One of the best ways to turn your side hustle into your main source of income is by starting your own business. This shows that you’re growing in your skills and that your formal side hustle is ready to become your main job.
It’s easy to get scared when thinking of starting your own business, but it’s a lot simpler than people may think. This is of course, if you choose to go about it in a simple way which we will discuss.
There is a list of things that need to be done when obtaining a single member llc and making your business an official company legally.
We will discuss these details and how the online company IncFile makes this entire process so easy.
What Is a Single Member LLC?
A single member llc (limited liability company) is an entity or business structure that protects the companies owner from being personally liable for the debts or liabilities of the business.
Put simply, an LLC protects you legally if you should be sued, stopping anyone from having access to your personal bank accounts.
An LLC is vital when you start your business because without it, you are left completely exposed financially. It’s not smart to start your new business without one.
What Is IncFile?
As we will see, there are a list of things that we need to do when starting a business with a single member llc. This can be done alone which means a lot more work for you or it can be done in minutes by using the online company IncFile.
IncFile simply takes all the information you give it regarding the business you are creating and sends it off to the state to be processed.
Once your new business is verified with the state, you're all done. Lets see all the steps needed when starting a single member llc and why incFile is such a life saver making this process so easy.
Steps to Starting a Single Member LLC
When registering a new business, there is a list of important things you need to remember and make sure are completed. IncFile walks you through each step, but let's take a look at what's needed.
1. Register Your Business Name
As a new business owner, you have to pick a name for your company. This name should be carefully thought out since it will represent your entire brand.
You also have to pick a name that has not already been taken in your state. IncFile will automatically notify you if the company name you have chosen is not available.
2. Get Your EIN Number
An EIN (Employee Identification Number) is a nine digit number assigned to your business by the IRS. This number is used for Tax purposes and is also needed for opening a business bank account.
3. Choose a Registered Agent
A registered agent is the person that will receive mail on behalf of the business owner when the company is being summoned for legal action such as a lawsuit.
IncFile also offers a registered agent service free for the first year, which means one less thing for you to do. Many people ask if they can be their own registered agent.
The answer is yes but, you will always need to be available during business hours to receive any incoming mail and you must have a physical street address in the state where your company is.
Also if you move, you will have to register the new address with the secretary of state. As you can see, it can get quite complex which is why we suggest allowing IncFile to be your registered agent.
4. Write Your Operating Agreement
An operating agreement is a legal document that shows how your company will operate. This can be everything from payment dates, management set up, and the type of business you will run.
If left alone, writing your operating agreement by yourself is no fun at all. Thankfully, this is another part that IncFile can handle for you when forming your single member llc.
5. Open a Business Bank Account
Opening a business bank account is a must because using your personal account and company account as one will void your single member llc.
This means that if you are ever sued, the court will not take you seriously because your business and personal accounts are not separated.
Because of this, there would be no protection guarding your personal finances. Your LLC would be worthless at that point because you would not be viewed as a legit company.
IncFile will not only set you up with your EIN number, but they will also provide you a personal banker to help you along the way.
This will save you countless phone calls and trips to the bank, while also speeding up the entire process.
Single Member LLC vs Multi Member
The difference between a single member llc and a multi member llc is simple. One has a single owner and the other has two or more owners.
This is important when it comes to taxes, ownership, and asset protection. It's best to start off with a single member llc.
This will keep things simple since you won't have to answer to another owner if you have a disagreement. And you own 100% of your business.
Start a New Business Easily
We now know the 5 steps needed to officially start your own business legally. Of course, doing this alone can seem pretty stressful.
Thankfully this entire process can be completed in minutes by setting up your single member llc online with IncFile.
IncFile Plans to Choose From
There are three major plans you can choose from when starting your business online with IncFile. The better the plan, the more time you save.
The Silver Plan will give you all the basics to set up your single member llc and make your company official.
- Preparing & filing all documents
- Registered agent free for a year
- Unlimited business name searches
The Gold Plan is the most popular and gets you the best bang for your buck. This will fully set up your business bank account with your EIN tax ID number.
- Every silver plan service
- Online access dashboard
- Unlimited phone & email support
- EIN business tax number
- Business bank account
- Operating agreement
- Business tax consultation
The Platinum Plan is most suited for those who will use a lot of contract forms and invoices. This comes with a set of contract templates that are ready to use.
- Every Gold Plan service
- Domain name
- Business email
- Business contract templates
- Expedited filing and shipping
The Corporate Veil
Once you choose your IncFile plan for your single member llc, you will be protected from someone “piercing the corporate veil.”
This term refers to someone having access to your personal finances in the case where your single member llc was filed incorrectly.
You never want to leave your business open to be sued by having an incomplete single member llc filing. IncFile thankfully does this correctly online for you so you don't have to stress about it.
Business Bank Account
When your business bank account is set up, it’s important to have a checking account for most of your operating expenses.
You also should set up a savings account because you will need to put money in there that will be kept for tax purposes.
Most people pay themselves twice a month from their company and put 15% of each check in their business savings account for taxes.
You should not touch this money at all since you are responsible as a business owner to have funds ready for tax time.
How Your Company Pays Taxes
Now that your single member llc is up and running along with your business bank account, it's important to think in advance how you will prepare your taxes.
Keep Business Receipts
Remember to keep track of all your business expenses because these are tax write offs and can save you from paying out a lot of money.
If you choose to do your own bookkeeping, you should keep electronic records of business expenses and receipts in organized files on your computer.
Bookkeeping Is No Fun
If you’re busy running your business, the last thing you want to worry about is bookkeeping and tracking a ton of expenses.
The best thing to do is to sign up for a bookkeeping service that will keep track of your expenses for you and help to file your tax paperwork when that time comes.
IncFile partners with bookkeeping companies as well, so it would be smart to look into adding this feature to make your life easier.
In the case where your business hires many employees, it's nearly impossible to run the company and keep track of expenses all by yourself.
You will no doubt make costly errors by doing this. So if you have a number of employees you plan to hire, make sure you spend the extra money on bookkeeping. You will save more money in the long run.
So we discussed all the important steps you must take in order to start your awesome new business with a single member llc.
With the paperwork that is needed, it can be stressful if you do it on your own, but when you get your llc through IncFile, they handle everything for you in minutes.
Remember to keep your business and personal bank accounts separate at all times. Also keep track of your expenses so you can write them off when tax time comes around.
Starting your own company may sound scary, but it doesn't have to be. If your side hustle is growing, why not take the next step and become your own boss.
We wish you the best in all your financial goals and in any business that you choose to start.
Get your single member llc online to avoid the stress of filing paperwork by yourself and hit the ground running as the boss of your very own business.
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