How Much Does It Cost To Incorporate A Small Business

What is the cheapest option for a casual consulting business? How much does it cost to incorporate a small business like mine? Should I form an LLC? I heard somewhere an LLC costs around $1,000 per year to maintain, is that right? I would expect $5,000 in revenue at the beginning.

The best type of company for a small business is an LLC. LLC is owned by members and operated by either third-party managers or the members themselves. A very flexible form of business, it accounts for why almost 75% of new businesses are LLCs today. The LLC Operating Agreement is the governing document that allows you to arrange the LLC’s affairs as the members choose.

By forming an LLC, you are safeguarding your personal assets by building a shield between them and your business liabilities. If the business itself cannot pay a creditor, this shield makes it difficult for creditors to penetrate your personal assets, like your house or car. Also, if the single-owner business does not form an LLC and chooses to operate as a sole proprietorship, the sole proprietor of the business can be held personally liable for the debts and obligations of the business. Additionally, this risk extends to any liabilities incurred as a result of acts committed by employees of the company. However, with an LLC, you will be able to make certain tax elections which may save you thousands of dollars per year.

The State of Incorporation Matters

Aside from choosing the entity, you also need to choose the state of incorporation. Based on where your business is located, it may not be favorable to your company. For example, California, Pennsylvania and New York, look to the “gold standard” state for incorporation, which is Florida. Choosing to incorporate in Florida may help resolve problems with ownership disputes and other issues down the road. In fact, Florida is known for having the best corporate laws and courts to resolve corporate disputes.

The advantages of operating a Florida LLC for a small consulting firm in another state is it provides more protection for you. If the LLC does not have an office or employees in your home state, then it may not need to file a Certificate of Authority to register your company in the state where you operate your business.

In General, the Cost to Incorporate Is Low

The cost to form and maintain a Florida LLC is low and you can form an LLC in Florida without visiting, opening an office, or maintaining a bank account in Florida. To elaborate, the Florida LLC Act requires any company incorporated in Florida to have a Florida Registered Agent with an in-state street address (most states require a registered agent).

As a consultant, you will still be responsible for your personal negligence. Therefore, you should obtain insurance to cover those risks and you will have to weigh LLC costs and benefits to determine what is best for you.

At Jurado & Farshchian, P.L., we will gladly meet with you, review the cost of your business goals, and help you decide if a Florida LLC is the right cost for you. During the process of forming a business LLC, we will provide our expertise every step of the way to ensure that you are establishing and running a successful business.

To schedule an initial consultation with our Business Experts, you may call us at (305) 921-0440 or send us an email to [email protected].

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