For many small business owners, the best option is to use a corporate services company, which is an affordable option to make sure your documentation is correct and that it was presented quickly with the status.
The following costs are predictable if you are ready to join.
A presentation fee is required to create an LLC or a corporation. The exact rate will depend on the state you are incorporating, but it usually ranges from $ 50 to $ 350. The cheapest option is to form a Delaware LLC, since the state has been It has the lowest presentation rate in the United States. Just remember that the cost is not your only consideration, and the incorporation of Delaware may not be of your best interest.
If you will be incorporated in Pennsylvania, Arizona, Georgia or Nebraska, you will have to pay a publication fee of $ 150 to $ 300.
Fees of the annual report
Normally, this rate fluctuates between $ 25 and $ 200 and depends on your incorporation status.
This rate will continue and will be paid every year. Most small businesses pay between $ 800 and $ 1,000, and there is usually a minimum and maximum tax amount that you will pay based on the type of entity you choose and the number of shares that emit For example, the franchise tax in Delaware is a minimum of $ 350, but it can reach $ 180,000 for large corporations. Delaware has the lowest tax rates in the country.
You should also consider other charges that depend on the type of business you are using. For example, it may entail costs to obtain necessary business licenses or set up a commercial bank account.
If you are interested in incorporating or forming an LLC at the lowest possible cost, start considering the state in which you will be incorporated. It is not necessary to operate on the state you choose, but it may be more affordable to choose your originating status if it is the only state in which it operates. If you are thinking of another state, observe your tax rate and compare it with your account.
It can also help you overcome your options with a corporate services company or a lawyer to choose the right business structure. This decision must be made not only considering the costs of incorporation, but also fiscal advantages, continuous maintenance, formalities and property structure.