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  1. #1

    Being an Inc. company ?

    Hi folks,
    I have basicly 2 questions.. Hope wht people may help me.. This time I couldnt find my answer myself

    * Do being an Inc company makes customer more confidental while buying service? I mean, does that surname (Inc) make company more trustable in customer's eyes?

    * How can a company be an Inc company? I heard it has around $100 cost and some papers should be prepared..

    Please share your opinions with these questions..

    Thanks again.

  2. #2
    I would say it does make you appear more trustworthy, because it means your name and address are on file somewhere and that you will be paying taxes (or should be).

    Mine is a LTD company, but thats because its a Uk company. So I can't help on costs, but i would think about $200 would be about right.

    Good Luck.
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  3. #3
    Hmm thanks TrafalgarWeb,
    LTD is offered in some countries I think but Inc companies can be launched in any company right? I have seen 10+ different country and companies all surname's are Inc..

    Anyway, folks please go on answering my questions and make me feel good

    Thanks

  4. #4
    Join Date
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    Incorperation (inc is short for incorperated) is a type of business model (at least in the US) that has more to do with tax structures and liabilities than anything else. A coperation is basically an free standing entity in the eyes of the IRS and the courts in the same way a person would be. Because of such, any taxes or law suits etc. against the corperation are not held personally against the members of the corperation.

    Customers may see them as more reliable simply because of all the hoops and such you have to jump through to form and maintain one says to them that you're serious about your business and not a fly-by-night company.

    Because the articles of incorperation and other forms you need to start one are fairly complex, typically you need to get a lawyer to do the paperwork. Depending on what that lawyer charges I'd say you're looking at anywhere between $200 - $1000 (US) to get one started.

    I would say it does make you appear more trustworthy, because it means your name and address are on file somewhere and that you will be paying taxes (or should be).
    Any business (no matter the model: DBA, Partnership, LLC, LLP, Corperation, LTD) SHOULD have that information on file with the state that you operate in.

  5. #5
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    Being incorporated doesn't automatically protect you, personally, against liability. Although, if you have all of your paperwork in order...and I do mean ALL of it...it helps.

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  6. #6
    Join Date
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    Quote Originally Posted by AH-Tina
    Being incorporated doesn't automatically protect you, personally, against liability. Although, if you have all of your paperwork in order...and I do mean ALL of it...it helps.

    --Tina
    So does general liability insurance and professional liability / errors & omissions.

    And once you file as llc or inc, you have to ensure that you operate in a manner that ensures the integrity and separation of the two entities (yourself and your business) -- this is particularly true of an llc or inc with a sole shareholder. If you do not operate properly, you can lose all protections afforded to you.
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  7. #7
    Being an INC / LLC lets you establish your BUSINESS CREDIT not your personal credit. Instead of using your personal credit line you can start establishing your business credit line.

    Other advantages of INC / LLC is personal liability is protected if you DO NOT GUARANTEE your personal liablity.

    Finally you are able to properly distribute the ownership of the company under the LLC / INC system.

    To establish inc / llc in the state of california it costs close to 1000 USD to start. Doing the DBA, newspaper ads, llc formation, county business license, etc..

    You are also obligated to pay a 800 USD tax per year even if you make nothing.
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  8. #8
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    I would strongly suggest you speak with an accountant in your area. I know for a fact that at least one thing stated in this thread is 100% incorrect.

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  9. #9
    With an LLC, another big thing, is that after you death the company may cease to exist, depending upon the state you file in and the structure of your company (officers etc.,).

  10. #10
    Speak to a lawyer he will be able to advise you whats best for your country and situation. Wht is great, but it isn't solid legal advice, take it as general advice.
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  11. #11
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    Forming a business structure is a legal process, therefore you need proper legal counsel. I imagine that no WHT member is qualified to give this counsel to you. Sure, we can share experiences, but you need a lawyer. Best of luck!
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  12. #12
    Thats true it is a legal process and there's quite alot of paper work as well as what you really need to know in the formation the disadvantages, advantages.

    I am telling you base on our experiences forming an LLC.
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  13. #13
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    As Tina suggested, speak to an accountant. I would say that is even more important that speaking to a lawyer. Any business entity will afford you personal liability protection (assuming everything is done correctly, etc) buy you can waste tons of money going with the wrong business structure.

    Make sure the account you speak to has experience with small business formation, I wouldn't trust any H&R Blockhead's advise. If you're in the Twin Cities area of MN I can refer you to one of the top small business accountants in the state.
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  14. #14
    Join Date
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    If you do the proper research, you do not necessarily need a lawyer to become incorporated. For example, there is a website called legalzoom.com which will handle the entire incorporation process for you, for a fraction of what you'd pay a lawyer. All you have to do is answer a series of questions and it will help form the paperwork. It's kind of like do-it-yourself tax prep software. You don't NEED an accountant to do your taxes even if they are complex. The tax software will ask you questions, you answer them, and them boom your taxes are ready to file.

  15. #15
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    The business credit line is 100% not true in the USA. So I guess it depends on the country. When applying for credit/load, etc for the company, the line provided to you is based on the credit score of all of the officers in the corporation. Thus, it is based on your personal credit, not business credit.
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  16. #16
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    Actually, you can build a business credit history independent of the officers of the cooperation.

    For example if I opened a new company and applied for business credit, it would initially be based on my credit history. Good payment history would be reported to both my personal as well as business credit profile. Within a certain amount of time, the lender should be able to delink your business credit from your personal credit history and future business credit you apply for can be based solely on your company's business credit history

    Once your company has good business credit, you can take loans and such without any personal liability on the officers/directors/shareholders.

  17. #17
    Quote Originally Posted by Yash-JH
    Actually, you can build a business credit history independent of the officers of the cooperation.

    For example if I opened a new company and applied for business credit, it would initially be based on my credit history. Good payment history would be reported to both my personal as well as business credit profile. Within a certain amount of time, the lender should be able to delink your business credit from your personal credit history and future business credit you apply for can be based solely on your company's business credit history

    Once your company has good business credit, you can take loans and such without any personal liability on the officers/directors/shareholders.

    That is correct. This is why D&B exists as well as other business credit firm.
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  18. #18
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    Aug 2005
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    Most people register a TLD so they are paying taxes.. its like 100-200$. But well worth it.

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