New entrepreneurs have a long list of to-dos when starting their businesses. Among the tasks to check off that list is deciding their business structure. For small businesses with a sole owner and no (or very few) employees, the two most popular options are:
- Sole proprietorship
- Single-member LLC (Limited Liability Company)
So, which one might be the best choice for your business?
I advise you to consider talking with an attorney and accountant to dig into the advantages and disadvantages of each for your specific situation.
In the meantime, let’s take a look at some of the basic characteristics of each so that you’ll have some fundamental information as you start your research. Continue reading
Starting a business with a cause offers much satisfaction as you work to make lives better for others. To launch a nonprofit corporation, it requires taking many of the same steps a for-profit corporation or LLC does, but there are differences, too. Nonprofits must comply with some requirements that don’t affect other businesses.
So, where do you begin?
1. Understand what it means to be a nonprofit.
A nonprofit may be created a nonprofit for charitable, educational or certain other purposes—as long as they don’t directly benefit the owner. Nonprofits (if approved by the federal government) operate tax-free, and they can accept donations and apply for grants.
While a nonprofit business can make profits, surpluses must be used toward fulfilling the organization’s objectives—such as buying computer software to run the business more efficiently or investing in resources that deliver value to those that it serves. Continue reading
The passage of the Tax Cuts and Jobs Act (TCJA) brought renewed focus upon pass-through entities (PTEs). In spite of their widespread popularity, PTEs are commonly misunderstood. While thought of primarily as small businesses with few employees that generate a fraction of overall business profits, the truth about PTEs tells a very different story.
As it turns out, pass-through entities are the most popular structure in the US, employing millions of workers and churning out billions of dollars in annual revenues.
This article will demystify many of the misconceptions about PTEs and explain how the TCJA will affect these companies—and the US economy—in the future. Continue reading
The process to change a business structure (for example, change from a sole proprietorship to a corporation) is the same as starting a new business.
Use the Business Licensing Wizard to get information and links that will help you do the following:
- Create your business structure with the Washington Secretary of State. (Skip this step if you are changing to a sole proprietor or general partnership.)
- Submit a new Business License Application to apply for a new Business License. You will be given a new Unified Business Identifier (UBI) number to be used on tax returns and other documents.
- Reapply for any applicable specialty, and/or city endorsements (for example, Nursery endorsements).
Note: You will probably need to re-apply for all of the licenses you currently have. For example, if you are a building contractor, you will need to reapply for your contractor’s license with the Department of Labor and Industries.
This information has been borrowed from the Washington State Business Licensing Service website. (link)